In an opinion that potentially expands an employer’s liability in discrimination cases, the Supreme Court has found that an employer can be found liable under the Uniformed Services Employment and Reemployment Rights Act (USERRA) for the discriminatory intent of company officials who influenced – but did not make – the ultimate adverse employment decision. In Staub v. Proctor Hospital, (pdf) the Court held that an employer is liable under USERRA “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action,” and that act “is a proximate cause of the ultimate employment action.” Appellate courts have applied varying standards under this “cat’s paw” theory of imputed liability, which holds an employer accountable for the unlawful motives and actions of an official who dupes or influences an unbiased decision maker into acting unlawfully.

In the instant case, employee Vincent Staub alleged that he was unjustly terminated in violation of USERRA because his supervisors resented the fact that he was a member of the Army Reserves. He claimed that the stated reasons for his termination – insubordination, shirking, and attitude problems – were merely pretext for discrimination based on his military association. During his trial, Staub introduced evidence that officials in his department made disparaging comments about his commitments to Reserve duty and its alleged “strain” on the department and fellow co-workers who covered his shifts during his service periods. He also alleged that his direct supervisor who made such negative comments falsely disciplined him for violating a nonexistent work rule in order to facilitate his termination. The crux of his USERRA charge is that the vice president of human resources, who ultimately made the decision to terminate his employment, was unduly influenced by those who harbored animosity about his military service. A jury found in his favor, but the Seventh Circuit Court of Appeals set aside that verdict and ordered dismissal of the case. The appellate court reasoned that under controlling Seventh Circuit precedent, an employer can only be held liable for the unlawful motives of the formal decision maker, or another individual who “so dominated” the decision-making process as to constitute the “functional decision maker.” The Supreme Court disagreed with the appellate court, and reversed and remanded the decision to the Seventh Circuit for further consideration.

USERRA forbids an employer from denying “employment, reemployment, retention in employment, promotion, or any benefit of employment” on the basis of a person’s “membership” in or “obligation to perform service in a uniformed service.” The law further states that an employer is considered to have unlawfully engaged in such acts “if the person’s membership . . . is a motivating factor in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such membership.”

According to the Court, the “central difficulty” in this case was assessing what is meant by “motivating factor.” The employer contended that it could not be liable for discrimination unless the de facto decisionmaker (the technical decisionmaker or the agent for whom he is the “cat’s paw”) is motivated by discriminatory animus. The Supreme Court rejected this argument. Applying tort law principles, the Court reasoned that

it is axiomatic under tort law that the exercise of judgment by the decisionmaker does not prevent the earlier agent’s action (and hence the earlier agent’s discriminatory animus) from being the proximate cause of the harm. Proximate cause requires only “some direct relation between the injury asserted and the injurious conduct alleged,” and excludes only those “link[s]that are too remote, purely contingent, or indirect.” We do not think that the ultimate decisionmaker’s exercise of judgment automatically renders the link to the supervisor’s bias “remote” or “purely contingent.” (internal citations omitted).

Finding otherwise:

would have the improbable consequence that if an employer isolates a personnel official from an employee’s supervisors, vests the decision to take adverse employment actions in that official, and asks that official to review the employee’s personnel file before taking the adverse action, then the employer will be effectively shielded from discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse action. That seems to us an implausible meaning of the text, and one that is not compelled by its words.

(emphasis in original)

The court also rejected the hospital's argument that its independent investigation negated the effects of the prior discrimination:

[I]f the employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action (by the terms of USERRA it is the employer’s burden to establish that), then the employer will not be liable. But the supervisor’s biased report 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.

Applying its reasoning to the facts of the case, the Court found that there existed sufficient evidence for a jury to find that Staub’s supervisors intended to use their power to indirectly cause his termination because of his military affiliation, and that their actions were causal factors in the decision by the Human Resources Vice-President to terminate Staub.

Justice Scalia delivered the opinion of the Court, in which Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer and Sotomayor joined. Justice Alito filed a concurring opinion, in which Justice Thomas jointed. Justice Kagan did not take part in the consideration or decision.

The Court examined the scope of imputed liability only in the context of USERRA, but it noted that this statute “is very similar to Title VII,” raising the likelihood that the cat’s paw theory will also be applied to discrimination claims based upon race, sex, religion, national origin, age and other protected characteristics. To control such expanded liability, it would behoove employers to ensure that all company officials – not just Human Resources staff or other top-level decision makers – receive anti-discrimination law training covering the full range of employment laws.

For more information on this decision, see Littler's ASAP:  Beware the Sharp Claws of the Cat's Paw: U.S. Supreme Court Endorses Employer Liability for Personnel Decisions Influenced by Biased Supervisors by Gaye Huxoll.

Photo credit:  Jeka Gorbunov