3-29-2011; The first in a series of articles by Arik D. Hetue, J.D. taking a look at some of the recent rulings of the Supreme Court of The United States which point toward a...

KC&A styles itself as a “one-stop shop” for employer defense needs. We have successfully defended IDHR suits in Illinois and Title VII suits in the Federal courts at very reasonable rates. In these discrimination settings, there are clearly defined paths for defendant employers to follow in order to limit their potential liability. Earlier this month, the Supreme Court of the United States decided a series of cases involving workers’ rights in the employment law setting. Over the next few weeks we will be looking at some of these decisions. This week we highlight Staub v. Proctor Hospital, U.S. No. 09-400, which significantly expanded Plaintiff’s rights in regard to the “cat’s paw” theory of liability.

Staub v. Proctor Hospital, U.S. No. 09-400, decided on March 1, 2011, dealt specifically with the “cat’s paw” theory of discrimination, which hinges liability on the assertion an unbiased decision maker is influenced by a co-worker with a discriminatory bias to make an adverse employment decision against an employee. As an example – if a male supervisor with a gender bias wrote up false reports with the intention to get a female worker terminated, and an independent regional manager relied on those reports to make the determination to terminate, without an independent investigation, the regional manager would effective be the “cat’s paw” of the biased supervisor who actually made the decision to terminate. Prior to Staub, the solution was for the employer to perform a wholly independent investigation into the issues prior to making the determination to terminate. On March 1, 2011, the United States Supreme Court addressed this theory of liability in a military discrimination case and ruled an employer can be held liable if the bias of the manager was a “proximate cause” of the employment action, if the decision maker relied on those reports to make their decision.

In Staub Army reservist Vincent Staub alleged his employer violated the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) when he was fired from his civilian job as a hospital technician. Staub presented evidence his direct supervisors were openly hostile to his military obligations. Evidence of openly anti-military comments, evidence the supervisors asked co-workers to help “get rid” of Staub, evidence supervisors scheduled Staub extra shifts to “pay back” co-workers who had to cover his military training absences, and confirmation his supervisor gave him an allegedly sham disciplinary warning, followed by another allegedly sham violation of the warning. Staub was reported to Human Resources following this violation, and relying in part on the supervisor’s accusation, the VP of Human Resources fired him.

The jury rendered a verdict for Staub. The verdict was overturned by the Seventh Circuit, which ruled Staub had to prove his immediate supervisors had a “singular influence” on the unbiased decision maker in order to establish a cat’s paw claim. This is clearly delineating the pathway noted above which employers had previously used to safeguard themselves from such claims – that an independent investigation into the events leading to the termination decision would effectively insulate the employer from liability, unless the investigation was solely reliant on the biased reporting.

Justice Kagan took no part in the decision, however the remainder of the Court was unanimous in reversing the Seventh Circuit. The Court ruled “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 the act is a proximate cause of the employment action, then the employer is liable under USERRA.” Proximate cause is a legal concept which is sometimes referred to as “legal cause”. There can be multiple proximate causes for an employment action; for generalization purposes, it can include everything leading up to the decision to terminate. Because Staub’s supervisors were found hostile to his military obligations in the manner listed above, and because their disciplinary action was a causal factor underlying the investigator’s decision to terminate Staub, the Court held a reasonable jury could find the bias was the proximate cause of the termination, and therefore rule in favor of Plaintiff.

In so ruling, the Court rejected the employer’s argument the decision maker’s independent investigation should insulate the employer from the supervisor’s prior instances of discrimination. The Court limited this defense by confirming an employer would be liable unless it could show an independent investigation resulted in the decision being made for reasons unrelated to the supervisor’s original biased actions. The more difficult pill to swallow was their holding a supervisor’s biased report can remain a causal factor, and therefore a proximate cause, if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.

Practically speaking, Staub increases employer liability in all employment law settings where the “cat’s paw” theory can be used, including Title VII and the ADA. In fact, the Court specifically implied the ruling would apply in those settings due to the similarity of the requirement the bias be a “motivating factor” in each of those settings. That said, this expansion of rights will apply only in certain limited cases where complaining employees were able to demonstrate actual animus by the biased supervisor and intent by the biased supervisor to cause an adverse employment action. The facts of this case were egregious, and we would hope most employees will be unable to establish the kinds of facts Staub was able to evidence at hearing. Also of note, the Court did not eliminate the defense of independent investigation, however, they did leave unclear the circumstances which would allow independent investigation to insulate an employer from a Cat’s Paw claim. As is the case in these types of rulings, such details will be left to the lower courts to address.

In regard to how this affects your business practice, as always, we recommend you have a clearly defined reporting procedure in place which all employees are made aware of. We also recommend clear and accurate documentation of all workplace infractions, with witness statements being taken any time there is a need for them. As noted, the independent investigation is still a defense, but the more your investigator has to review, the more likely their decision will be based on something other than a biased report.

This article was researched and written by Arik D. Hetue, J.D. If you have thoughts and comments, please send a reply to ahetue@keefe-law.com, or post them later today on the blog at www.keefe-law.com/blog.