Employment Discrimination

Bond, Schoeneck & King Publishes 2012 Study of Employment Discrimination Litigation in the Northern and Western Districts of New York

February 19, 2013

By John Gaal

Bond recently published its 2012 Study of Employment Discrimination Litigation in the Northern and Western Districts of New York.  Bond’s first Study on Employment Discrimination Litigation was issued in 2001, with a follow up Study issued in 2007.  This latest Study reviews Northern and Western District cases for the January 1, 2007 through December 31, 2011 period, and then compares those findings with the 1991 through 2000 data in its original Study, as well as with data for 2001 through 2011, and cumulative data for the 1991 through 2011 period.

This latest Study shows that in the Northern and Western Districts defendants continued to prevail most of the time in cases that went to trial before a jury (more than 57% of the time in the 2007 through 2011 period, showing a slight decline over other periods).  Defendants prevailed by a much greater percentage in cases tried before a judge (87.5% of the time in the 2007 through 2011 period).  Fewer cases actually made it to trial and, perhaps not surprisingly given the preceding numbers, of those that did go to trial, far fewer cases were tried before a judge.  While the percentage of cases that settled declined a bit in the 2007 though 2011 period, the percentage of cases disposed of by substantive motion actually increased.

In the 21 jury trials that were tried to verdict in the Northern and Western Districts during the 2007 through 2011 time period, plaintiffs prevailed nine times with an average jury award of just under $295,000.

Based upon the manner in which the federal courts track cases, and in a change from prior periods studied, among the categories of age, disability, race and sex, race claims were the most common claims in litigation during the latest 2007 through 2011 period (followed by disability claims which have been growing in number over the years).  In prior years, sex-based claims held that top spot.  The most significant increase in claims asserted was the general category of “employment discrimination,” which includes retaliation claims.  Somewhat surprisingly, age claims were on the decline.  By comparison, race claims, followed by sex claims, were the most common claims filed by EEOC and New York Division of Human Rights complainants for the 2008/09 and 2009/10 periods (the latest periods for which statistics were available).

As has been the case for all periods studied, Bond represented more defendants in employment discrimination litigation in the Northern and Western Districts of New York than any other law firm, and in the 2001 through 2011 period, it appeared in almost twice as many cases as the next most frequent defense law firm.

Finally, the Study reveals that the length of time it took for a case to go from filing to verdict after trial increased, and significantly.  In the Northern and Western Districts combined, a jury trial took an average of just over four years to conclude during the 2007 through 2011 period, compared to 2.2 years during the 1997 through 2000 period.  Bench trials took even longer, at more than six and one-half years for the 2007 through 2011 period, compared to just under two years for the 1997 through 2000 period.  Of course, given the relatively small number of bench trials in particular, a lengthy delay in just one or two cases can skew these numbers.

To obtain a complete copy of the Study, click here.

EEOC Unveils 2013-2016 Enforcement Priorities

January 2, 2013

On December 18, 2012, the Equal Employment Opportunity Commission ("EEOC") announced the approval of its 2013-2016 Strategic Enforcement Plan.  The Plan’s purpose is to “focus and coordinate the EEOC’s programs to have a sustainable impact in reducing and deterring discriminatory practices in the workplace.”  The Plan sets forth six agency priorities:

