Argument preview: Examining “the cat’s paw”

By Lyle Denniston
on Oct 29, 2010 at 8:54 pm

Disclosure: Akin Gump represents the petitioner in Staub v. Proctor Hospital, but the author of this post is not involved in the case.

For years, federal courts have split over a key issue in employment law — when is an employer legally to blame under a “cat’s paw theory” — and the Supreme Court has agreed to decide the issue. But so far, the test cases have ended before the Court could rule. Now, it is trying again in a case involving a fired hospital employee in Illinois.  The outcome could have an impact on a variety of federal laws against discrimination in the workplace.

The new case — Staub v. Proctor Hospital (09-400) — will be heard in a one-hour session at 1 p.m. next Tuesday.  Arguing for the employee, Vincent E. Staub, will be Eric Schnapper, a law professor at the University of Washington in Seattle, sharing 10 minutes of his time with a federal government lawyer, Eric D. Miller, an assistant to the U.S. Solicitor General.  Representing the hospital employer will be Roy G. Davis of Davis & Campbell in Peoria, Ill.  The case will be heard by an eight-member Court — without Justice Elena Kagan who, in her former role as Solicitor General, filed a brief in the case at the invitation of the Court.

Background

Vincent Staub’s problems, leading to his firing as an employee of the Proctor Hospital in Peoria, go back to the year 2000, but the theory at issue in his case goes by an informal label with origins in the 17th Century and a French poet, Jean de la Fontaine.  He wrote a  fable titled “The Money and the Cat.”  It was a story about a monkey who persuaded an unsuspecting cat to snatch chestnuts out of a fire.  The cat did as asked, but burned her paw, while the monkey gained from her effort: he ate the chestnuts without getting burned himself.  The cat, in short, was duped by the monkey’s devious purpose, and thus became his agent.

As applied to friction arising in the workplace of today, the fable in theory would translate this way: the “monkey” is a company employee who is out to “get” another worker and wants that employee fired or disciplined, but does not take that action personally; rather, he or she induces someone else in the company who is not biased — the unwitting “cat” — to terminate or punish the targeted worker.  If la Fontaine’s fable is applied literally to job bias, the employer would be liable only if the “monkey” had such influence over the “cat” that the action of the  “cat” cannot be considered innocent of the bias, so the employer is liable.

Employers insist that federal laws against discrimination in the workplace make the employer liable only for the actions of an employee or supervisor who takes a discriminatory action — that is, only where there is a direct link between the hostile attitude and the resulting action, otherwise the action is independent of the “animus” toward the affected worker.  Employees,  however, counter  that the law allows the employer to be held to blame for the bias of the “monkey” even if the “cat” that acted was totally unaware of that animus; it is enough, workers’ advocates contend, that the “monkey” played some role in the decision-making process.

In the Staub case, the federal anti-discrimination law at issue is the Uniformed Services Employment and Reemployment Rights Act of 1984.  That law was designed to assure that workers who serve in the military — in the reserves while continuing to work, or on active-duty and then seek to return to work — will not be discriminated against because of that service.  A worker can sue for money damages and for reinstatement or other court-ordered remedies by showing that the fact of military service was a “motivating factor” for being fired, disciplined, or not rehired.  If a worker can show that, the employer can defend itself by proving that the firing, discipline or other reaction would have been taken anyway, even if that worker had not been in the military.

If the “cat’s paw” theory were to be applied by the Supreme Court in this case, easing employers’ liability, however, that theory would also apply in cases brought under a wide variety of other federal workplace rights laws: Title VII (against bias on the job based on race,  sex, or religion), the Family and Medical Leave Act, the Age Discrimination in Employment Act, the Pregnancy Discrimination Act, the Americans with Disabilities Act, some older civil rights laws, and perhaps even the Constitution if the employer were a government agency.

Vincent Staub, of Peoria, had worked for 14 years in civilian life as a radiology technician at Proctor Hospital.  Since 1984, he had been in the Army Reserves, and had to leave work from time to time for reserve training or, on one occasion, to go on active duty to train Army troops bound for Iraq on how to set up a radiology unit in a combat zone field hospital.  (He retired from the reserves in 2009, but remains subject to active duty recall.)

One of his supervisors, Janice Mulally, was openly hostile to Staub’s military obligations, apparently because it complicated work schedules and because, she felt, it imposed on other employees’ job rights.  She allegedly put him on schedules that interfered with his military duties. The head of Staub’s department, Michael Korenchuk, also was critical.   A co-worker of Staub’s, Angie Day, complained one day to Korenchuk and the hospital’s vice president for human relations, Linda Buck, that Staub had mistreated her and had been lax in his duties in the department. Buck was told by hospital officials to work out a plan to deal with Staub’s situation.  She did not do that; rather, she soon made up her mind to fire him.

The precipitating incident came in April 2004, when colleagues could not find Staub; he had been instructed a few months earlier not to leave the department without permission.  He and a colleague had gone only to the hospital cafeteria, leaving a voice-mail message where they would be.  When he returned to the department, he was summoned to Buck’s office, and was told on the spot that he was fired for failing to keep his colleagues aware of his whereabouts.  He was promptly escorted out of the hospital.

