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USERRA
The “Cat’s Paw” Theory of Employer Liability

Earlier today, the Supreme Court ruled that an employer can be held liable for employment discrimination under the “cat’s paw” theory of liability.  Specifically, in Staub v. Proctor Hospital (S.Ct., March 1, 2011), the Supreme Court addressed the issue of whether an employer may be held liable for employment discrimination based on the discriminatory animus of an employee who influenced, but did not make, an ultimate employment decision.

In Staub, the plaintiff sued his former employer alleging discrimination under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”).  The plaintiff argued that two of his supervisors – Mulally and Korenchuk – were hostile towards his military obligations.   The Plaintiff also alleged that Mulally gave him a disciplinary warning, which included a directive requiring the plaintiff to report to Mulally or Korenchuk when his cases were completed.  After receiving a report from Korenchuk that the plaintiff did not comply with the directive, the company’s Vice President of Human Resources decided to fire the plaintiff.

In his lawsuit, the plaintiff did not contend that the VP of Human Resources was motivated by hostility to his military obligations.  He did, however, contend that Mulally and Korenchuk’s actions were motivated by anti-military hostility, and that their actions led to his eventual termination.

In addressing this case under the “cat’s paw” theory of liability,  the Court noted that a violation of USERRA was a “tort.”  The Court then held that “if a supervisor performs an act motivated by anti-military 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” (italics in original.)  The Court also added that the employer would be liable  either when the supervisor acted within the scope of his employment, or when the supervisor acted outside the scope of his employment but liability can still be imputed to the employer under traditional agency principles.

Although this ruling is bad news for employers, the Court did provide some guidance on how an employer can avoid liability in cat’s paw cases.   Specifically, the Court explained that if the employer’s investigation results in an adverse employment action for reasons that are unrelated to the supervisor’s original biased action, then the employer will not be liable. Thus, applying principles of tort law, if there is an intervening and superceding cause for an employment action, the employer might be able to avoid liability for a supervisor’s earlier unlawful actions.

Finally, although this case dealt with an alleged violation of USERRA, the same principles of liability can be applied to all types of employment discrimination lawsuits.  As the  Court noted,  USERRA is “very similar to Title VII.”  Additionally, although the Court’s holding specifically referred to USERRA, the Court also framed the “cat’s paw” issue in the context of “employment discrimination based on . . . discriminatory animus.”

You can read a copy of the Court’s decision here.  An explanation of the term “cat’s paw” can be found here on Wikipedia:  “cat’s paw.”