Staub v. Proctor Hospital: The Cat’s Paw Theory Gets Its Claws Sharpened - Articles

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Posted by: Edward Phillips on Aug 19, 2011

Journal Issue Date: Jun 2011

Journal Name: June 2011 - Vol. 47, No. 6

In its recent holding in Staub v. Proctor Hospital, 131 S. Ct. 1186 (U.S. 2011), the Supreme Court delivered a strong validation to the cat’s paw theory of employer liability in regards to various workplace discrimination claims. The term “cat’s paw” is derived from a 17th century French fable titled “The Monkey and the Cat” in which a cat burns its paws after being lured into getting chestnuts from an open fire by a beguiling monkey.[1] In short, the moral of the story is that the unharmed monkey ends up getting the chestnuts, while the cat ends up with burnt paws to go along with no chestnuts for executing the monkey’s plan. In the context of employer liability, a plaintiff can use the cat’s paw theory to prove discrimination against the employer even though there is no evidence that the decisionmaker for the employer (i.e., “the cat”) harbored any discriminatory animus toward the plaintiff. The ultimate adverse employment action has merely to be influenced, or motivated in some way, by the bias towards the plaintiff by another employee (i.e., “the monkey”), not the ultimate decision-maker.

In Staub v. Proctor Hospital, Staub was a member of the United States Army Reserve. While working for Proctor Hospital, Staub’s immediate supervisor and the supervisor’s supervisor, Mulally and Korenchuck, were openly hostile towards Staub’s military service. In January 2004, Mulally issued Staub a “corrective action.” Staub alleged that the corrective action was fabricated out of hostility toward his military obligations. Korenchuck subsequently advised Buck, the company’s vice president of human resources, that Staub had violated the corrective action directive. Relying in part on the corrective action and Korenchuck’s representations, Buck reviewed Staub’s personnel file, considered a complaint by a coworker, and decided to fire him. Buck had no animus against Staub’s military activities. Staub filed a grievance under the hospital’s grievance process, claiming that he was discriminated against because of his military duties. Buck did not investigate this grievance. Staub subsequently filed a discrimination claim against Proctor Hospital under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), relying upon the “cat’s paw” theory to establish liability.[2] USERRA prohibits any discrimination toward an employee where uniformed service is a motivating factor for an adverse employment decision. Staub’s main contention was that the ultimate decision-maker did not have any hostility toward his military service; however, the hostility of Staub’s direct supervisor and supervisor’s supervisor was a motivating factor in the employer’s ultimate decision to terminate him.

At trial a jury found that Staub’s “military status was a motivating factor in [employer’s] decision to discharge him,” and awarded $57,640 in damages. Proctor Hospital appealed. The Seventh Circuit Court of Appeals reversed the trial court’s decision, dismissing the claim because the decision-maker had relied on more than the supervisors’ advice in making her termination decision. The Seventh Circuit stated that the “cat’s paw” theory only imputes discrimination liability to the employer in cases where the non-decision-maker (who was biased) had “singular influence” over the ultimate decision-maker and essentially based the termination decision on “blind reliance.”[3] Under this rationale, the Seventh Circuit concluded that no reasonable jury could determine that the discriminating supervisors had complete control over the vice president’s decision to fire the plaintiff because the vice president used other sources of information and conducted her own investigation by reviewing the plaintiff’s employment file and considering a coworker’s complaint before making the ultimate decision.

The Supreme Court, in a unanimous 8-0 decision, reversed the dismissal of the plaintiff’s “cat’s paw” discrimination claim. In the opinion by Justice Scalia, the Court held:

[I]f a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, then the employer is liable under USERRA.[4]

In reaching its holding, the court relied heavily on the principles of agency law and the tort concept of proximate cause. The court dismissed the “singular influence” concept relied on by the Seventh Circuit and focused more on the discriminatory animus by the supervisors as agents of the employer. The court determined that the supervisors’ bias toward the plaintiff was “a causal factor” and/or “proximate cause” in the employer’s ultimate action. Proctor Hospital argued that the ultimate decision was made by the unbiased vice president after conducting her own independent investigation that consisted of relying on the supervisors’ statements, a complaint from a coworker, and review of the plaintiff’s personnel file. The court rejected the employer’s argument that having an independent investigation shielded the employer from liability for discrimination by stating:

