Wednesday, November 3, 2010

Reading the tea leaves: Staub v. Proctor Hospital and the “Cat’s Paw”

Before we get into the specifics of the Staub case, let’s first discuss the relationship between a cat’s appendage and employment discrimination law. The “cat's paw” derives from a 17th century fable by French poet Jean de la Fontaine. In “The Money and the Cat,” a monkey tricks a cat into scooping chestnuts out of a fire so that the monkey can eagerly gobble them up, leaving none left for the cat. It generally describes a situation where one is unwittingly manipulated to do another’s bidding. Drawing the parallel between la Fontaine’s fable and discrimination law, one seeks to hold an employer (the cat) liable for the discriminatory animus of an employee who played no role in the decision, but nevertheless exerted some degree of influence (the monkey). As Mike Maslanka put it on his Work Matters blog, the question is what is an employer’s liability “when the guy who pulled the trigger is pure, but the guy who loads the gun is not?”

Thus, the argument in the case is framed like this:

  • Employers argue that federal discrimination laws make the employer liable only for the actions of the employee or supervisor who takes the discriminatory action.
  • Employees,  however, argue that the is enough that the person with the discriminatory animus (the money) played some role in the process, even if the decision maker (the cat) is completely unaware of the animus.

As for the specifics of the case, Staub brought his claim under USERRA, which, among other things, protects those in military service from discrimination upon their return to employment from active duty. Staub had been a long-time employee of Proctor Hospital before being called upon to serve in Iraq. Many at the hospital were critical of Staub’s military service because of the strain it put on those who had to cover from him in his absence. When the Vice President of HR, who held no hostility towards Staub, terminated him, he sued, claiming that although the decision maker was not personally biased against his military service, she fired him based on the hostility of Staub’s direct supervisors.

The 7th Circuit reversed a jury verdict for Staub, holding:

[W]here an employee without formal authority to materially alter the terms and conditions of a plaintiff’s employment nonetheless uses her “singular influence” over an employee who does have such power to harm the plaintiff for racial reasons, the actions of the employee without formal authority are imputed to the employer…. [W]here a decision maker is not wholly dependent on a single source of information, but instead conducts its own investigation into the facts relevant to the decision, the employer is not liable for an employee’s submission of misinformation to the decision maker.

In other words, under the 7th Circuit’s pronouncement of the cat’s paw, the employer can only be liable if the decision maker is only influenced by the animus of the non-decision makers.

Yesterday, the Supreme Court held oral argument [transcript, in pdf] in this case. It’s hard to read Supreme Court Justices at oral argument. Sometimes they play devil’s advocate, and sometimes they genuinely challenge the attorney. Regardless, I found the following question from Justice Breyer (one the Court’s more liberal justices) to the employer’s attorney to be insightful:

You have A and B, they are both supervisors; in the one case B fires the employee because he is in the Army, and he says it: Ha, ha, that’s why I’m doing it. In the second case he fires the employee … for a perfectly good reason, but A has lied about it. And the reason A lied about it was because she wanted to tell him a lie so B would fire the employee, and her reason is because he’s in the Army. Those two situations, the second seems to me one of … 80 million situations, fact-related, that could arise, and I don’t know why we want a special standard for such a situation. Why not just ask the overall question, was this action an action that was -­ in which the bad motive was a motivating factor. Forget psychoanalysis of A. B is good enough -- or vice versa.

I also found insightful the following exchange between Justices Alito and Kennedy and the employee’s attorney:

   Justice Alito: Even -- even if the employer at that time did every -- made every reasonable effort to investigate the validity of all the prior evaluations, still the employer would be on the hook?

   A: Yes. There is nothing in the statute or in the common law that creates a special rule for thorough investigation.

   Justice Kennedy: Well, that's a sweeping rule. I was going to ask a related hypothetical. Suppose the -- the officer who is in charge, charged with the decision to terminate or not to terminate says: I'm going to have a hearing. You can both have counsel. And you have who, is it -- suppose Buck -- suppose the two employees that were allegedly anti-military here testified and they said there was no anti-military bias, and the person is then terminated. Later the employee has evidence that those two were lying. Could he bring an action then?

   A: Yes. Yes.

   Justice Kennedy: That’s sweeping. That's almost an insurer’s liability insofar as the director of employment is concerned…. He has to insure. He has -- he has done everything he can, he has an hearing, and he has almost absolute liability.

Reading the tea leaves, it is likely that the cat’s paw will survive the Supreme Court’s review in a narrow form. I predict that the court will derive a standard that looks to the ultimate decision and the role that the animus of the non-decision maker played in that decision. I also think that the Court will craft an affirmative defense or other means to rebut the inference of the cat’s paw, such as the decision maker's independent investigation of the circumstances leading to the termination.

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