Supreme Court Extends a Helping “Paw” to Employment Discrimination Plaintiffs

Courts have long struggled with whether an employer can be liable for employment discrimination if an employment action is taken by an unbiased supervisor who relies on the input of a biased supervisor without knowing of the bias. These so-called “cat’s paw” cases¹ have been challenging because the decision-maker has acted without a discriminatory motive. In Staub v. Proctor Hospital, the United States Supreme Court held that the employer cannot avoid liability merely by showing that the ultimate decision-maker was unbiased if the ultimate decision-maker relied on input from a biased supervisor.

The Court’s Decision

The anti-discrimination legislation at issue in Staub was the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) which bars discrimination against members of the armed services. As with Title VII, which prohibits employment discrimination on the basis of race, color, religion, sex or national origin, a plaintiff must establish that his protected status (i.e., membership in the armed services) was a “motivating factor in the employer’s action.” 

Staub presented an extreme twist on the familiar “cat’s paw” case.  The following facts — all of which weigh strongly in favor of the employee — were undisputed: (1) two supervisors who were motivated by hostility toward Staub’s military obligations issued a written warning; (2) three months later one of these biased supervisors reported Staub’s violation of this same written warning; (3) the “pink slip” issued by the unbiased vice president of human resources only identified one reason for termination — Staub’s alleged violation of the biased supervisors’ written warning; and (4) the unbiased vice president of human resources’ “independent investigation” involved little more than a review of Staub’s personnel file. In addition, when the plaintiff claimed, in an internal grievance, that the supervisor had fabricated the reason for the discipline because of hostility towards the plaintiff’s military obligations, the vice president of human resources failed to investigate.

After considering this overwhelming evidence connecting the biased supervisors’ actions to the unbiased supervisor’s decision to terminate Staub’s employment, the Supreme Court easily found that the supervisor’s actions were a “motivating factor” in the vice president of human resources’ decision to terminate. The Court proceeded to reverse the Seventh Circuit’s reversal of the jury verdict in favor of Staub. More significantly, the Court refused to adopt a rule whereby an employer can immunize itself from liability by conducting an independent investigation when, despite investigation, the action of a biased supervisor remains the proximate cause of the adverse action taken.

Staub does not go so far as to hold that employers will be liable for discrimination whenever a biased supervisor takes action with respect to the employee. The Supreme Court observed that an employer can avoid liability where (1) an investigation results in adverse action for reasons unrelated to the supervisor’s original biased action, or (2) the employer determines that the adverse action is, apart from the supervisor’s recommendation, entirely justified. In less certain terms, the Court also suggested that employers may avoid liability where the connection between the biased supervisors’ action and the employment decision is more remote than it was in Staub.

Where Do We Go From Here?

Staub presents a teaching moment to remind employers that sound and consistently enforced human resources policies and procedures represent the best vehicle through which organizations can avoid litigation. The following are some important takeaways from Staub to mitigate litigation risk:

• Document All Reasons for Termination. Courts and juries tend to place great weight on the written documentation of an employment decision. The jury was not particularly moved when Proctor Hospital argued that Staub’s performance issues were not limited to those identified in his “pink slip.” Employers should ensure that documentation sets forth all of the reasons underlying the employment decision.
• Fully Vet Adverse Actions. Staub highlights the need for employers to carefully vet decisions of whether to take adverse action against employees, and serves as a reminder that simply relying on the recommendation of a supervisor — rather than testing it — can lead to liability. When adverse action is recommended, decision-makers should gather input from all supervisors who may have relevant information, thus avoiding pure reliance on any particular individual who may harbor some bias. The performance or conduct of the relevant employee should be measured against her peers to gauge whether she is receiving equal treatment. The employee should be given the opportunity to respond to allegations of poor performance or misconduct, and the employer should follow-up on any issues or disputes raised. In Staub, the hospital may have avoided litigation entirely if the decision-maker had looked into the employee’s allegation regarding the role of anti-military bias.
• Document All Performance Issues. Staub also reflects a related phenomenon whereby courts and juries place great emphasis on the employee’s recent performance reviews. Staub received a score of 97.3 out of 100 in the annual performance review preceding the termination of his employment.  This A+ review seriously undercut the argument that Staub’s performance issues went beyond those identified in the biased supervisors’ written warning. Employers should ensure that performance reviews identify all performance issues. While employers often accentuate the positive to build morale or for other sound business reasons, this strategy can backfire in subsequent litigation.
• Train Supervisors. Staub reminds us that employers can take employment actions through both their human resources department and the supervisors of individual employees. Thus, it is critically important to identify all “supervisors” in your organization and provide them with adequate training regarding applicable federal, state and local anti-discrimination laws.
• Establish, Follow and Make All Employees Aware of Grievance Procedures. While the evidence of Staub’s supervisors’ bias toward his military service was overwhelming, most of it was never brought to the attention of the vice president of human resources who issued the “pink slip.” Effective grievance procedures can often uncover bias at the supervisor level and empower human resources staff to take corrective action. It is critically important to establish grievance procedures, follow them consistently and remind employees of their existence. Employees should be trained and periodically reminded to report bias and harassment to human resources and to use human resources as a vehicle for resolving disputes with supervisors.

For more information on this alert, please contact any of the lawyers listed below:

Boston 
John Adkins, john.adkins@bingham.com, 617.951.8551
Jenny Cooper, jenny.cooper@bingham.com, 617.951.8473
Louis Rodriques, Co-chair, Labor and Employment Group, lou.rodriques@bingham.com, 617.951.8340

Los Angeles/Orange County 
Jacqueline Cookerly Aguilera, jackie.aguilera@bingham.com, 213.229.8439
Debra Fischer, debra.fischer@bingham.com, 213.680.6418

San Francisco
James Severson, james.severson@bingham.com, 415.393.2242

New York
Douglas Schwarz, douglas.schwarz@bingham.com, 212.705.7437

Tokyo
Mie Fujimoto, mie.fujimoto@bingham.com, 81.3.6721.3138

¹ The “cat’s paw” reference is derived from an Aesop fable where a monkey induces a cat to extract roasting chestnuts from a fire. After the cat burns his paw complying with the request, the monkey takes the chestnuts and leaves the cat with nothing. In what has become known as the “cat’s paw” employment discrimination case, the ultimate decision-maker represents the cat that takes the monkey’s (biased supervisor’s) word for it in making an employment decision on behalf of an organization.