Staub sued the hospital under the military servicemembers’ job protection law, essentially arguing that Buck, although not personally biased about his military duties, had ordered him fired based on the hostility to those duties of Staub’s direct supervisors, Mulally and Korenchuk.  A jury found that Staub’s job rights had been violated, and awarded him $57,740 in damages.  The jury concluded that Staub’s military status had been a “motivating factor” in his firing, and that he would not otherwise have been fired.

The Seventh Circuit Court, applying one of its own precedents, ruled that Proctor Hospital could not be held legally to blame for the violation of Staub’s military service rights unless Buck had been almost totally under the influence of the hostility of Mulally and Korenchuk.  There was no proof that she blindly relied upon them for her decision, the Circuit Court ruled; she was not, that Court commented, the “cat’s paw” for Mulally and Korenchuk, because she did not blindly rely upon their bias to the military duties.  She had other sources of information, it found.

Petition for Certiorari

Staub’s lawyers took the case on to the Supreme Court on July 22 of last year.  (Because he is a veteran, the Court allowed him to go forward without paying Court fees and without having his petition in the usual form of a printed booklet.)  The case raised a single question: “In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?”

After reciting the facts and the lower court rulings, Staub’s counsel began the plea for Court review by quoting an opinion Justice Samuel A. Alito, Jr., had written in the Term before, noting that the lower courts disagreed on the issue at stake, and describing that question as an important one.  Bolstering the chances of gaining review, the petition noted that all 12 of the regular federal appeals courts had repeatedly addressed the issue, and that the Supreme Court itself had granted review of the issue in 2007, but that case washed out before the Court could hear it. (That case was BCI Coca-Cola Bottling v. Equal Employment Opportunity Commission, 06-341.  Meanwhile, in lower courts, Staub’s case had been put on hold pending the Justices’ action in the Coca-Cola Bottling case.)

After Staub petitioned the Supreme Court, the hospital’s counsel in reply did not dispute that the lower courts were divided on the “cat’s paw” issue, but argued that Staub’s case was not a proper one for the Court to use in addressing that issue.  Even if a court were to use a standard other than the one the Seventh Circuit did, the opposition brief asserted, the outcome in Staub’s case would be the same, because Linda Buck made an independent investigation that “broke any causal link” between the anti-military views attributed to staff members and Staub’s firing.   The lower courts, the hospital said, agree that an independent decision by the one making the final decision cuts any link to others’ alleged bias.

The opposition brief also suggested that the facts were not as simple as Staub’s petition had made them out to be, and that Staub was trying to raise issues not put before the lower courts since his counsel had not, until filing the petition, questioned the Seventh Circuit’s legal standard for such cases.

The Court was not prepared to act on the petition until it got the views of the federal government on whether to take this case as one presenting the “cat’s paw” issue in a reviewable way.  Responding, the Solicitor General urged review, saying the Seventh Circuit was wrong in applying its view of the “cat’s paw theory” — that is, its conclusion that Linda Buck was not the “cat’s paw” of the anti-military supervisors of the hospital radiology staff.   Then-Solicitor Kagan noted that this approach to the issue conflicted with decisions of all but one of the other 11 appeals courts.

The Court granted review on April 19.

Merits Briefs

Staub’s merits brief, filed July 2, is a muted attack on the “cat’s paw” theory as it was applied literally by the Seventh Circuit, preferring to put most of its emphasis on traditional principles of “agency” — that is, the long-standing notion that principles or employers share the liability of actions of their agents when those agents are acting in the scope of their jobs. The brief then suggests that the “cat’s paw” theory departs from agency principles, thus leading the Circuit Court to fail to perceive that the two hospital supervisors who were hostile to Staub’s military status were, in fact, the hospital’s agents.

“Personnel decisions at most employers,” the brief asserted, “are frequently the result of a chain of decisionmaking, in which a series of officials, each playing distinct roles, make separate decisions and take different actions.  So long as a biased official in so doing acts as an agent of the employer, the employer is liable for injuries caused by the official’s conduct.  It makes no difference whether or not the discriminatory official is the last or ‘ultimate’ decisionmaker.”

Congress, the brief went on, ordinarily applies traditional agency principles unless it has expressly opted not to do so.  It did not do so in passing the military servicemembers job rights law, Staub contended.  If that law is applied as the Circuit Court did, according to the brief, it would encourage employers to evade the non-discriminatory commands of the law “simply by assigning final decisions to human resources officials with little personal knowledge of the relevant facts.”

Finally, the Staub brief argued that the Court should not endorse the Seventh Circuit’s view that, if the final decisionmaker makes some investigation of her own before taking a final action, that is a sufficient defense and gets the employer “off the hook” for the bias that others along the chain of decisionmaking had harbored.   Moreover, it argued, that defense cannot be squared with the specific job rights law at issue here.

