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"The Cat’s Out of the Bag: U.S. Supreme Court Endorses ‘Cat’s Paw’ Theory of Liability in Employment Cases"

By Andrew M. Moskowitz and Carly Skarbnik Meredith
(New Jersey Law Journal, Vol. 204 – No 10)

In Staub v. Proctor Hospital, 131 S. Ct. 1186 (March 1, 2011), the United States Supreme Court addressed when an employer may be held liable due to “the discriminatory animus of an employee who influenced, but did not make, the ultimate employment decision.” The majority opinion, issued by Justice Scalia, endorsed the “cat’s paw” theory of liability. Although Staub did not involve a Title VII claim, the case’s holding will almost certainly be applied to claims brought under Title VII. The Court’s holding in Staub could also potentially be applied to claims asserted under New Jersey state law.

The cat’s paw theory gets its name from a 17th century fable written by Jean de la Fontaine. In the story, a monkey persuades a cat to pull chestnuts out of a fire. In the process, the cat gets burned while the monkey gobbles up the chestnuts. Today the term cat’s paw means “one used by another to accomplish his purposes.”

In the workplace context, an employer (the cat) may be held liable for discrimination even if the actual decision to terminate was made with no unlawful animus on the part of the firing agent. Specifically, when a supervisor with a discriminatory animus (the monkey) performs an act which is a causal factor in the adverse employment action, the employer is responsible.

In Staub, the statute at issue was the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. § 4301 et. seq. As noted by Justice Scalia, “[t]he statute is very similar to Title VII,” as both statutes prohibit adverse employment actions where discrimination was a motivating factor. Under USERRA “[a]n employer shall be considered to have engaged in actions prohibited [by USERRA] . . . if the person’s membership in the uniformed services is a motivating factor in the employer’s action.” 38 U.S.C. § 4311(c). In the same vein, Title VII prohibits employment actions where an employee’s “race, color, religion, sex, or national origin” was a motivating factor. 42 U.S.C. §§ 2000e–2(a) and (m).

Vincent Staub was employed as an angiography technician for Proctor Hospital. Throughout his employment, Staub was a member of the United States Army Reserves. Evidence presented at trial demonstrated that Staub’s supervisor, Janice Mulally and Mulally’s supervisor, Michael Korenchuk, were hostile to Staub’s military obligations.

Mulally regularly scheduled Staub for shifts when she knew he had Reserve commitments. She also made several disparaging comments about his military duties and asked one of Mr. Staub’s co-workers to help her “get rid of him.” In January 2004, Mulally issued a “corrective action” disciplinary warning to Staub. Four months later, Korenchuk informed Linda Buck, Proctor Hospital’s vice president of human resources, that Staub had violated the corrective action. In reliance on Korenchuk’s accusation, and after reviewing Staub’s personnel file, Buck made the decision to terminate Staub’s employment.

Staub sued Proctor Hospital and alleged that his membership in the Reserves was a motivating factor in the decision to terminate his employment. At trial, the jury found that the decision to terminate him was motivated by discriminatory animus.

The Seventh Circuit reversed. See Staub v. Proctor Hosp., 560 F.3d 647 (7th Cir. 2009). In so holding, the court determined that, for a cat’s paw case to succeed, the discriminatory animus of a nondecision maker had to have a “singular influence” over the decision maker. Inasmuch as Buck had considered Staub’s personnel file, she did not merely rely on the representations of Mulally and Korenchuk. Thus, the Seventh Circuit held that, because the decision maker’s determination was not wholly dependent on the representations of the nondecision maker, Proctor Hospital was entitled to judgment as a matter of law.

The Supreme Court reversed. In its opinion, the majority held that “if 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, because Buck had relied on both the corrective action and the statement by Korenchuk, discrimination could have been a causal factor in the decision to terminate Staub. In its analysis, the Court focused on construing the statutory phrase “motivating factor in the employer’s decision.” The Court found that when a “decision to fire is made with no unlawful animus on the part of the firing agent, but partly on the basis of a report prompted (unbeknownst to that agent) by discrimination,” discrimination could be considered a “causal factor” in the decision to terminate the employee.

Proctor Hospital had argued that a decision maker’s independent judgment or, alternatively, a decision maker’s independent investigation and rejection of allegations of discriminatory animus should immunize the employer from liability. However, the Court rejected those arguments. Specifically, the Court declined to adopt “such a hard-and-fast rule,” and noted that it was “aware of no principle in tort or agency law under which an employer’s mere conduct of an independent investigation has a claim-preclusive effect.”

The Court further noted that multiple individuals usually have the authority to reward or punish an employee and, as such, the ultimate decision maker relies on the representations of those other individuals. The Court held that the biased report still may remain a causal factor “if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.”

As noted above, although USERRA was the statute at issue, due to the two statutes’ similarities, the Staub holding will almost certainly be applied to claims brought under Title VII. Both statutes require only that plaintiffs demonstrate that discrimination was a “motivating factor” in the adverse employment action.

The Staub holding could also impact courts’ analyses of New Jersey employment statutes. Although, prior to Staub, the Third Circuit had endorsed the cat’s paw theory of liability in a LAD case (see Delli Santi v. CNA Ins. Cos., 88 F.3d 192, 200 & n.11 (3d Cir. 1996)), research has disclosed only one unpublished New Jersey case addressing the issue of the cat’s paw or “subordinate bias.” See Kwiatkowski v. Merrill Lynch, Docket No. A-2270-06T1 (App. Div. Aug. 13, 2008).

Staub is clearly a significant case. Employers will have a far more difficult time arguing that, due to the absence of a bias on the part of the ultimate decision maker, they cannot be held liable. Rather, the issue will be whether the biased supervisor’s discriminatory actions proximately caused the adverse employment action. Because this analysis is inherently fact-specific, the result could be that fewer employment cases will be dismissed at the summary judgment stage of the litigation.

 

Debra Lutsky