Section of Labor and Employment Law Flash | November/December 2010
Staub v. Proctor Hospital: Will the Uncertainty Surrounding “Cat’s Paw” Liability be Resolved?
By: Jennifer L. Gokenbach
On November 2, 2010, the U.S. Supreme Court heard oral argument in Staub v. Proctor Hospital – a controversial case involving the application of the “cat’s paw” theory of liability. Eight Justices will decide the issue presented: Under what circumstances may an employer be liable for the unlawful intent of an employee who caused or influenced but did not make the ultimate employment decision. Justice Elena Kagan was recused since she filed an earlier brief in the case at the Court’s urging in her former role as Solicitor General.
“Cat’s Paw” Liability
The “cat’s paw” theory of liability originates from a 17 th century fable written by poet Jean de La Fontaine called “The Monkey and the Cat.” In the fable, Bertrand, a sly monkey, convinces Ratto, a nice cat, to pull chestnuts from a hot fire. Ratto unwittingly agrees and pulls chestnuts one by one from the fire, each of which is gobbled up by Betrand. Robbed of all chestnuts, Ratto was left only with a burned paw.
Generally, under federal employment discrimination laws, employers are liable only for the actions of employees or supervisors who actually take adverse action against an employee based on an unlawful motive. However, courts use the term “cat’s paw” to also impute liability to employers in situations where an innocent, ultimate decision-maker is used as a pawn by another employee to accomplish his or her discriminatory purpose.
Background of Case
Vincent Staub, an Army reservist, was employed by Proctor Hospital in Peoria, Illinois as an angiography technologist. Staub and his supervisor had a difficult relationship for some time, which, according to the record, was in part due to his military reserve duties. On April 20, 2004, when Staub’s supervisor could not find Staub at his workstation, she went to the Vice-President of Human Resources to complain that Staub was (again) missing. Apparently, Staub left a voice mail for his supervisor about going to the cafeteria for lunch since she was not in her office when he left. Upon returning, Staub was asked to accompany his supervisor to the office of the Vice-President of Human Resources, at which time, he was terminated. The Vice-President of Human Resources testified that she terminated Staub based on his supervisor’s earlier complaint and his personnel record, which included prior write-ups and warnings for being unaccounted for while at work.
Staub filed a lawsuit against Proctor Hospital, claiming that his supervisor fed false information to the Vice-President of Human Resources, which led to the decision to terminate him. At trial, evidence of Staub’s supervisor’s animus toward his military service was admitted ( e.g., when Staub notified his supervisor of his Army obligations, she responded with profanity and would not accommodate his schedule). After the trial, the jury found that Proctor Hospital unlawfully discriminated against Staub in violation of the Uniform Services Employment and Reemployment Rights Act (“USERRA”) and awarded him $57,640 in damages. USERRA makes it unlawful for employers to take adverse action against employees who serve in the military because of discriminatory animus toward individuals who are on active, reserve or retired duty.
Proctor Hospital appealed to the Seventh Circuit Court of Appeals, which overturned the jury’s verdict. The Seventh Circuit held that the district court should have first determined whether a reasonable jury could find that the ultimate decision-maker (the Vice-President of Human Resources) was under the “singular influence” of the supervisor, and since there was insufficient evidence to support such a determination, the district court erred in admitting evidence regarding the supervisor’s animus. Staub’s appeal to the U.S. Supreme Court followed.
Split in Circuits
Although the federal circuits have each adopted some form of “cat’s paw” liability, there is a lack of a uniform standard. For example, the Ninth Circuit applies a loose interpretation of the theory, holding that an employer’s liability may be imputed if the manager with the retaliatory motive was merely “involved” in the adverse employment decision. Similarly, the Tenth Circuit applies a less demanding “causation” standard, in which the discriminatory motives of employees other than the decision-maker may result in employer liability if such motives help “cause” the adverse action.
In contrast, the Seventh Circuit applies a stricter interpretation, requiring that the ultimate decision-maker be under the “singular influence” of the employee with discriminatory animus. Even more restrictive, the Fourth Circuit applies an “actual decision-maker” standard, meaning that an employer can only be held liable for the actions of a biased non-decision-maker so long as the decision-maker gave “blind approval” to a decision actually made by a subordinate.
Arguments on Appeal
During oral argument, Staub argued that employers should be held liable on a theory of “agency” for each discriminatory link in the chain of decision making, which Justice Kennedy referred to as “sweeping” liability. The Hospital argued that the Court should consider only the motivations of the final decision-maker, which Justices Roberts, Ginsberg and Breyer questioned was consistent with the statutory language that the protected status be “a ‘motivating factor’ in the employer’s action or conduct.”
Even though Staub v. Proctor Hospital involves USERRA, employers and employees alike are watching the case closely, as the decision will likely impact the application of “cat’s paw” liability under Title VII of the Civil Rights Act and other federal anti-discrimination laws, as well as have ramifications on personnel decisions generally going forward.
Jennifer L. Gokenbach is Of Counsel with Ogletree, Deakins, Nash, Smoak & Stewart, P.C., one of the nation's largest labor & employment firms. She represents employers and management in a wide variety of employment disputes, including discrimination, harassment, retaliation, disability, wage & hour, breach of contract, and other employment-related claims under both federal and state law. She resides in her firm's Denver office, which handles single- and multiple-plaintiff cases, as well as class actions.