  • Eliminating Barriers in Recruiting and Hiring.  The EEOC will target discriminatory policies and practices that still exist at the hiring stage, such as exclusionary policies and procedures, the practice of steering individuals into certain jobs based on their status in a particular group, and the use of certain screening tools (pre-employment tests, background checks, and date-of-birth inquiries).
  • Protecting Immigrant, Migrant, and Other Vulnerable Workers.  This priority will focus on practices that affect groups of vulnerable workers who are often unaware of their rights, or reluctant to exercise them.  The Plan specifically identifies disparate pay, job segregation, harassment, and trafficking practices as issues faced by this population of workers.
  • Addressing Emerging and Developing Issues.  The Plan identifies several priority issues under this heading, including coverage and reasonable accommodation under the Americans with Disabilities Act ("ADA"), accommodating pregnancy-related limitations under the ADA, and coverage of lesbian, gay, bisexual, and transgender individuals under Title VII.
  • Enforcing Equal Pay Laws.  The EEOC will focus on compensation systems that discriminate based on gender.
  • Preserving Access to the Legal System.  This priority includes policies and practices that discourage or prohibit individuals from exercising their rights under the law, or impede the EEOC’s enforcement efforts, such as retaliatory actions, overly broad waivers, settlement provisions that prohibit filing charges or providing information to the EEOC, and failure to retain records required by EEOC regulations.
  • Preventing Harassment Through Systemic Enforcement and Targeted Outreach.  The EEOC identifies harassment as one of the most common workplace complaints, and will continue to focus its efforts in this area.

The Plan reflects a targeted approach that will place a greater share of the EEOC’s resources on these six priority areas.  Charges that fall within these six areas will be given priority attention.

One key theme that can be discerned from this Plan is the EEOC’s strong interest in cases that could potentially affect more than just the charging party.  The EEOC intends to take the greatest investigative interest in charges that reference or otherwise involve employment policies or practices with potential class-wide impact -- even if the charging party does not specifically allege that more than one employee has been affected.  In assessing the risk or exposure associated with any given EEOC charge, employers must consider the possibility that the EEOC will broaden its investigation beyond the particular employee who filed the charge.  The EEOC's Plan serves as another reminder that employers should periodically evaluate whether their standard employment policies and practices might unintentionally have a discriminatory impact on any protected group, or might otherwise need to be improved or amended.

EEOC Issues Guidance Regarding Application of Title VII and ADA to Victims of Domestic Violence, Sexual Assault, or Stalking

November 21, 2012

Guidance from the U.S. Equal Employment Opportunity Commission, issued on October 12, 2012, cautions employers that federal employment discrimination laws such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act may apply in certain situations involving applicants or employees who experience domestic or dating violence, sexual assault, or stalking.  This guidance, which is provided in a Q&A format, contains examples of such employment situations.

As employers are aware, Title VII prohibits employment discrimination based on race, color, sex, religion, or national origin, and the ADA prohibits employment discrimination based on disability.  These laws do not specifically protect individuals who experience domestic or dating violence, sexual assault, or stalking.  In its guidance, the EEOC recognized this, but cautioned that "potential employment discrimination and retaliation against these individuals may be overlooked.”

In the Q&A, the EEOC addresses three protections under Title VII which may be implicated in a situation that may involve domestic or dating violence, sexual assault, or stalking:  (1) disparate treatment based on sex (including treatment based on sex-based stereotypes); (2) sexual or sex-based harassment; and (3) retaliation for engaging in protected activity.  The guidance provides several illustrations of employment decisions that may violate Title VII, including:  an employer terminating an employee who was subjected to domestic violence because the employer fears the “drama battered women bring to the workplace”; and an employer declining to hire a male applicant after learning he had obtained a restraining order against his male domestic partner because the employer believes that men should be able to protect themselves.

The EEOC also addresses a number of protections under the ADA, including the prohibition against different treatment or harassment at work based on an actual or perceived impairment that may result from domestic or dating violence, sexual assault, or stalking.  As an example, the EEOC guidance provides that an employer who refuses to hire an applicant after finding out she received counseling for depression due to a sexual assault might be found to be in violation of the ADA.  The EEOC guidance also reminds employers that reasonable accommodations must be made for any disabilities that result from domestic or dating violence, sexual assault, or stalking.

The EEOC guidance does not change the existing protected categories or prohibitions under Title VII or the ADA.  Instead, the EEOC guidance provides employers with a reminder that those laws may be implicated in situations where an employee or applicant is a victim of domestic or dating violence, sexual assault, or stalking.  Employers in New York should also be aware that the New York Human Rights Law was amended in 2009 to include a specific prohibition against discrimination based on domestic violence victim status.

