• After "Cat's Paw" Case, Employers May Still Land On Their Feet
  • March 9, 2011 | Authors: David E. Constine; Richard Gerakitis; Evan H. Pontz; D. Eugene "Gene" Webb
  • Law Firms: Troutman Sanders LLP - Richmond Office ; Troutman Sanders LLP - Atlanta Office ; Troutman Sanders LLP - Richmond Office
  • Can an employer be held liable for an employment decision that was based on input from a supervisor without decision-making power, who harbors discriminatory animus?

    Yes, according to a unanimous Supreme Court. In a case decided this week, Staub v. Proctor Hospital, the Court addressed the scope of the so-called “cat’s paw” theory of liability, in which employers can be liable for the discriminatory acts of a supervisor without decision-making power, so long as those acts significantly contributed to the ultimate adverse employment decision.

    The cat’s paw theory is an allusion to a 17th century fable in which a monkey is able to use an unwitting cat for his own purposes. As the story goes, the monkey persuades a cat to reach into a fire to retrieve roasting chestnuts. The cat burns his paw in the attempt, and the monkey is able to enjoy the fruits of the cat’s misfortune. Applied to the employment law context, the monkey is a supervisor harboring discriminatory animus, making recommendations or issuing reviews to influence the decisions of others. Employers, of course, are the cats who get burned by this sort of monkey business.

    Plaintiff Vincent Staub, a member of the Army Reserve, alleged that his supervisors were hostile to his reserve military obligations, activities in which he enjoyed protection under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), a federal law that functions similar to Title VII of the Civil Rights Act. The supervisors, motivated by their unlawful bias toward his military obligations, issued disciplinary warnings and accused Staub of violating company policy, according to his account. The ultimate decision to terminate Staub, however, was made by the company’s vice-president of human resources, who reviewed Staub’s personnel file and relied on the complaints and reports of the supervisors, but who had no knowledge of the supervisors’ hostility to Staub’s military activities. Yet, the employer was found liable for an unlawful discharge under USERRA.

    The Supreme Court rejected a bright-line rule that would immunize employers from cat’s paw liability when they conduct an investigation prior to making an employment decision. In a concurring opinion, Justice Alito pushed for such a rule, arguing that if an employer conducts an independent investigation, the supervisor’s discriminatory animus would no longer be a “motivating factor” in the employment decision as required by USERRA. Instead, held the Court, an employer’s liability depends on whether the supervisor’s animus was a “proximate” cause (as opposed to the singular influence) in the ultimate employment decision.

    Even though the Court refused to completely protect employers who conduct independent investigations, we believe that proper investigations are the best defense against “cat’s paw” claims, especially when an employee is being terminated. The employer in this case could have done better. The decision-maker did not find out about Staub’s allegations of bias until after his termination, when he challenged his firing through the company’s grievance process. A thorough interview of the employee being terminated should uncover that sort of issue at the appropriate time, prior to a termination, helping to ensure that the employer makes a well-informed decision.

    The Supreme Court has remanded this case for further proceedings in the lower courts. We expect that questions left open by the Court’s decision - including the scope of an employer’s duty to investigate in order to protect against cat’s paw claims - will be answered in the coming years.