By: James B. Sherman, Esq. 

On March 2, 2011, the United States Supreme Court issued an important decision on workplace law. In Staub v. Proctor Hospital, the court held that if a non-decision making agent (in this case, the employee's supervisor) acts out of an unlawful motive (antimilitary animus in this case) intending to cause an "adverse employment action" (in this case, the employee's discharge), the employer may be held liable if that agent's act is a proximate cause of the ultimate employment action. In other words, even if the person who made the challenged decision did not act with any unlawful motive, the employer may nevertheless be held liable if the decision was unduly influenced by its non-decision making agent - if that agent acted out of an unlawful motive with the objective of causing the adverse employment action. In so holding, the Court endorsed what several lower courts have dubbed the "cat's paw" theory of employer liability.

The lawsuit was brought under the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA) by Vincent Staub, who was a member of the U. S. Army Reserve and worked for Proctor Hospital as an angiography technician. Staub claimed that both his immediate supervisor and his supervisor's supervisor were openly hostile toward his military obligations which caused him to miss work. Of course USERRA protects such absences relating to military service. The supervisor issued Staub a corrective action disciplinary warning for purportedly violating a company rule and several weeks later, the supervisor's supervisor informed the employer's vice president of human resources that Staub had violated the terms of that corrective action. Relying on this information, but after also reviewing Staub's personnel file, the vice president discharged Staub. Staub claimed both his superiors had falsified their reports in order to get rid of him due to what they allegedly referred to as "availability problems" occasioned by his military service.

A federal jury found in Staub's favor, concluding that "military status was a motivating factor" in the decision to terminate his employment. However, on appeal, the Seventh Circuit Court of Appeals in Chicago reversed the jury verdict. That court held that for the supervisors' unlawful motives to be binding on the employer under the "cat's paw" theory of liability, their influence over the vice president's ultimate decision to terminate Staub would have had to be of such "singular influence" as to constitute "blind reliance" by the decision maker. Although the vice president failed to independently investigate Staub's claim that his supervisors were out to get him for his military service protected under USERRA, the appellate court determined that prior to discharging him the decision maker had spoken to others in management and reviewed his entire personnel file. This was enough in the Seventh Circuit's view to prevent the jury from concluding the supervisors singularly influenced the discharge decision or that the vice president fired Staub out of blind reliance on their unlawfully motivated information. Accordingly, the court overturned the jury verdict and found the employer was not liable.

Frankly, it was apparent from the time the Supreme Court accepted review of the Chicago appellate court's decision that it likely did so because it disagreed with the outcome. Therefore, it really comes as no surprise that the Court reversed the appellate court decision in this case. Here are some of the more salient points of the Supreme Court's decision:

1. It is common for injuries to have multiple causes and because employers often allocate authority to reward, punish or dismiss employees to multiple agents, it is reasonable to hold an employer liable where one or more of its agents involved in such employment actions acts unlawfully.
 
2. To place liability on the employer where the ultimate decision maker has done nothing wrong, however, the employee must not only prove that one or more of the employer's agents acted out of an unlawful discriminatory/retaliatory motive, but also that the agent acted with the object of causing the challenged adverse employment action. Thus, without proof that the corrective action report was written by Staub's supervisor with the object of causing his termination, the employer would not be liable for his subsequent discharge merely because the supervisor created it out of an unlawful bias. However, because the evidence showed that Staub's superior used that corrective action report, coupled with what the jury found was a false claim that he violated the report, there was evidence these non-decision makers acted with the object of causing the vice president of human resources to fire him for an unlawful reason (absences due to military service protected by USERRA).
 
3. Prior to this decision, several lower courts had held an employer could avoid "cat's paw" liability by conducting an independent investigation of the facts instead of relying blindly on the input of the biased non-decision making agent(s). The Supreme Court, however, refused to adopt such a "hard-and-fast rule." The Court observed that the supervisor's biased report would remain a causal factor in the discharge if the independent investigation takes it into account "without determining that the adverse action (discharge) was, apart from the supervisor's recommendation, entirely justified." (Emphasis added.)