What the EEOC's Strategic Plan Means for Employers

March 8, 2012

By Laura H. Harshbarger

On February 22, 2012, the Equal Employment Opportunity Commission ("EEOC") released its Strategic Plan for 2012-2016.  The EEOC listed as a top priority increasing the number of systemic discrimination lawsuits against employers.  Systemic cases allege a pattern or practice of discrimination or class discrimination.  The basis of a systemic case is that the alleged discrimination affects a group of individuals rather than one particular individual.  Merely by way of example, a systemic case may involve such allegations as a preference for younger workers in the hiring process, a sick time policy which results in the failure to accommodate individuals with disabilities, or a glass ceiling preventing the advancement of women within the organization.

In its Strategic Plan, the EEOC announced that it will devote more of its resources to finding and prosecuting systemic discrimination cases.  Apparently, the EEOC intends to maximize the bang for its litigation buck.  By suing employers in cases involving a large number of affected employees, the EEOC will be poised to extract larger monetary awards against employers.  In each of the four years of the Strategic Plan, the EEOC states that systemic cases will be an increasing percentage of its litigation docket.

Employers need to be aware of the EEOC's focus on systemic discrimination.  With this internal push to sue systemic discrimination cases, the EEOC almost certainly will seek to expand otherwise routine, single-complainant investigations in the hope of discovering facts to support systemic allegations.  This is especially so if the discrimination charge involves a company rule or policy which arguably impacts many employees and not only the complaining party.  As a proactive measure, a prudent employer should review its policies and practices to ensure compliance with EEOC guidelines and regulations, and to reduce the risk of a systemic discrimination lawsuit.

Recent OFCCP and EEOC Enforcement Actions Suggest an Increased Focus on Alleged Discriminatory Hiring Practices

December 2, 2011

Recent complaints filed by the Office of Federal Contract Compliance Programs ("OFCCP") and the Equal Employment Opportunity Commission ("EEOC") against employers suggest that those federal agencies are aggressively pursuing allegations of discriminatory hiring practices.

On November 29, the OFCCP filed an administrative complaint against Cargill Meat Solutions, a federal contractor, alleging that the company violated Executive Order 11246, by favoring Asian and Pacific Islander applicants over applicants of other races and by favoring male applicants over female applicants.  In the complaint, the OFCCP alleges that over 4,000 qualified applicants were unlawfully rejected based only on their race or sex.  Significantly, the OFCCP seeks cancellation of the company's government contracts worth more than $550 million.

In the last several months, the EEOC has also filed two high-profile lawsuits against employers for alleged discriminatory hiring practices.  In September, the EEOC filed a lawsuit against Bass Pro Shops in the U.S. District Court, District of Massachusetts, alleging that the company engaged in a pattern or practice of failing to hire African-American and Hispanic applicants.  In the lawsuit, the EEOC alleges that managers made overt racist comments acknowledging the company's discriminatory hiring practices, and stated that African-American applicants did not fit their corporate profile.

In October, the EEOC filed a lawsuit against Texas Roadhouse in the U.S. District Court, Southern District of Texas, alleging that the company systematically failed to hire individuals over 40 years of age for "front of the house" positions.  In the lawsuit, the EEOC alleges that only 1.9% of the "front of the house" employees are over 40 years of age (which the EEOC believes is a statistically significant disparity when compared to the general population, industry statistics, and the applicant pool) and that the company instructed managers to hire younger employees by emphasizing youth in its hiring training.

At this point, these enforcement actions by the OFCCP and EEOC have not resulted in any final determinations or judgments.  Nevertheless, these enforcement actions serve as a useful reminder for employers of all sizes to continually monitor their hiring practices and periodically train managers who have hiring responsibilities to ensure compliance with federal, state, and local laws.

