Supreme Court Decides “Cat’s Paw” Case Brought Under USERRA

By Edwin S. Hopson

On March 1, 2011, the U.S. Supreme Court issued its decision in Staub v. Proctor Hospital, 562 U.S. ____, No. 09-400 (March 1, 2011).  While employed by Proctor Hospital, Vincent Staub was also in the U. S. Army Reserves. Staub’s immediate supervisor  and her boss were openly hostile to Stuab’s obligations as an Army Reservist. Staub received a corrective action from his supervisor and, after receiving a report that Staub had violated the corrective action, the hospital’s human resources manager fired Staub. Staub complained that his discharge was on account of his being a Reservist but the HR manager refused to change the decision. Staub filed suit against the hospital under the Uniformed Services Employment and Reemployment Rights Act (USERRA), claiming his discharge was on account of his status as an Army Reservist.  Specifically, Staub claimed that his membership in the U.S. Army Reserves was a motivating factor in his discharge and that the supervisors were motivated by hostility to his military obligations and they influenced the HR manager to take the adverse action.  A jury found for Staub and awarded damages against the hospital.  However, the U.S. Court of Appeals for the Seventh Circuit reversed, holding that the hospital was entitled to judgment as a matter of law because the HR manager had relied on more than the supervisors’ recommendation in making the decision to discharge Staub.  Applying the so-called “cat’s paw” theory first espoused by Judge Posner in 1990, the Seventh Circuit reasoned that it was enough that the decision maker was not wholly dependent on a single source of information and had conducted her own investigation into the facts surrounding the events leading to Staub’s discharge.

 The High Court reversed the Seventh Circuit in an opinion by Justice Scalia, joined in by all but Justice Kagan who took no part in the case, and held:

 “… 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. Slip Opinion, page 10 (footnotes omitted).”

 In construing USERRA’s phrase “motivating factor in the employer’s action,” Justice Scalia opined that when Congress passed USERRA it was creating a federal tort and, therefore, it was appropriate for the Court to analyze the issue against the background of general tort law, citing Burlington N. & S. F. R. Co. v. United States, 556 U. S. ___ (2009) (Slip Opinion, pages 13–14); Safeco Ins. Co. of America v. Burr, 551 U. S. 47, 68–69 (2007); Burlington Industries, Inc. v. Ellerth, 524 U. S. 742, 764 (1998).  Applying tort principles, the Court noted that intentional torts “generally require that the actor intend ‘the consequences’ of an act,’ not simply ‘the act itself.’ ” Kawaauhau v. Geiger, 523 U. S. 57, 61–62 (Slip Opinion, page 5).  Thus, Justice Scalia wrote that the scienter required for USERRA liability exists so long as the earlier agent intended, for discriminatory reasons, that the adverse action take place. Additionally, he noted that the decision maker’s exercise of judgment does not prevent the earlier agent’s action from being the proximate cause of the harm, nor be deemed a superseding cause of harm, citing Hemi Group, LLC v. City of New York, 559 U. S. 1 (2010) and Exxon Co., U. S. A. v. Sofec, Inc., 517 U. S. 830, 837 (1996) (Slip Opinion, pages 7 and 8). 

 Rejecting the hospital’s contentions, the Court stated that the hospitals’ approach would have the improbable consequence that should an employer isolate its decision-making HR manager from its supervisory staff, then the employer would effectively be shielded from discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse employment actions.

 Applying its holding to Staub’s case, Justice Scalia stated that Staub’s supervisors had both acted within the scope of their employment when they caused Staub’s discharge by the HR manager. He also noted that there was sufficient evidence for the jury to have believed that the supervisors’ actions towards Staub were motivated by hostility toward Staub’s Army Reserve obligations, and that those adverse actions taken by the supervisors were intended to cause his discharge and were causal factors underlying the HR manager’s decision.

 The Court left open the question of whether the jury was properly charged in light of the Court’s holding and remanded the case to the Seventh Circuit to consider whether to reinstate the jury verdict or remand for new trial.

 Justice Alito wrote a concurring opinion that was joined in by Justice Thomas, in which he agreed with the result but criticized Justice Scalia for basing his analysis upon tort law rather than a more traditional statutory language approach.

 The Court’s decision, although issued in the context of a USERRA claim, would appear to have application to other employment discrimination statutes.  For instance, Justice Scalia noted:

 “The statute [USERRA] is very similar to Title VII, which prohibits employment discrimination ‘because of . . . race, color, religion, sex, or national origin’ and states that such discrimination is established when one of those factors ‘was a motivating factor for any employment practice, even though other factors also motivated the practice.’” 42 U.S.C. §§2000e–2(a), (m) (Slip Opinion, page 5).