Lining up with Staub, the federal government’s merits brief also relied heavily upon agency principles, although it sought to apply them more closely to the mandates of the military job rights law.  That brief noted that the law specifically defines “employer” to include anyone “to whom the employer has delegated the performance of employment-related responsibilities.”  One such responsibility, it noted, is monitoring an employee and reporting on performance — an allusion to the duties of the two radiology supervisors at Proctor Hospital who were hostile to Staub’s military obligations.

It undermines Congress’s purposes in passing this law, the government brief asserted, to “allow employers to escape liability even in cases where a supervisor’s discrimination is a substantial cause of the adverse employment decision.”  That, it suggested, is what the blind reliance approach of the Circuit Court would tolerate.

The hospital appeared largely content, in its merits brief filed August 31, to try to keep the Court focused on the facts of this particular case.  Early on, for example, it said: “There are two basic facts in this case which are undisputed.  First, Linda K. Buck made the decision to discharge Staub. Second, Buck harbored no military animus toward Staub.”  It was clearly an opening attempt to make the legal point — only the final decisionmaker’s actions count legally — through a simple factual recitation.

And, as the brief moved on, it made considerable effort to weaken the link between any anti-military bias among staff supervisors and Buck’s ultimate decision. The brief, in fact, energetically sought to diminish the role of Staub’s immediate supervisor, Janice Mulally, and the department head, Michael Korenchuk, in any of the background developments preceding Buck’s decision to fire him.  The evidence of their roles was either very thin or significantly dated, the opposition merits brief suggested.  “There is an absolute dearth of evidence” to link any animus to Buck’s decision, it summed up.

When the brief addressed straightaway a legal argument, it suggested that the way the military servicemembers’ job rights law is fashioned, the Seventh Circuit’s “cat’s paw” theory makes sense.  The law not only makes the actual decisionmaker personally liable, it makes the employer liable in turn for that decision, the brief noted.  If there is no hint of anti-military bias in the decisionmaker (as it noted there is not here), then there can be no liability under the law for the hospital, it asserted.

The brief also reiterated the point that any suggestion that Staub’s firing was the product of anti-military bias would fail, once it was known that Linda Buck had made an independent probe before she made her firing decision.  “She was fully informed” when she came to that conclusion, the brief said. “She was not the dupe, the pawn, the ultimate rubber-stamper….To hold Proctor liable in such a situation would be contrary to law and informed human resources practices.”

There is a fair balance between the amicus briefs supporting the opposing sides, and the array of groups on each side is about as expected: labor groups and civil rights groups making the broader arguments against the “cat’s paw”  theory on Staub’s side, military sources supporting the more generous reading of the servicemembers’ law at issue to assist Staub, business groups and employment policy advocates endorsing, on the hospital’s side, a tight link between final personnel decisions and bias before there can be employer liability.

The one out-of-the ordinary amicus brief is by the National School Boards Association, warning the Court of “the strong possibility of unintended consequences” for the nation’s school districts.  Under many state laws, it noted, school boards are the final decision-makers in carrying out obligations under anti-discrimination laws, but they generally are not involved in the day-to-day operation and do not make their own investigations before taking final action.   Thus, depending upon how the Court interpreted the Seventh Circuit’s view of an independent investigation’s capacity to absolve an employer of liability for some staff members’ bias, school boards could find themselves being held liable without doing such probes themselves, it suggested.  The brief proposed that, instead, the Court endorse a “reasonable care” approach for public employers governed by legal requirements for making personnel decisions.

Analysis

There is no doubt that the Court is deeply interested in the “cat’s paw”  theory and its implications, but that does not necessarily mean that it has any particular leanings on the subject after examining it — more than superficially — several times in recent years.  Because the potential impact could sweep so broadly across federal workplace discrimination laws, the Court no doubt would prefer to speak more broadly in its decision, and not confine it to the specific implications for the one law before it: the Uniformed Services Employment and Reemployment Rights Act.

That law is quite close in its language to the most often litigated job rights law — Title VII of the civil rights act.   Whatever the Court ultimately chooses to decide clearly will affect Title VII’s application, as well as that of other federal workplace bias laws.

For the same reasons, the Court may not be particularly attracted to decide this case — as the hospital seems to prefer — on a reading of the peculiar facts of this litigation.  The facts in all employment law cases vary, and if one has difficulty writing more broadly on the meaning of a given law in this field, perhaps the discrete facts might take on more importance.  But the view one takes of the facts here seems to depend, in the first instance, upon conclusions about what the law declares as legal principle.

Each side’s view of the core legal principle at stake is quite simple.   Staub wants the Court to see employment law as embracing a chain of decision-making with the employer legally responsible for what occurs at each link. That would have the Court scuttle the “cat’s paw”  theory almost entirely, because, Staub suggests, it goes against conventional agency principles.  The hospital, for its part, wants the Court to see the law as focused solely on the final decision-maker, and the “cat’s paw” theory when literally applied would (apparently with the exception of demonstrated bias by the final decision-maker) free the employer of liability.   Thus, the choice before the Court is a fairly stark one.

And, it is not a choice that likely would be assisted significantly by trying to parse the language only of the military servicemembers’ job rights law.  The case, in other words, may require the Court to engage rather boldly in declaring fundamental legal policy.

.