American Jobs Act Proposes Ban on Employer Refusals to Hire the Unemployed

October 7, 2011

If enacted, President Obama’s proposed American Jobs Act would ban employers with 15 or more employees from discriminating against the unemployed by making it illegal to categorically exclude applicants who are out of work. The impetus for this provision appears to be an increase in job advertisements that explicitly exclude the jobless, using statements such as “must be currently employed.” The bill would not only ban these types of advertisements, but also enable applicants who believe they were not hired because they are unemployed to sue the prospective employer.

The proposed legislation has caused debate over whether it makes sense to exclude an applicant solely because he or she is unemployed given the current economic environment. When U.S. unemployment rates were low, particularly in the late 1990’s, an applicant’s long stint of unemployment was usually a red flag. The assumption was that an individual who could not find and maintain employment when employment was plentiful must have undesirable qualities. In current economic conditions that assumption may be invalid because many qualified applicants are out of work for extended periods through no fault of their own.

Earlier this year, the Equal Employment Opportunity Commission weighed in on the issue, which it described as an “emerging practice,” by holding public hearings on the practice of employers excluding unemployed applicants. At the hearings, employee advocates contended the practice could be illegal already under existing anti-discrimination laws because it could have a disparate impact on minority groups, whose unemployment rate is significantly higher than whites, on older Americans, who have remained out of work longer than young employees in the current recession, as well as on women and the disabled, who also tend to have higher rates of unemployment.
 

Federal Judge Limits Attorneys\' Fee Award to Amount in Retainer Agreement

September 21, 2011

By Richard G. Kass

In an important victory for defendants, U.S. District Judge Lawrence McKenna of the Southern District of New York recently issued a decision limiting the attorneys' fees awarded to prevailing plaintiffs to the percentage of the recovery stated in the plaintiffs' retainer agreements with their lawyers, Vysovsky v. Glassman. Ordinarily, when a plaintiff wins a case under a statute that permits an award of attorneys' fees, the court will determine the amount of the fee by multiplying the hourly rate charged by lawyers of similar experience in that field (the “lodestar” rate) by the number of hours proven to have been devoted to the successful claims in the case. The result is a "presumptively reasonable" fee. In Vysovsky, the plaintiffs' lawyers submitted affidavits showing that by this method the defendants would owe them $366,716 - a sum far in excess of the $143,203 awarded by the jury to the eight successful plaintiffs in the case.

Judge McKenna refused to use this method. He granted the defendants' demand that the plaintiffs produce copies of their retainer agreements, and agreed with the defendants that the plaintiffs' lawyers should be limited to the percentage fee in those agreements. This resulted in a total attorneys' fee award of $55,885. Instead of the $350 per hour they requested, the plaintiffs' lawyers ended up with approximately $53 per hour.
 

It seems like common sense that an attorneys' fee award should be limited by the amount set in the attorney’s retainer agreement with the client. However, it is rare to find reported cases decided that way, because defendants rarely demand copies of retainer agreements in discovery, and because judges are so accustomed to using the "lodestar" method they are reluctant to award attorneys' fees in any other way.

The result in Vysovsky, though unusual, is in perfect accord with the policies underlying the "lodestar" method. The statutes that permit attorneys' fees awards provide that the plaintiff should be reimbursed for "reasonable" fees. If a lawyer writes a fee into his own retainer agreement, it should be considered presumptively reasonable. The "lodestar" method is intended to replicate the rate that the free market would award, but there is no better measure of the free market rate than the retainer agreement that was freely negotiated in that very market.

When a court awards attorneys' fees higher than those provided for in the retainer agreement, the plaintiff's lawyers end up with a premium for taking the case to trial instead of settling. This disincentive to settle increases the cost of justice for everyone -- except for the lucky plaintiffs' lawyers. By holding plaintiffs' lawyers to the fees in their retainer agreements, the courts can insure that no lawyer will have an incentive to turn down a reasonable settlement and instead go to trial in the hope of earning an inflated fee.
 

