Justices Reinstate 'Cat's Paw' Bias Claim Under USERRA

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An Army reservist fired from his civilian job as a hospital technician has a discrimination claim under the Uniformed Services Employment and Reemployment Rights Act based on evidence that two allegedly biased immediate supervisors' reports influenced the termination decision, a unanimous U.S. Supreme Court ruled March 1 (Staub v. Proctor Hosp., U.S., No. 09-400, 3/1/11).

Applying traditional tort and agency law principles to USERRA, which makes employers liable if an individual's military service is “a motivating factor” in an adverse employment action, the court said an employer may be liable if a biased supervisor's discriminatory intent was a “proximate cause” of the plaintiff's termination, even if an unbiased employer representative made the ultimate decision to fire him.

Vincent Staub, an Army Reserve member fired by Proctor Hospital in Peoria, Ill., in 2004, has a USERRA claim based on a “cat's paw” theory of liability because he presented evidence that his two immediate supervisors expressed anti-military bias and that they contributed to an unbiased human resources manager's decision to fire Staub, the court decided.

It reversed a U.S. Court of Appeals for the Seventh Circuit ruling for the hospital that said Staub had to prove the immediate supervisors had a “singular influence” on the unbiased decisionmaker in order to pursue a cat's paw case under USERRA and that he had failed to do so ( 560 F.3d 647, 186 LRRM 2001 (7th Cir., 2009); 27 HRR 327, 3/30/09).

“We therefore hold 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,” Justice Antonin Scalia wrote for six members of the court.

In a concurring opinion joined by Justice Clarence Thomas, Justice Samuel Alito said he agrees with the court's decision based on USERRA's text rather than on tort and agency law principles. Alito said he would hold that an employer is not liable when the unbiased official who makes the termination decision conducts “a reasonable investigation” and does not just “rubberstamp” the allegedly biased supervisors' findings. Since Staub's evidence indicated that the decisionmaker took the biased supervisors' statements at face value, Alito said he concurs in reinstating Staub's USERRA claim.

Justice Elena Kagan recused herself from the case.

A 'Fairly Reasoned Approach.'

Michael Foreman, a professor at Pennsylvania State University's Dickinson School of Law in University Park, Pa., called the decision a “fairly reasoned approach” to a “difficult” issue that “has been floating around for some time.”

Four years ago, the justices granted review of a cat's paw case under Title VII of the 1964 Civil Rights Act in BCI Coca Cola Bottling Co. of Los Angeles v. EEOC, but the parties withdrew that case before oral argument and ultimately settled (25 HRR 399, 4/16/07; 26 HRR 427, 4/21/08). Foreman noted that Alito also discussed the cat's paw theory in the Title VII context in his concurring opinion in Ricci v. DeStefano ( 129 S. Ct. 2658, 106 FEP Cases 929 (2009); 27 HRR 705, 7/6/09).

The court now has “answered some of the broad issues” raised by the cat's paw theory of liability and the court's “underlying theory should apply” in cases brought under Title VII as well as USERRA, Foreman said. By explicitly noting the similarities between USERRA and Title VII, the court probably was signaling that its announced principles extend beyond USERRA claims, he added.

But Foreman also said textual differences exist between USERRA and Title VII, as well as with other federal anti-discrimination laws, that courts will have to address in cases arising under those other statutes.

Employers are “generally disappointed” by the ruling, said Elizabeth Milito, executive senior counsel for the National Federation of Independent Business's Small Business Legal Center in Washington, D.C. Businesses are concerned that “allowing this kind of transferring of intent” will “make it easier” for employees to sue alleging discrimination, Milito told BNA March 1.

“There should be a way for the employer to negate or void” a lower-level supervisor's alleged bias if an unbiased decisionmaker renders “an independent judgment” based on a process distinct from the alleged bias, Milito said.

She added that the Staub decision, combined with other recent Supreme Court rulings favoring employees, means that employer defenses are “diminishing” and that the court is making it more difficult for employers to “prove their innocence.” Milito said although she thinks the opinion is “pretty narrowly focused” on USERRA, employees will “definitely cite” the decision to support claims under Title VII and other anti-discrimination laws.

Jury Verdict Overturned.

In January 2004, after Staub told his supervisors he might be recalled to active duty in Iraq, supervisor Janice Mulally issued Staub a “corrective action” about alleged absences from his work area. On April 20, 2004, Staub left the work area for a short break after unsuccessfully trying to locate supervisor Michael Korenchuk. Staub left a telephone message for Korenchuk explaining his whereabouts but when Staub returned, Korenchuk took him to HR vice president Linda Buck, who fired Staub based on the supervisors' reports, complaints from a co-worker about Staub, and her review of Staub's personnel file. Staub filed a grievance, but Buck reaffirmed her termination decision.

All parties agreed that Buck had no anti-military animus, but Staub alleged that his immediate supervisors' discriminatory motives should be imputed to the hospital. A federal district court jury ruled for Staub, awarding him about $57,000 in damages.

But the Seventh Circuit reversed, ruling that the trial judge never should have permitted the jury to hear evidence regarding the alleged bias of supervisors who did not make the decision to fire Staub. The appeals court held that in a USERRA case resting on a cat's paw theory, a federal trial judge must make a threshold determination that the biased supervisor exerted a “singular influence” on the nonbiased decisionmaker before allowing a jury to hear evidence of alleged bias by nondecisionmakers.

Staub petitioned for Supreme Court review, and after the Justice Department recommended taking the case, the court granted his petition (28 HRR 428, 4/26/10). The justices heard oral argument Nov. 2, with the solicitor general participating as an amicus for Staub (28 HRR 1181, 11/8/10).

In reversing the Seventh Circuit, the Supreme Court observed that USERRA is “very similar to Title VII” in that both declare “discrimination is established” when an individual's protected characteristic is “a motivating factor” for the adverse employment decision.

“Proximate cause requires only 'some direct relation between the injury asserted and the injurious conduct alleged,' and excludes only those 'link[s] that are too remote, purely contingent, or indirect,' ” Scalia wrote. “We do not think that the ultimate decisionmaker's exercise of judgment automatically renders the link to the supervisor's bias 'remote' or 'purely contingent.' ”

Reserve Association Pleased.

Samuel Wright, executive director of the Service Members Legal Center at the Reserve Officers Association in Washington, D.C., said his group is “very pleased” with the court's decision. Since Sept. 11, 2001, Wright said, more than 800,000 “mobilizations” of military reservists and National Guard members have occurred and such individuals often are deployed for months at a time. That means employers have a greater temptation not to hire or to get rid of workers who have military reserve or Guard obligations, Wright told BNA March 1.

Attorney Julie Galassi of Hasselberg, Rock, Bell & Kuppler in Peoria, Ill., who represents Staub, said she is elated by the court's decision. Although the Seventh Circuit on remand still could decide a new trial is required, Galassi said, under the Supreme Court's new standards, she is confident that the appeals court will affirm the jury verdict in Staub's favor.

In a March 1 statement, Proctor Hospital said that although it could not discuss the details of Staub's case, it was “confident [its] employment decision was appropriate and unrelated to Mr. Staub's service in the Army Reserve.”

“We are proud of our long-standing history of supporting the Armed Forces,” the hospital said.

By Kevin P. McGowan


Text of the decision can be accessed at http://op.bna.com/dlrcases.nsf/r?Open=kmgn-8ejldq.