US Supreme Court Rules for Employee on "Cat’s Paw" Theory

The United States Supreme Court recently unanimously issued a major victory for employees under “USERRA“, the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301 et seq., on the “cat’s paw” theory in employment discrimination claims. The decision was in Staub v. Proctor Hospital, — U.S. — (March 1, 2011) (opinion at Google Scholar). Justice Scalia wrote the opinion for the unanimous court. Justice Alito wrote an opinion concurring in the judgment, which Justice Thomas joined. Justice Kagan did not participate in the decision.

What is the “Cat’s Paw” Scenario?

Drew's kitty-cat, HannaSo, what the heck is the “cat’s paw” theory? Does it explain why my cat, pictured at the left, is staring so intently at you?

First, to define “cat’s paw” in a non-legal context, the Webster’s Online dictionary defines a “cat’s paw” as: “A person used by another to gain an end.” The term arises out of a fable in which a a shrewd monkey tricks a cat into pulling roasting chestnuts out of a fire—the cat gets its paw burned, and the monkey gets the chestnuts and scampers away unhurt.

Second, the “cat’s paw” translated into an employment setting goes something like this: the clever bigot in a workplace—Ralph, a white guy, playing the part of the shrewd monkey– wants to get rid of another employee, Bob, because Bob is African American. Ralph has no power to fire Bob. So Ralph trick’s Bob’s boss, Sally (white, playing the part of the tricked cat), into firing Bob. Ralph tells Sally that Bob embezzled $300,000. Sally, trusting Ralph, fires Bob. Ralph (the shrewd Monkey), Sally (the tricked Cat), and Bob, all work for Buy-N-Large Corporation (I got that name out of the Pixar movie, Wall-E).

So Bob sues Buy-N-Large for race discrimination. Let’s assume that Buy-N-Large proves conclusively that Sally was completely free of any sort of racial bias, but let’s also assume that the evidence is overwhelming that Ralph was a flaming racist.  And let’s also assume that only Sally had the firing authority over Bob, that she in fact made the termination decision, and that Ralph had no decision-making role in Bob’s termination.

Buy-N-Large then files a motion for summary judgment to dismiss Bob’s lawsuit, alleging that the employment discrimination laws require proof of discriminatory motive on the part of the company, Sally conclusively had not a discriminatory bone in her body, and therefore Buy-N-Large cannot be held liable under the employment discrimination laws.

So you’re the judge. Remember, Sally was free of even a hint of discriminatory intent, she made the decision to fire Bob, and she was the only one authorized by Buy-N-Large to fire Bob. Ralph is sitting there in full Klan regalia, had no authority to fire Bob, but Ralph tricked Sally into firing Bob over the false allegation of embezzlement. Again, to compare the roles to those in the fable: Ralph is the clever monkey who tricked Sally, the cat, into firing Bob (the object of Ralph’s trickery, the chestnuts in the fable).

Prior to the Supreme Court’s decision in Staub v. Proctor Hospital, the federal courts had been deeply divided on whether Buy-N-Large (sticking with my silly example) could be held liable for employment discrimination.  In Staub’s case (which dealt with discrimination based on military service, as opposed to the race discrimination in my example), the trial judge and jury found for the employee Staub, and then the Third Circuit Court of Appeals unanimously (3-0) ruled for the employer, holding that the employer could not be held liable under roughly the scenario I use in my example. Then the United States Supreme Court unanimously (8-0) ruled for Staub, the employee, holding that the employer could be held liable for discrimination under the “cat’s paw” scenario.

The Issues Under USERRA in Staub

To finally get back to what happened in the Staub case, Vincent Staub was  a member of the Army Reserve while working as an angiography technician for Proctor Hospital in Illinois. Staub contended that his immediate bosses were angry about his Army reserve service, in that supervisors had to schedule around Staub’s obligation to be on military reserve duty one weekend per month. USERRA prohibits discrimination against employees like Staub, who are in the military reserve.

Here are the management players in Staub’s case, and I point out their comparable figures in the “cat’s paw” fable, and I have summarized the relevant evidence of any discriminatory motive:

  • Janice Mulally was Staub’s immediate supervisor. Mulally was the “clever monkey” in the fable, allegedly manipulating the “cat’s paw”, Buck. When Staub got fired, Mulally was not a “decision maker” in the termination. There was substantial evidence of discriminatory motive on the part of Mulally: (a) Mulally scheduled  Staub for additional shifts without notice so he could “pay back the department for everyone else having to bend over backwards to cover his schedule for the [military] reserves”; (b) Mulally told a co-worker that Staub’s military service had been a “strain on the department”; (c) Mulally asked the same co-worker for help to “get rid of him” [Staub].
  • Michael Korenchuk was Mulally’s immediate supervisor. Korenchuk was another “clever monkey” in the fable, allegedly manipulating the “cat’s paw”, Buck. When Staub got fired, Korenchuk was not a “decision maker” in the termination. There was substantial evidence of discriminatory motive on the part of Korenchuk: Korenchuk told workers that Staub’s military service consisted of a “bunch of smoking and joking” that was a “waste of the taxpayers’ money”, and there was evidence that Korenchuk was aware that Mulally was “out to get” Staub.
  • Linda Buck was Vice President of Human Resources for the hospital, Proctor Hospital. Buck was the innocent “cat’s paw” in the fable. When Staub got fired, Buck was the only “decision-maker”, but Buck fired Staub largely because of the allegations made by Mulally and Korenchuk. There was no evidence that Buck had any discriminatory motive against Staub.

We have a situation where there was substantial evidence that Staub’s immediate boss, Mulally, and Mulally’s immediate boss, Korenchuk, both had hostility toward Staub based on his military reserve service (“discriminatory animus”) and that Mulally was recruiting help to “get rid” of Staub (and there was evidence that Korenchuk knew of that plan or desire).

