Earlier this week, the Second Circuit Court of Appeals revived plaintiff Andrea Vasquez’s wrongful termination and retaliation lawsuit against her former employer, holding that under the “cat’s paw” theory, the retaliatory intent of any company employee – not just supervisory personnel – can be imputed to the company.

The “cat’s paw” theory traces its roots back to Shager v. Upjohn Co., a 1990 Seventh Circuit decision. As the 10th Circuit recently explained, the “cat’s paw” theory is based on “a fable… in which a monkey convinces an unwitting cat to pull chestnuts from a hot fire. As the cat scoops the chestnuts from the fire one by one, burning his paw in the process, the monkey eagerly gobbles them up, leaving none left for the cat.” Translated to legalese, the theory imputes lability to an employer when a biased employee persuades the employer to fire another employee for discriminatory or retaliatory reasons.

Different versions of the “cat’s paw” theory have been endorsed by the various Circuit Courts. In 2011, the theory was tested before the Supreme Court, which determined an employer may be held liable if a biased supervisor recommends an adverse employment action and the company fails to independently investigate whether, and determine that, the action is warranted. By contrast, if the employer’s independent investigation results in an adverse employment action for reasons unrelated to the supervisor’s original biased action or recommendation, and the employer reaches that conclusion without taking that recommendation into account, the employer will not be liable. While the Supreme Court decision endorsed the “cat’s paw” theory with respect to biased supervisors, the Court did not specifically say whether the theory applied when an employer was influenced by a low-level employee.

Two years after the Supreme Court’s decision, Ms. Vasquez sued her former employer for wrongful termination and retaliation. According to the Second Circuit, in the space of twenty-four hours, Ms. Vasquez was subjected to unwelcome sexual advances by a coworker, complained about that conduct to her employer, and thereafter lost her job. A co-worker discovered Ms. Vasquez’s complaint and provided false documents to the employer purporting to show it was Ms. Vasquez who had behaved inappropriately, thereby resulting in Ms. Vasquez’s termination. The U.S. District Court for the Southern District of New York dismissed Ms. Vasquez’s complaint, finding that the employer could not have engaged in retaliation because it could not be held responsible for the retaliatory animus of the co-worker, a low-level employee with no decision-making authority.

On appeal, the Second Circuit held that all employees’ retaliatory intent may be imputed to their employer where the employer’s own negligence gives effect to the employee’s retaliatory animus leading to the adverse employment decision:

“In sum, we hold that an employer may be held liable for an employee’s animus under a ‘cat’s paw’ theory, regardless of the employee’s role within the organization…”

However, the Second Circuit decision makes clear that the theory only applies when an employer acts negligently with respect to the information it was provided. Thus, the decision stops short of the 2011 Supreme Court decision involving supervisory personnel which requires that no part of biased supervisor’s report be a factor in the employer’s decision making. The Second Circuit remanded the matter, instructing the District Court to make findings of fact whether Ms. Vasquez’s employer was negligent in its investigation.

The Second Circuit decision is a reminder that employers should promptly, thoroughly, and independently investigate employee complaints involving multiple coworkers, without deferring unquestioningly to termination recommendations by coworkers or supervisors. As the Tenth Circuit has explained, the policy behind the “cat’s paw” theory is to require employers to “hear both sides of the story before taking an adverse employment action against a member of a protected class.”

The Second Circuit case is Vasquez v. Empress Ambulance Service Inc. et al., case number 15-3239.

The 2011 Supreme Court case is Vincent E. Staub v. Proctor Hospital, 562 U.S. 411 (2011).