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US Supreme Court Gives Legs to Cat's Paw: Finds Employer May Be Liable For Discrimination Based on Unlawful Motive Or A Non-Decision Maker

March 4, 2011

DISCRIMINATION NOTEBOOK

On March 1, 2011, the United States Supreme Court upheld liability on a “cat’s paw” theory of discrimination. See Staub v. Proctor Hospital, Case No. 09-400 (2011). While anti-military animus did not directly motivate the Vice President of Human Resources’ decision to terminate an employee, it did motivate two supervisors who indirectly influenced the decision, resulting in liability under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Though announced in a USERRA case, the “cat’s paw” theory could have been adopted in a case arising under any of the other discrimination statutes, such as Title VII.

The Underlying Facts
Proctor Hospital employee Vincent Staub was also a military reservist. His immediate supervisor, Janice Mulally, and her supervisor, Michael Korenchuk, were both hostile to Staub’s military obligations, which included attending drill once a month and training full time for two to three weeks per year. Reservists are required to perform this duty and USERRA protects them from discrimination for performing their military obligations. Mulally and Korenchuk demonstrated their animosity towards Staub by, among other things, scheduling him for extra shifts at the Hospital without notice “so that he would ‘pa[y] back the department for everyone having to bend over backwards to cover his schedule for the Reserves.’” In January 2004 Mulally issued Staub a corrective action for violating an alleged work rule; she directed Staub to report to Mulally or Korenchuk when he finished his work. Korenchuk later reported to Linda Buck, Vice President of Human Resources, that Staub had violated the directive. Based on the report from Korenchuk, Buck terminated Staub’s employment.

Staub sued Proctor Hospital, claiming that it violated USERRA when it terminated his employment because of his reservist status. The hospital argued that it could not be liable for the hostility of supervisors who had not made the termination decision. A jury returned a verdict for Staub and Proctor Hospital appealed. The Seventh Circuit Court of Appeals reversed and found that Buck had relied upon more than Mulally’s and Korenchuk’s input in making the decision to terminate.

The US Supreme Court Decision
The Supreme Court disagreed with the Seventh Circuit. Under USERRA, it is unlawful for an employer to take adverse action against an employee (such as termination) because of the employee’s military service. In this case, the Supreme Court had to decide whether Staub’s reservist status was a “motivating factor” in his termination where the decision maker (Buck) had no personal discriminatory animus, but was influenced by previous company action (the corrective action notice) that was itself the product of such animus. The Court found that an employer may be liable in this situation.
 
“[I]f a supervisor performs an act motivated by antimilitary 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.”

Therefore, the Court found that a reasonable jury could conclude Mulally’s and Korenchuk’s discriminatory actions were intended to result in Staub being fired and were causal factors underlying Buck’s decision to terminate.

Practical Thoughts for Employers
The Supreme Court’s decision means that employers are unlikely to escape liability for discrimination -- under USERRA or other discrimination statutes, such as Title VII-- simply by showing that the decision maker does not share the unlawful discriminatory animus of supervisors. This decision is yet another reason for employers to implement and adhere to effective internal complaint systems. Moreover, this decision is a reminder that an employer’s best form of protection may be to provide training to all employees (training regarding non-discrimination policies and internal complaint processes).

Bullard Law will continue to track the development of the “cat’s paw” theory of liability and report on new developments. Please feel free to contact us with any questions concerning this decision or any other labor, employment and benefits issues.

- Jennifer N. Warberg
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