So here is a sequence of events that led to Staub’s termination:

  • Mulally issued Staub a “corrective action” that accused Staub of violating a company policy that required Stub to stay in his work area. Staub contended in his later lawsuit that (a) there was no such policy, and (b) even if there was such a policy, Staub did not violate it.
  • A co-worker of Staub complained about Staub’s “frequent unavailability” and “abruptness” to Buck and a different Vice President of Human Resources, McGowan. McGowan directed Buck and Korenchuk to create a plan of action to solve Staub’s “availability problem”.
  • Before that plan of action was formulated, Korenchuk reported to Buck that Staub had left his desk without informing a supervisor, in violation of the prior “corrective action”. Staub contended the allegation was false, and that Staub had left a voice mail message for Korenchuk that Staub was leaving his desk.
  • Buck then relied on Korenchuk’s allegation (about Staub leaving his desk without informing a supervisor), reviewed Staub’s personnel file, and fired Staub. Buck’s termination notice, relying on Korenchuk’s allegation, stated that Staub had violated the “corrective action” directive not to leave his desk without notifying a supervisor.

So this sequence of events has

  1. Mulally (the “clever monkey”, with discriminatory intent) disciplining Staub with the “corrective action”,
  2. Korenchuck (the second “clever monkey”, with evidence of discriminatory motive) making allegations that Staub violated the “corrective action” to Buck (the cat, with no evidence of discriminatory motive);
  3. Buck, in reliance on Korenchuk’s allegation that Staub violated Mulally’s “correction action”, fired Staub.

USERRA and a “Motivating Factor” in the Employer’s Action

USERRA prohibits an employer from taking adverse action against an employee based on an employee’s membership in military service, such as being a member of the Army reserve. 38 U.S.C. § 4311(a).

An employer violates USERRA if an employee’s military service was a “motivating factor” in the “employer’s action” against the employee, unless the employer can prove that the adverse action “would have been taken in the absence of such membership. 38 U.S.C. § 4311(a).

Justice Scalia identified the difficult issues in looking at the “cat’s paw” scenario:

The central difficulty in this case is construing the phrase “motivating factor in the employer’s action.” When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in or obligation to a uniformed service, a motivating factor obviously exists. The problem we confront arises when that official has no discriminatory animus but is influenced by previous company action that is the product of a like animus in some-one else.

Thus, to put it in terms of Staub’s case, if Mulally or Korenchuk had fired Staub, the Court’s would not have difficulty in concluding that Staub’s military service was a “motivating factor”  in the termination. But since the decision to terminate was made by Buck, the liability of the “company” has been less clear for the previous courts.

In examining the issue, Justice Scalia observed an important reality in corporate decision-making in employment decisions:

An employer’s authority to reward, punish, or dismiss is often allocated among multiple agents. The one who makes the ultimate decision does so on the basis of performance assessments by other supervisors.

Justice Scalia for the Court then set out the key holding in Staub’s case, that the employer may be held liable under some situations involving the broader “cat’s paw” scenario:

We therefore hold that if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action,3 and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.

Another way to put this holding is that an employer may be liable for a termination where the actual decision-maker lacks any discriminatory motive, but where:

  1. The innocent decision-maker relies upon information provided (or action taken) by another supervisor (“the bad supervisor”) of the plaintiff; and
  2. The bad supervisor harbors discriminatory animus (ill will) against the plaintiff; and
  3. The bad supervisor’s information provided to the innocent decision-maker is motivated by the bad supervisor’s discriminatory animus; and
  4. The information provided or action taken by the bad supervisor is intended by the bad supervisor to cause an adverse employment decision against the plaintiff; and
  5. The information provided or action taken by the bad supervisor is the proximate (actual, direct) cause of the adverse employment action against the plaintiff.

Justice Scalia for the Court made it clear that the fact that the innocent decision-maker applies independent judgment in reaching the decision does always not insulate the employer from liability:

We do not think that the ultimate decision maker’s exercise of judgment automatically renders the link to the supervisor’s bias “remote” or “purely contingent.” The decision-maker’s exercise of judgment is also a proximate cause of the employment decision, but it is common for injuries to have multiple proximate causes. .  . .  Nor can the ultimate decision maker’s judgment be deemed a superseding cause of the harm. A cause can be thought “superseding” only if it is a “cause of independent origin that was not foresee-able.” (citations omitted).

What is the Import of Staub v. Proctor Hospital?

Even though the decision in Staub pertained to a claim for military service-related discrimination under USERRA, language from the decision strongly suggests that the holding will also apply to claims for employment discrimination under Title VII of the Civil Rights Act of 1964, because of the similarity in the causation language between USERRA and Title VII:

The 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.” 42 U. S. C. §§2000e–2(a), (m).

So a pretty clear operating assumption for employers should be that the holding in Staub on USERRA should apply to Title VII and any other federal employment discrimination statute that has causation language similar to USERRA.

Resources for Further Reading

A transcript of the oral argument on November 2, 2010 in the case is available at the Supreme Court’s web site, and you can also listen to the oral argument (with a synchronized transcript) at the Oyez site. And for extensive coverage of the case, including analysis, oral argument coverage, briefs, and a whole lot more, you can go to the page devoted to Staub v. Proctor Hospital at the always-wonderful SCOTUSBlog.

Here is the full opinion in Staub v. Proctor Hospital, which I uploaded to Scribd:

 

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Drew M. Capuder

Publisher of Drew Capuder's Employment Law Blog. Lawyer with more than 29 years experience, focusing on employment law, commercial litigation, and mediation. Extensive trial and appellate experience in state and federal courts. Call Drew at 304-333-5261
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