Don’t get burned! The cat’s paw theory of discriminatory firing

Under what’s called the Cat’s Paw Theory, employers can’t de­­fend themselves against employment discrimination claims by saying they didn’t know a supervisor was biased.

The theory was first introduced in Shager v. Upjohn, a 1990 7th Circuit Court of Appeals decision. There, Judge Richard Posner used an old fable, The Monkey and the Cat, to describe situations in which a corporate decision-maker innocently makes an adverse employment decision based on a lower-level employee’s discriminatory recommendation.

In the fable, a cunning monkey persuades a cat by flattery to retrieve chestnuts from a fire. The cat singes its paws, and the monkey takes off with the chestnuts, leaving the cat with nothing.

The original cat’s paw

Ralph Shager was hired as a sales rep when he was 50 years old. He re­­ported to district manager John Lehnst. Lehnst actively recruited and hired a 29-year-old sales rep with no experience. He divided the territories between the two reps, giving the richest areas to the new hire while Shager got the poorest areas.

Despite the division, Shager ex­­ceeded his sales goals while the younger man failed to meet even modest goals. In the next semi-annual evaluation, Lehnst gave mar­­ginal ratings to both men, but ex­­cused the younger man’s poor performance because he lacked experience.

Lehnst placed Shager on probation, but then recommended his termination. When an internal committee did in fact fire him, Shager sued the company for age discrimination.

There was evidence that Shager’s deficiencies were exaggerated. There was also evidence of Lehnst’s animosity toward older workers. The court had to consider if Lehnst’s hostility to older workers could be imputed to the company.

Under common law, employers are liable for intentional wrongs (torts) of employees acting in furtherance of their employment. However, the Age Discrimination in Employment Act is completely silent on the issue.

The court reasoned that if Lehnst had fired Shager, the company would be liable regardless of whether the company was at fault. But he did not; a committee of executives did. If the reasons for the termination were not tainted by Lehnst’s prejudice, the causal link would be broken.

The court ultimately held that Lehnst’s influence was “decisive.” Judge Posner concluded “if the acted as a conduit of prejudice—his cat’s paw—the innocence of its members would not spare the company from liability.”

The theory in New Jersey

In 2008, the New Jersey Appellate Division embraced the theory of “subordinate bias” in Kwiatkowski v. Merrill Lynch (2008 WL 3875417, App. Div., 2008).

Darren Kwiatkowski, a gay man, was admittedly insubordinate to his supervisor, who recommended termination. When Kwiatkowski was fired, he sued, alleging that he was fired based on his sexual orientation.

Evidence showed that the super­visor was biased against Kwiatkowski because of his homosexuality. There was no evidence that high-level Merrill Lynch officials knew Kwiatk­owski was gay.

The court said where an employer “rubber stamps” a biased supervisor’s decisions, decision-makers can only escape liability by conducting an in­­de­pen­dent investigation before following the supervisor’s recommendation.

The U.S. Supreme Court’s view

This year, in Staub v. Proctor Hospital (131 U.S. Supreme Court, 1186, 2011), the U.S.  Supreme Court considered the cat’s paw theory.

Vincent Staub was a hospital angiography technician and a member of the U.S. Army Reserve. Both his immediate supervisor and her supervisor were hostile to Staub’s military obligations.

The immediate supervisor disciplined Staub by requiring him to re­port when his cases were completed. When he violated that directive, the hospital’s vice president of HR re­­viewed Staub’s personnel file and fired him.

Staub sued the hospital under the Uniformed Services Employment and Reemployment Rights Act, which forbids denying “employment, reemployment, retention in employment, promotion, or any benefit of employment” based on a person’s military membership or obligations.

Staub alleged that although the HR VP was not biased against military service, the two supervisors were, and that influenced HR’s actions. The Supreme Court agreed that the hospital was liable. It concluded that if the employer’s investigation blindly takes into account the supervisor’s recommendation, without independently determining if it was justified, the employer is liable.

Don’t get burned

Cat’s paw cases are proliferating. That makes it critical for employers to take additional, simple steps to shield them­selves from liability in discrimination and wrongful-termination cases:

  1. Thoroughly and independently investigate each adverse employment action recommendation.
  2. Approach each supervisor recommendation with an open mind.
  3. Keep all employees up-to-date on anti-discrimination and bias policies.
  4. Think twice before grabbing the “chestnut” and acting on a “monkey’s” recommendations.

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Danielle Wilson, a law clerk at Adams, Stern, Gutierrez & Lattiboudere (www.asgllaw.com) assisted in the preparation of this article.