NYC Council Strengthens Religious Accommodation Law

August 24, 2011

By Subhash Viswanathan

On August 17, 2011, the New York City Council passed an amendment to the New York City Human Rights Law which will impose a higher burden on employers who assert that accommodating an employee’s or prospective employee’s religious observance or practice would constitute an “undue hardship.”

The amendment defines “undue hardship” as “requiring significant expense or difficulty (including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system).” The amendment also lists various factors that will be considered in determining whether the accommodation constitutes an undue economic hardship such as:

(i) the identifiable cost of the accommodation, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer;
(ii) the number of individuals who will need the particular accommodation to a sincerely held religious observance or practice; and
(iii) the degree to which the geographic separateness or administrative or fiscal relationship of the employer’s facilities (for employers with multiple facilities) will make the accommodation more difficult or expensive.

An employee or prospective employee is still required to show that the requested accommodation does not prevent him or her from performing the essential functions of the position.

Once Mayor Bloomberg signs the bill, the law will take effect immediately, impacting New York City employers and non-resident employers who may have employees working in New York City. Employers should review their job descriptions to ensure that the essential functions of the position are accurately described. Employers who have received religious accommodation requests should engage in an interactive process with the employee and use the above factors as parameters for granting or denying a request.
 

EEOC Takes Aim at Employers' Hiring Practices

July 12, 2011

By Christa Richer Cook

Although many tend to think the days of intentional gender or race discrimination in hiring are long gone, the U.S. Equal Employment Opportunity Commission recently held a public meeting focusing on this very topic. Why is the EEOC focusing on discriminatory hiring? According to the EEOC’s press release, disparate treatment in hiring is widespread despite the fact that many employers today invest a significant amount of time and effort in diversifying their workforce in order to gain a competitive edge. The EEOC’s General Counsel, P. David Lopez, believes that minorities are unlawfully denied employment opportunities due to employers’ efforts to conform to discriminatory customer preferences, hiring managers’ reliance on prohibited stereotypes about certain jobs, and the use of narrow recruiting procedures which fail to attract a diversified applicant pool.

Over the past two years, failure to hire complaints have comprised only 6% of all charges filed with the EEOC. The most common were age discrimination cases. Yet, a plaintiff’s employment lawyer and several EEOC officials who testified at the meeting claimed that such discrimination is underreported and urged the EEOC to invest additional resources in investigation of systemic, pattern and practice cases of discriminatory hiring. A management-side attorney who testified at the hearing acknowledged the value of employer training in this area, but advised against implementing a “one size fits all” approach to mandatory training or other EEOC programs. The attorney also recommended that the Commission update its 1998 Best Practices of Private Sector Employers report.
 

EEOC Chair Jacqueline Berrien indicated that employers can expect the EEOC to implement more vigorous enforcement efforts targeting potential cases of disparate treatment in hiring. Specifically, we will likely see an increase in the number of EEOC-initiated charges and pattern and practice cases. EEOC investigators may also begin to more closely analyze employers’ EEO-1 and/or OFCCP reports, and rely on information gathered from their investigation of other charges in order to identify targets for investigation of possible systemic discrimination in hiring.

How can employers prepare for this enforcement initiative? While courts have recognized that employers must use subjective, business judgment when hiring employees, the use of objective criteria in evaluating applicants better ensures that selection procedures are applied in a nondiscriminatory manner. Employers will be better equipped to defend failure to hire claims if they: 1) maintain records of the hiring process, including, when possible, applications submitted through the internet; 2) provide diversity training for all employees to emphasize the importance of a diverse workforce; 3) update equal employment opportunity polices and take action against managers who fail to follow those policies; 4) conduct periodic internal audits to assess potential disparate impact in hiring practices and to ensure that employment decisions are job-related; and 5) provide up-to-date training for managers involved in the hiring process.
 