In sum, the court held that an employer should be liable when one of its agents acts out of discriminatory animus intending to cause, and in fact does cause at least in part, an adverse employment decision. It is worth noting that this decision involved military service discrimination prohibited by USERRA which, similar to Title VII (which prohibits discrimination in employment on the basis of race, color, religion, sex, or national origin) and the Americans with Disabilities Act (ADA), assesses liability where an unlawful motive is merely a motivating factor for an employer's adverse employment action. Presumably, then, the analysis of the Staub decision would not apply the same in an age discrimination claim under the ADEA. In Gross v. FBL Financial Services, the Supreme Court noted that, unlike Title VII, the ADEA does not contain the same language - i.e., "a motivating factor" - and, therefore, age must be shown to be the reason for an employer's adverse employment action and not just a reason. Thus, the "cat's paw" theory seemingly would not apply in an age discrimination case unless perhaps in some modified form akin to the Seventh Circuit's holding that was reversed in Staub; i.e., no employer liability unless the decision maker relied so blindly on the supervisor's recommendation as to make the decision solely "because of" the supervisor's unlawful motive.

What can employers take from this new Supreme Court ruling? As a threshold lesson, it is now clear that employers cannot always escape liability by vesting decision making authority only in a select group of well-trained individuals who neither hold nor exhibit any bias toward any legally protected status, whether it be race, gender, military service, or any other legally protected class. Supervisors as well as any other "agent" who makes employment recommendations or whose "scope of employment" may involve providing decision makers with information relevant to any adverse employment decision, can impute liability to their employers as a "cat's paw." We therefore recommend employers consider the following based on this Staub decision:

1. Train supervisors and other decision makers and non-decision makers alike on state and federal employment laws, particularly on prohibited bases of discrimination.
 
2. Understand that when supervisors and other potential "cat's paw" agents make derogatory remarks about protected classes, whether verbal, written, or when they otherwise demonstrate any kind of animus toward protected groups, they make themselves a potential liability to their employers, sometimes for years to come. Their usefulness may be diminished since it could be risky to rely on any employment related recommendations they may make in the wake of demonstrated unlawful bias. In the most serious cases, it may be appropriate to consider getting rid of a potential "cat's paw" supervisor.
 
3. Where an employer knows or has reason to know that an employee has or will contend that a planned adverse employment action has been influenced, in whole or in part, by unlawful bias of an agent of the employer, the object of which was to cause the contemplated adverse action, an independent investigation should be conducted.
 
4. The Court in Staub did not provide any clear guidance on what such an independent investigation might entail, but it did state in dicta that the object of such an investigation should be to ensure that the same employment action would result independently of any source challenged as biased. Essentially then, if possible, employers should completely disregard any information, opinions or recommendations coming from an agent whose motives have been called into question as possibly being biased where enough independent evidence exists to arrive at the desired employment action. Of course this clearly should all be well documented.
 
5. Where insufficient independent evidence exists to support a challenged employment decision, it does not necessarily mean that no action may be taken; otherwise an employee could avoid discharge in many instances simply by accusing her or his supervisor, for example, of acting out of unlawful animus. By the same token, although employers justifiably want to back their supervisors when an employee contests their motives the result will be unpleasant for he employer if the supervisor turns out to be a "cat's paw." Thus, the appropriate approach would be not to accept anything for granted but to do an independent review of all the pertinent facts before making any decision. Unfortunately, the Staub decision offers no guidance to employers in this kind of situation and therefore great care must be taken before making any adverse employment decision that could lead to litigation.
 
6. Where an employee contests a disciplinary or other adverse employment action on the basis of alleged bias, remember to ask for their evidence not only of bias but also for their evidence that the non-decision making agent acted "with the object" of causing the ultimate action in question. Both factors - unlawful bias and an object of causing the employment action - must be present under the Staub Court's new "cat's paw" theory.
 
7. Finally, it is important to note that the "cat's paw" theory only applies to non-decision makers (i.e. those who are not involved in the ultimate adverse employment decision). Where a decision maker is shown to act out of unlawful bias, the employer will be found liable.

For questions regarding this important legal decision, or to learn more about supervisor training, please contact Attorney James Sherman at (952) 746-1700, or email jasherman@wesselssherman.com.