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.