High Court's Wal-Mart Decision Makes It More Difficult to Bring Employment-Related Class Action

June 22, 2011

By Erin S. Torcello

In a huge victory for the nation’s largest private employer, the United States Supreme Court ruled on June 20, 2011, that a class comprised of an estimated 1.5 million former and current female Wal-Mart employees could not proceed with a class action lawsuit alleging gender discrimination under Title VII of the Civil Rights Act of 1964. Due in part to the sheer magnitude of the proposed class, the case – Wal-Mart Stores, Inc. v. Dukes – has received an enormous amount of media attention. At least within legal circles, the decision is likely to continue to receive attention for years to come because it has a significant impact on the standard used to determine whether the claims of diverse plaintiffs have enough in common to be certified as a class action.   The decision will make it much more difficult for very large groups of plaintiffs to litigate their employment-related claims together and thereby increase their economic leverage in litigation.

The issue before the Court was whether the former and current employees could proceed with their claims together in the form of a class action sex discrimination lawsuit. The plaintiffs alleged that Wal-Mart discriminated against female employees by denying them equal pay and/or promotions. More specifically, the plaintiffs contended that the discrimination was due to Wal-Mart’s pay and promotions policy. The policy generally left pay and promotion decisions to the broad discretion of managers and supervisors. There was little oversight of such decisions by upper management. The plaintiffs contended that this broad discretion fostered a discriminatory corporate culture that included the use of gender stereotypes in pay and promotion decisions.
 

Wal-Mart countered by arguing that the plaintiffs could not satisfy the legal prerequisites for a class action. Under federal law, in order to be certified as a class, the plaintiffs must demonstrate that there are questions of law or fact common to the class. Wal-Mart contended that the plaintiffs could not meet this “commonality” standard because their individual experiences with the Company were so vastly different, decision-making was decentralized, and the only written policy that was relevant was one that prohibited all forms of discrimination. In other words, Wal-Mart argued there was no evidence of an illegal policy or practice common to all of the plaintiffs.

Ultimately, the Supreme Court agreed with Wal-Mart. The Court held that while the plaintiffs all alleged gender discrimination in pay or promotions, the mere evidence of a common injury (i.e., all members alleging a Title VII violation) does not meet the commonality standard. The Court explained that it was the plaintiffs’ burden to show “significant proof” that the Company operated under a “general policy of discrimination.” The Wal-Mart employees, however, could not point to any such policy. If anything, the Court noted that Wal-Mart’s policy was just the opposite of a uniform corporate policy. Each manager and supervisor had significant discretion in making pay and promotion decisions. The plaintiffs did argue that the practice of giving managers and supervisors discretion was a policy which had a discriminatory disparate impact. While acknowledging that such a policy could theoretically be the basis for a Title VII disparate impact claim, the Court concluded that this theoretical possibility was not sufficient alone to satisfy the commonality requirement. Instead, that policy of discretion had to be tied to a specific employment practice which, in turn, tied the 1.5 million claims together. The Court concluded that the plaintiffs had no such evidence, finding that the plaintiffs’ statistical evidence regarding pay and promotion, anecdotal accounts of discrimination by a fraction of the class members, and testimony from a sociologist about the impact of Wal-Mart’s corporate culture, were all insufficient to satisfy the plaintiffs’ burden of showing commonality.
 

Federal Court Concludes EEOC Subpoena Is Improper Fishing Expedition

May 26, 2011

By Subhash Viswanathan

The subpoena power of the EEOC is very broad, and entitles the EEOC to obtain information relevant to its investigation of a charge of discrimination. But a federal district court recently concluded that there are limits to that power, and that it does not necessarily entitle EEOC to obtain information about corporate-wide policies or other potential claimants when the information sought will not shed light on the charge it is investigating.

