“Cat’s Paw Theory Endorsed by U.S. Supreme Court” — Staub v. Proctor Hospital
On March 1, 2011, the Supreme Court decided the case of Staub v. Proctor Hospital, No. 09-400. The decision was unanimous (8-0), with Justice Scalia writing the Court’s opinion, Justice Alito writing a concurrence in which Justice Thomas joined, and Justice Kagan taking no part in the case. The Court overturned the Seventh Circuit, holding that a reasonable jury could have determined that Proctor Hospital violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), on a “cat’s paw” theory, when Proctor’s human resources director terminated Vincent Staub based in part on recommendations of Staub’s supervisors who allegedly were motivated by hostility towards Staub’s responsibilities as a member of the Army Reserves.
(For those unfamiliar with the “cat’s paw” concept, Justice Scalia explained: “The term “cat’s paw” derives from a fable conceived by Aesop, put into verse by La Fontaine in 1679, and injected into United States employment discrimination law by Posner in 1990. See Shager v. Upjohn Co., 913 F. 2d 398, 405 (CA7). In the fable, a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes off with the chestnuts and leaves the cat with nothing. A coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform services on the king’s behalf and receive no reward.”)
Staub, a member of the United States Army Reserve, worked at Proctor Hospital as an angiography technician. Staub’s immediate supervisor, Janice Mulalley, and her supervisor, Michael Korenchuk, disliked Staub’s Reserve obligations, which included training one weekend per month plus two to three weeks each year, because the obligations made scheduling difficult. Both Mulally and Korenchuk made disparaging remarks regarding Staub’s Reserve service, and Mulally indicated to a co-worker that she wanted to “get rid of” Staub. Korenchuk was aware that Mulally was “out to get” Staub.
In early 2004, Mulally issued Staub a disciplinary warning for failing to stay in his work area when he was not working with a patient. The warning stated that Staub was to report to Mulally or Korenchuk whenever his patient responsibilities were completed. Shortly thereafter, one of Staub’s co-workers complained to Proctor’s COO and Linda Buck, Proctor’s vice president of human resources, that Staub was frequently unavailable and was “abrupt.” The COO directed Mulalley and Korenchuk to create a plan to solve Staub’s “unavailability” problems. Before they developed any plan, Korenchuk informed Buck that Staub had left his work area without telling a supervisor, purportedly in violation of his earlier disciplinary warning. Buck, relying on Korenchuk’s accusation, Staub’s personnel file and the complaint from Staub’s co-worker, terminated Staub’s employment.
Staub challenged his termination through Proctor’s internal grievance procedure, but was unsuccessful. Staub then sued Proctor under USERRA claiming that his termination was based on hostility to his military obligations.
At his jury trial, Staub argued that his firing violated USERRA because Mulally and Korenchuk were hostile to his Reserve obligations and, based on that hostility gave him his disciplinary warning and went to Buck when Staub later purportedly violated the terms of that warning. Staub did not argue that Buck, who made the termination decision, had any discriminatory animus regarding Staub’s military duties. The jury found that Staub’s membership in the Reserves was a motivating factor for Proctor’s termination decision and awarded Staub just under $58,000 in damages.
Proctor appealed to the Seventh Circuit arguing that it was entitled to judgment as a matter of law. The Seventh Circuit described Staub’s lawsuit as a “cat’s paw case,” meaning that Staub sought to hold Proctor liable even though the person who made his termination decision did not have animus against him. The Seventh Circuit then reversed the district court, holding that, in a cat’s paw case, the non-decision makers (Mulalley and Korenchuk) must have exercised such “singular influence” over the decision maker (Buck), that the termination decision was made on “blind reliance.” The Seventh Circuit reasoned that, while Buck relied in part on Korenchuk’s and Mulalley’s statements in firing Staub, Buck also reviewed Staub’s personnel file and took into account the statement of Staub’s co-worker that Staub was abrupt and unavailable. Staub appealed to the Supreme Court, which granted certiorari.
