The Supremes Speak on Cat’s Paw liability

The U.S. Supreme Court has weighed in on an awaited decision in a case involving a “cat’s paw” theory of liability. In Staub v. Procter Hospital (http://case.lawmemo.com/us/staub.pdf) the Court 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.”

The facts of the case are as follows: Plaintiff’s supervisors going two levels up the chain of authority were allegedly hostile towards Plaintiff’s military service obligations. The supervisors gave the plaintiff a disciplinary warning and reported a violation of the terms of the warning. Another manager, three levels up the chain of command reviewed the personnel file and made the termination decision. The plaintiff alleged the underlying discipline had been fabricated as a result of the hostility towards his military service obligations.

The jury found in favor of the plaintiff, but the Seventh Circuit Court of Appeals reversed, finding that the (third level) decisionmaker had relied on more than the tainted disciplinary decisions of the two lower supervisors. The Supreme Court reversed.

USERRA prohibits discrimination based on an employee’s military service record or obligation for additional service if that service is a motivating factor in a challenged employment decision. Relying on general principles of agency and tort law, Justice Scalia, writing for the Court stated, “it is axiomatic under tort law that the exercise of judgment by the decisionmaker [the third level supervisor] does not prevent the earlier agent’s action (and hence the earlier agent’s discriminatory animus) from being the proximate cause of the harm.” The case was remanded, leaving open the possibility that the trial court’s jury instruction was harmless error.

The Court’s decision call’s into question a number of lower court decisions allowing employers to escape liability when it can be shown that factors beyond those allegedly tainted by discriminatory bias are part of the decision. The waters appear poised to remain muddied, as the application of general tort and agency theories leaves room for debate.