The case arose when the former employee of a nursing home owned by the University of Pittsburgh Medical Center (“UPMC”) filed a charge of disability discrimination. According to the Court’s opinion, the nursing home responded to the charge by contending the former employee had been discharged pursuant to a policy which provided for a maximum medical leave of 14 weeks. The EEOC then served a subpoena on UPMC, not just the nursing home, demanding production of information on every UPMC employee, not just nursing home employees, terminated pursuant to the policy since July 1, 2008. UPMC has approximately 48,000 employees, the nursing home 170.
 

EEOC sought the information to investigate a corporate-wide application of the leave policy and to determine if there were other potential ADA claimants. The EEOC’s theory was that application of the policy could deprive employees of additional unpaid leave as a reasonable accommodation. UPMC objected to the subpoena and refused to comply, so EEOC sought to enforce the subpoena in court. The Court rejected that effort, concluding that the subpoena was an improper fishing expedition.

In reaching this conclusion, the Court relied on a 2010 decision from the United States Court of Appeals for the Third Circuit, EEOC v. Kronos, Inc., which holds that in order to be valid, an EEOC subpoena must seek information relevant to the charge under investigation. The Court noted that although the EEOC need not ignore facts that might be related to other claims of discrimination if it uncovers them during its investigation of a pending charge, the ability to pursue such facts does not give the EEOC “unconstrained investigative authority.” The information it seeks must still be relevant to the charge under investigation, and/or arise out of its investigation of the charge. The Court concluded that neither standard was satisfied in the case before it. The information was not relevant to the charge under investigation because the only reason EEOC wanted it was to conduct a broader investigation of UPMC’s corporate leave policy, and to find other potential claimants. EEOC offered no explanation of how the requested information might shed light on the charge under investigation. And the subpoenaed information did not arise out of the investigation of the charge, because it was clear from the facts that EEOC had not conducted any investigation of the facts related to the charge before issuing the subpoena.
 

Supreme Court's "Cat's Paw" Decision Reaffirms Importance of Thorough Workplace Investigations

May 15, 2011

By Mark A. Moldenhauer

The U.S. Supreme Court’s recent decision in Staub v. Proctor Hospital is a timely reminder of the importance of conducting thorough and objective workplace investigations. By holding that an employer may be liable based on the discriminatory animus of a supervisor who influenced, but did not ultimately make, an adverse employment decision, the case resolves a split in the various U.S. Circuit Courts of Appeals concerning the so-called “cat’s paw” theory of discrimination.

Staub, an Army Reservist, sued his former employer under the Uniformed Services Employment and Reemployment Rights Act (USERRA), arguing that his termination was caused by his supervisor’s obvious hostility to his military obligations. Although the ultimate decision maker was not similarly biased, the plaintiff argued that the employer was nevertheless liable under a “cat’s paw” theory: that the unbiased supervisor was the dupe or tool of the biased supervisor. The Seventh Circuit Court of Appeals rejected the plaintiff’s argument and dismissed the case on summary judgment. The Supreme Court reversed, ruling that an employer can be liable under a “cat’s paw” theory if it can be shown that the supervisor’s bias was a proximate cause of the challenged employment action. The case was remanded to the lower court for further consideration.
 

In its decision, the Supreme Court specifically considered the effect internal investigations may have on employer liability in “cat’s paw” cases. It noted that liability may be avoided in some instances if the employer can demonstrate that the adverse action followed an independent investigation that was not tainted by the biased supervisor’s recommendation. If, however, the investigation takes into account the biased supervisor’s recommendation without independently determining that the ultimate adverse action was justified, the biased supervisor’s recommendation remains a causal factor, opening the door to liability.

In light of the Staub decision, it is critical that employers review their workplace practices to ensure that internal investigation are conducted in a thorough and objective manner. Click here for a few tips on conducting effective investigations.

Diane M. Pietraszewski contributed to this post.