The Supreme Court Decision
As the Court’s opinion notes, USERRA prohibits covered employers from denying “initial employment, reemployment, retention in employment, promotion, or any benefit of employment” on the basis of U.S. armed forces membership or obligations. An employer violates USERRA if armed forces membership “is a motivating factor” in such a denial.
The Supreme Court concludes that a reasonable jury could have believed that Mulalley and Korenchuk intended that Staub be fired when they disciplined him and later reported Staub’s alleged violation to Buck. The Court further concludes that a reasonable jury could have believed that these actions were motivated by Mulalley’s and Korenchuk’s hostility towards Staub’s Reserve membership.
Describing USERRA (and federal anti-discrimination statutes generally) as intentional “federal tort[s],” the Court draws from the common law of torts and agency: “Animus and responsibility for the adverse action can both be attributed to the earlier agent (here, Staub’s supervisors [Mulalley and Korenchuk]) if the adverse action is the intended consequence of that agent’s discriminatory conduct.”
Noting that Mulalley and Korenchuk were supervisors, and acting as such when they disciplined Staub, the Court further explained that because Mulalley’s and Korenchuk’s discriminatory actions were a proximate cause of Staub’s firing, then Proctor could be held liable under USERRA. The Court stated that “[p]roximate cause requires only ‘some direct relation between the injury asserted and the injurious conduct alleged,’ and excludes only those ‘link[s] that are too remote, purely contingent, or indirect.’”
In sum, an employer can be held liable for the discriminatory actions of a supervisor under USERRA – even if the supervisors do not make the ultimate employment decision at issue – when a supervisor (1) intends the adverse employment action, (2) is motivated by discriminatory animus, and (3) takes actions that are the proximate cause of the adverse employment decision.
In Staub, the Court specifically rejects a bright-line rule that an independent investigation by an unbiased decision maker protects an employer from liability under USERRA. Rather, it concludes that “if the employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action . . . the employer will not be liable.” To avoid liability under USERRA, an unbiased decision maker must decide “that the adverse action was, apart from [a supervisor’s discriminatory recommendation,] entirely justified.”
Staub v. Proctor Hospital was clearly not written with the intention of providing practical guidance for employers. There are, however, several practical takeaways that derive from the decision.
Courts are already applying Staub in contexts other than USERRA. Though the decision specifically addresses USERRA, the Court’s opinion strongly suggests that Staub should apply to most federal anti-discrimination statues. Indeed, federal district courts are already applying Staub in other contexts. See, e.g., Andrews v. Fantasy House, Inc., Civil No. 09-2231 (DSD/JJG) (D. Minn. Mar. 3, 2011). (Denying employer’s motion for summary judgment in a cat’s paw Title VII race and sex discrimination case and citing Staub). So, consider the following guidance when making employment decisions regarding members of all federally protected classes of employees.
Publicize your internal grievance procedures. In a footnote, the Court in Staub specifically reserves judgment on whether the decision would apply if an employee fails to utilize an internal grievance procedure after an adverse employment action. If you do not already have one in place, consider establishing internal grievance procedures. If you already have one, ensure your employees are informed about it.
Supervise your supervisors. Also in a footnote, the Court specifically reserves judgment as to whether a non-supervisor could incur employer liability under a cat’s paw theory. There is a rather strong argument under Staub that they cannot. Employers should focus, therefore, on educating supervisors about unlawful discrimination and assist them as much as possible in dealing with issues as they arise. For instance, address scheduling problems with supervisors based on Reserve obligations or disability accommodations.
Do your homework and document it. If you are making a termination or discipline decision, make sure to take into account all of the facts available to you. Listen to the employee subject to discipline or discharge. Did he or she claim that he or she was being discriminated against or that his or her supervisor was “out to get” him or her? If so, investigate and document your investigation. Talk to those who have complained about the employee and seek to determine the true basis of those complaints. Make all possible efforts to base the termination decision on reports from a number or sources and documented violations of established rules.