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When making termination decisions, beware the cat’s paw

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in Discrimination and Harassment,Employment Law,HR Management,Human Resources,Leaders & Managers,Performance Reviews

by Casey Nolan, Esq.

Managers and HR professionals are often pulled in many directions at once and don’t always have time to independently review the personnel decisions that line supervisors make.

But simply rubber-stamping a direct supervisor’s recommendation and approving an adverse employment decision without independently reviewing it can have costly ramifications.

Under what’s commonly referred to as the “cat’s paw” theory, an employee can win a discrimination claim even if the employer successfully proves that the actual decision-maker didn’t intend to discriminate—or even knew that the employee was a member of a protected class.

The cat’s what?

The cat’s paw theory gets its name from a parable describing what happens when an innocent accomplice is duped into doing the bidding of someone who is up to no good. (See box below.)

In the employment discrimination context, the cat’s paw theory refers to a situation where a biased employee who lacks ultimate authority influences a supervisor to make adverse employment decisions by supplying false or misleading information.

Although most federal courts agree that an employer can be liable under the cat’s paw theory, they disagree on the level of influence the biased subordinate must have over the primary decision-maker.

Some federal courts require the plaintiff to prove that the biased subordinate actually influenced the final decision. Others—including the 8th Circuit Court, which covers Minnesota employers—allow plaintiffs to present a cat’s paw claim if they can show that the biased subordinate simply played a role in the decision-making process.

Supreme Court ruling coming

In April, the U.S. Supreme Court granted review of Staub v. Proctor Hospital (09-400, U.S. Supreme Court) to resolve that conflict. The Supreme Court will hear the case in its 2010 term, which begins this fall.

The Staub case involves a claim made by Army Reservist Vincent Staub against his former employer, Proctor Hospital, under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Staub claims he was unlawfully discriminated against and ultimately terminated because of his military affiliation.

The key issue in the case is whether the hospital’s vice president of HR—who made the final decision to fire Staub—was unduly influenced by Staub’s direct supervisors, who had allegedly expressed anti-military sentiments and had previously tried to remove Staub.

Trial and appeal

At trial, the district court allowed Staub to present evidence to support his cat’s paw theory, and a jury found in his favor. On appeal, however, the 7th Circuit Court of Appeals ruled that, despite clear statements by Staub’s direct supervisors regarding their contempt for his military service, there was no evidence the vice president harbored any anti-military sentiment.

In sum, the 7th Circuit held that the cat’s paw theory of liability applies only if (1) the biased subordinate exerted “singular influence” over the decision-maker, and (2) the decision-maker clearly did not conduct an independent review.

The 7th Circuit held that there was insufficient evidence to support a verdict against the hospital under the cat’s paw theory because a reasonable jury could not find that the biased supervisors had singular influence over the decision-maker. In addition, the court held that the decision-maker conducted her own independent investigation (albeit one that the court found could have been “more robust”) before deciding to terminate Staub.

Thus, the court reversed the jury verdict in favor of Staub and ruled in favor of the hospital. Staub appealed to the Supreme Court.

Waiting for the court

The Supreme Court’s decision in Staub should clarify the law on cat’s paw liability. In the meantime, employers can take steps to establish safeguards to mitigate the risk that a subordinate’s bias will result in a finding of discrimination.

In particular, employers should be sure they have a comprehensive discrimination policy, including a mechanism that encourages employees to report discrimination within the company.

In addition, employers should consider providing discrimination training to all employees, not just managers. Employers should also conduct regular performance reviews and consider developing a multilevel review process of any proposed adverse employment actions.

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Author: Casey Nolan is an associate attorney practicing in the Employment Law Group at Gray Plant Mooty. She can be reached at (612) 632-3279 or at casey.nolan@gpmlaw.com.

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