Mar 02, 2011

Supreme Court Victory for Employees in Discrimination Case

Yesterday, the Supreme Court issued its much-anticipated decision in Staub v. Proctor Hospital, in which an employee claimed that he was discriminated against because of his military service, in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA). This case has been dubbed the "cat's paw" case, after an Aesop's fable. (Justice Scalia's opinion recounts the narrative details, if you're interested; they involve a cat, a monkey, some roasting chestnuts, and a moral about princes and kings). The upshot in these cases is that one person has the intent to discriminate, but another person -- without a discriminatory motive -- ultimately makes the decision to fire the employee. In this situation, courts have split on whether the employer is liable for discrimination. 

In the Staub case, the evidence showed that Staub's immediate supervisor and her supervisor were hostile to his service obligations as a member of the Army Reserves. Both had made negative comments about it and were described as "out to get" Staub. Staub was written up for violating a rule about leaving his work area; he claimed that there was no such rule and, at any rate, he had not left his work area. As part of the disciplinary action, Staub was required to check in with a supervisor whenever he left his work area. Several months later, one of the hostile supervisors reported to Buck, the vice president of HR, that Staub had violated this directive by leaving his work area without checking in; Staub again denied the accusation. Buck fired Staub for violating the requirement.  

A jury found in Staub's favor, but the federal Court of Appeals reversed this victory. The Court found that Buck wasn't motivated by discrimination. In this situation, the company could be held liable for discrimination based on the hostile motives of the supervisors only if Buck "blindly relied" on their information in firing Staub. Because Buck looked into the facts a bit before making her decision ( the Court of Appeal admitted that her "investigation" wasn't very thorough) and wasn't "wholly dependent" on the recommendations of the hostile supervisors, the Court of Appeals found that the company wasn't liable. 

The Supreme Court overruled this decision. It found that an employer is liable if:
  • a supervisor takes action, motivated by discriminatory bias, intending to cause an adverse employment action against the employee, and
  • the supervisor's action is a proximate cause of the action against the employee. 
Because Buck relied on the hostile supervisors' disciplinary write-up and version of the facts in deciding to fire Staub, rather than independently examining those facts -- and Staub's allegation that they were false and motivated by discrimination -- in making her decision, the company was liable. 

This is a big win for employees, not least because the language of USERRA also appears in Title VII and other laws prohibiting discrimination, so the effect of the case is likely to be far-reaching. Here are a few takeaways for employers looking to avoid cat's paw liability:
  • Investigate! Cat's paw liability depends on causation -- in other words, the person with the discriminatory motive must have some effect on the decision. If the decision maker independently examines the facts, the causal chain is broken. Presumably, the decision maker will uncover the discriminatory bias (and therefore decide not to take action against the employee at all). It wouldn't have been hard in the Staub case, in which these supervisors were apparently willing to tell everyone how they felt about Staub's military obligations.  
  • Train managers. In the Staub case, two supervisors appear to have had an ongoing campaign against an employee for wholly inappropriate and discriminatory reasons. A little training could have gone a long way here. If supervisors aren't making discriminatory statements and decisions in the first place, they won't be creating liability for the company. 
  • Think about settlement. For the unhappy employers that find themselves on the wrong end of a valid cat's paw claim, the Supreme Court's decision virtually guarantees that the case won't end early. Questions of motive (in a cat's paw case, the motives of at least two people: the allegedly discriminatory supervisor and the ultimate decision maker), cause, and the effectiveness of an investigation can be answered only by examining the underlying facts. If those facts are in dispute, the employer won't be able to end the case by winning a motion for summary judgment. Instead, the case will go to trial, where a jury will have to ultimately decide where the truth lies.