We [the court] are aware of no principle in tort or agency law under which an employer’s mere conduct of an independent investigation has a claim-preclusive effect. Nor do we think the independent investigation somehow relieves the employer of “fault.” The employer is at fault because one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision.[5]

The court stated that if the employer’s decision to terminate the plaintiff were for reasons unrelated to the supervisors’ original biased action, then the employer would not be liable.[6] The court, however, concluded that this was not the case in Staub, because the supervisors’ biases were causal factors underlying the vice president’s decision to terminate the plaintiff.

The Staub decision raises questions for employers as to the extent and scope for the “cat’s paw” theory in terms of employer liability, particularly on summary judgment. The statutory language found in USERRA, which prohibits the particular bias from being a “motivating factor” for any employment practice, is found in a majority of federal antidiscrimination statutes. Among those federal statutes is Title VII of the Civil Rights Act of 1964 (which was directly compared to USERRA in the Staub decision),[7] the Americans with Disabilities Act of 1990 (ADA), and many others. However, when there is a federal statute that does not have the “motivating factor” language, such as the Age Discrimination in Employment Act (ADEA), the Supreme Court has required the plaintiff to prove that the bias action was determinative, or a “but-for” cause of the adverse employment decision.[8] The Staub decision also leaves a lot to be desired in defining a bright-line test for how an employer should conduct an independent investigation. The court tells us that an employer’s decision based on “unrelated reasons to the supervisor’s bias report” would result in no employer liability, yet the court gave no guidelines on how to conduct such an independent investigation. It is also unclear whether Staub would be upheld if the discriminating employee were not a supervisor but a co-worker, as referenced in a footnote to the case by Justice Scalia.[9]

So what are the “lessons learned” for employers? First, the so-called independent investigation by Buck was superficial at best. Second, although this was a discrimination claim under USERRA, the Supreme Court’s opinion makes clear it applies to other similar federal employment discrimination laws. Third, counsel for employers should advise their clients that it is more important than ever to conduct a meaningful investigation of supervisors’ recommendations, including giving the employee an opportunity to explain his/her side of the story, before taking an adverse action. Finally, employers should be urged to redouble their efforts to train supervisors on at least the basics of employment law. There is no excuse for supervisors openly exhibiting an antimilitary bias that can lead to a USERRA claim.

Notes

  1. “The Monkey and the Cat” or “Le Singe et le Chat” by Jean de la Fontaine (1679) and inspired by an ancient fable by Aesop. The “cat’s paw” theory was injected into United States employment discrimination law by Judge Posner in the case of Shager v. Upjohn Co., 913 F. 2d 398, 405 (7th Cir. 1990).
  2. The United Services Employment and Reemployment Rights Act of 1994, 38 U.S.C.S. § 4301, et seq. Under this act, an employer is forbidden to deny employment, reemployment, retention in employment, promotion, or any benefit of employment based on a person’s “membership in” or “obligation to perform service in a uniformed service.”
  3. Staub v. Proctor Hospital, 560 F. 3d. 647, 659 (7th Cir. Ill. 2009).
  4. Staub v. Proctor Hospital, 131 S. Ct. at 1194.
  5. Id. at 1193.
  6. Id. at 1193.
  7. In the Staub decision, the court states, “[T]he statute [USERRA] is very similar to Title VII, which prohibits employment discrimination ‘because of … race, color, religion, sex, or national origin’ and states that such discrimination is established when one of those factors ‘was a motivating factor’ for any employment practice, even though other factors also motivated the practice.” Staub, 131 S. Ct. at 1191; citing 42 U.S.C. §§ 2000e-2(a), (m).
  8. See Gross v. FBL Financial Serv., 129 S. Ct. 2343 (U.S. 2009).
  9. Staub v. Proctor at footnote 4 states, “[W]e express no view as to whether the employer would be liable if a co-worker, rather than a supervisor, committed a discriminatory act that influenced the ultimate employment decision.”

Edward Phillips Edward G. Phillips is a lawyer with Kramer Rayson LLC in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.