Assume that a subordinate supervisor who is biased against an employee for a reason prohibited by the anti-discrimination laws takes action intended to bring about that employee's termination. But the actual termination decision is made by a higher-level supervisor who is not biased against the employee, and who reviewed the individual's circumstances and decided that discharge was warranted, albeit with some reliance on the biased subordinate supervisor's input. Is the employer liable for discrimination?
In recent years, federal courts have struggled with this scenario, known as the "cat's paw"1 theory of liability. Many courts had ruled that an employer was not liable in these situations unless the plaintiff could show that the biased lower-level supervisor had exercised overwhelming influence on the decision maker, so as to eliminate the decision maker's independent judgment.
On March 1, 2011, the U.S. Supreme Court reached a contrary conclusion. It unanimously held in Staub v. Proctor Hospital, No. 09-400, that an employer can be held liable for employment discrimination under the Uniform Services Employment and Reemployment Rights Act (USERRA) based on the bias of a supervisor who influenced, but did not make, the final employment decision. The Court rejected the argument that such an employer could be held liable only if the biased supervisor exerted a “singular influence” over the ultimate employment decision.
This ruling likely will apply broadly to cases under all the major federal anti-discrimination laws, including claims of retaliation and interference under the Family and Medical Leave Act (FMLA). The Staub decision further expands the discrimination risks employers face under USERRA and other anti-discrimination statutes.
In Staub, the plaintiff, Vincent Staub (Staub), an Army Reservist, was employed by Proctor Hospital (Proctor) as an angiography technician. Staub's Army Reserve duties required him to attend drill exercises one weekend per month and full-time training for two to three weeks a year. During Staub's employment, his supervisors
displayed hostility toward his military service obligations. They made comments regarding the strain his service put on the rest of the department and enlisted the help of another employee to help get rid of Staub. In January 2004, one of the supervisors issued Staub a corrective action warning relating to Staub allegedly leaving his work area without permission. Staub claimed he had not engaged in this misconduct.
In April 2004, Proctor's Vice President of Human Resources, Linda Buck (Buck), received complaints from Staub's co-worker regarding his frequent unavailability. Buck intended to place Staub on a performance improvement plan to address these issues. Before she could do so, Buck received a complaint from Staub's supervisor that he had violated the previously-issued corrective action warning by leaving his work area without permission. After reviewing Staub's personnel file and the supervisor's report of his alleged violation of the corrective action warning, Buck decided to terminate Staub's employment. Staub challenged the termination decision via Proctor's grievance process, arguing that his supervisor fabricated the corrective action warning due to hostility toward his Army Reserve duties. Ultimately, Buck declined to reverse the termination decision.
Staub sued Proctor under USERRA, alleging that his termination was motivated by the subordinate supervisors' hostility toward his military obligations. A jury returned a verdict in Staub's favor, finding that his "military status was a motivating factor in [Proctor's] decision to discharge him." The U.S. Court of Appeals for the Seventh Circuit reversed and ruled that Proctor could not be liable for USERRA discrimination. It reasoned that where the ultimate decision maker is not shown to be biased against the employee, the employee may recover for discrimination only if he shows that the biased non-decision-maker exercised such "singular influence" over the decision maker that the decision to terminate was the product of "blind reliance." Since the decision maker, Buck, was not alleged to be biased, and she did not rely entirely on Staub's allegedly biased supervisors in deciding to terminate Staub, Proctor could not be held liable. Staub appealed to the Supreme Court.
What Did The Supreme Court Decide?
The Supreme Court disagreed, ruling that Proctor could be liable. It rejected the Seventh Circuit's "singular influence" standard, and held that "if a supervisor performs an act motivated by anti-military animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA." The Court ruled that the ultimate decision maker's exercise of judgment did not sever the link to the underlying supervisor's bias, but was just an additional cause of the decision along with the biased action. The Court based its decision in part on the following logic:
Proctor’s view would have the improbable consequence that if an employer isolates a personnel official from an employee’s supervisors, vests the decision to take adverse employment actions in that official, and asks that official to review the employee’s personnel file before taking the adverse action, then the employer will be effectively shielded from discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse action.
The Court further held that even the decision maker's independent investigation and rejection of the employee's claims of bias would not automatically avoid liability for the biased supervisor's actions. It did, however, state that if an employer conducts an investigation that "results in an adverse action for reasons unrelated to the supervisor's original biased action," then "the employer will not be held liable." Thus, even if the ultimate decision maker considers the biased supervisor's reports or actions, the causal connection may be broken if the employer can show that the "adverse action was, apart from the [allegedly biased] supervisor's recommendation, entirely justified."
What Does Staub Mean for Employers?
The Staub decision significantly broadens the extent to which employers may be held liable for discriminatory conduct of supervisors that does not directly result in the adverse employment action, even in cases in which a decisionmaker with no discriminatory animus relies in good faith on the supervisor's recommendations. In particular, although Staub was based on USERRA, the Supreme Court specifically noted that the relevant portion of USERRA is "very similar to Title VII," which makes an employment decision unlawful where a prohibited criterion "was a motivating factor for any employment practice, even though other factors also motivated the practice.” Thus, we can expect that the Staub decision will apply to all types of discrimination and harassment claims, as well as FMLA interference claims.
What Should You Do?
Unfortunately, the Court’s decision provides little guidance for employers as to the steps they can take to avoid liability for “cat’s paw” claims. The decision does make clear that having a Human Resources or a higher-level manager review an employment decision will not necessarily absolve an employer of liability for the bias of a subordinate. Nevertheless, the Staub decision makes meaningful review of employment decisions by HR and management even more critical, as the best way to avoid a lawsuit is to ensure that supervisors’ recommendations are well-supported by documented, objective, legitimate nondiscriminatory reasons and that questionable actions are reversed or postponed until they can be properly supported.
Employers should consider the following actions:
- Retrain all managers and supervisors regarding their obligations to avoid discrimination and on how to properly document employee misconduct or poor performance. Make sure that supervisors understand that the employer can be liable for their statements and actions even if they do not make the final employment decisions.
- Maintain clearly written and well-publicized procedures for employees to make complaints to higher management regarding alleged discrimination. Such procedures will either allow you to learn about and address concerns of bias before you make a decision or to argue that the employee's failure to follow the procedure undermines his or her assertion that bias was occurring.
- Carefully investigate supervisors' recommendations before taking adverse action against employees. If there is any bias alleged against a supervisor who recommended the decision, do your best to show that information was either not considered or that objective factors wholly separate from the supervisor's recommendation supported the decision.
- Try to look at the situation from the perspective of a juror.