High Court May Get Its Claws On Cat's Paw Theory

By Christine Caulfield

Law360, New York (November 20, 2009) -- After two aborted attempts to weigh in on the murky area of employment law, the U.S. Supreme Court may finally sink its claws in the so-called cat's paw theory of liability, resolving what has become a clear conflict among the federal appeals courts.

Earlier in November, the high court asked the U.S. solicitor general to express a view on the merits of a discrimination case brought by Army reservist Vincent Staub, who alleged he was unfairly fired from his job as a technician at Illinois' Proctor Hospital because of his direct supervisors' bias against the U.S. military.

The dispute centers on whether the vice president of human relations at the hospital, who made the ultimate decision to terminate Staub, was merely the puppet or the so-called cat's paw of Staub's supervisors, who had openly expressed an anti-military sentiment, and publicly sought to remove him from his position.

The term “cat’s paw” stems from a fable written by 17th-century French poet Jean de la Fontaine, in which a monkey convinces a cat to steal chestnuts from a fire. The cat burns her paw in the attempt, but the monkey ultimately enjoys the fruits of her labors by gobbling up the chestnuts.

In employment case law, the cat's paw theory applies when a decision maker is influenced by a subordinate's bias when terminating an employee or taking some other adverse action, rendering the employer potentially liable to a discrimination claim.

Just what constitutes the appropriate standard of influence necessary to impute the animus of the nondecision maker to the decision maker, however, has become any circuit court's guess.

Recognizing an appeals court split on the issue, the Supreme Court has twice agreed to take up cases alleging cat's paw liability — Hill v. Lockheed Martin in 2004, and EEOC v. BCI Coca-Cola Bottling Co. in 2007 — but both cases were settled by the parties before oral argument was scheduled, leaving employers open to disparate standards across the country.

“You have almost three different schools of thought, so it's definitely ripe for adjudication by the Supreme Court,” said Leah Lively, chair of Lane Powell PC's labor and employment practice.

The U.S. Court of Appeals for the Seventh Circuit — which heard Staub's case — and the Fourth Circuit in the Hill case, have adopted the toughest, most pro-employer standard, requiring plaintiff employees to make a showing that the discriminatory motive of a subordinate was of a singular influence in the termination decision.

“The Seventh and Fourth circuits apply the rule that the biased person has to be, in essence, the functional decision maker,” said Jonathan Keselenko, a partner at Foley Hoag LLP.

The Seventh Circuit further ruled that if the official decision maker conducts an independent investigation before terminating an employee, then no amount of influence by the biased subordinate suffices to attach cat's paw liability, explained Ellen Martin, a partner at Patterson Belknap Webb & Tyler LLP.

“If the decision maker does his or her own investigation, that's the end of the inquiry,” Martin said. “You don't then look to see how much influence somebody else had.”

The most liberal standard is applied by the First, Second, Third, Fifth and Eighth circuits, which all hold that an employer can be found liable for discrimination if a biased subordinate has some degree of influence on the decision to fire an employee.

The Second Circuit, for example, ruled for the employee in 2008’s Craig Holcomb v. Iona College case after finding that bias “played a meaningful role” in the college's decision to sack its basketball coach.

“A Title VII plaintiff is entitled to succeed even absent evidence of illegitimate bias on the part of the ultimate decision maker, so long as the individual shown to have the impermissible bias played a meaningful role in the ... process,” the appeals court ruled.

Then there is the middle ground, or the so-called causation standard, which is applied by the Sixth, Ninth, Tenth and Eleventh circuits, and requires a plaintiff to show that the biased subordinate was the cause of the termination decision.

That standard, said Vinson & Elkins LLP partner Vanessa Griffith, was exemplified by the Tenth Circuit's 2006 ruling in the BCI Coca-Cola case, in which the court said that BCI Coca-Cola could be held liable because the human rights official who fired the employee plaintiff relied on the tainted information of the plaintiff's immediate supervisor, who discriminated against black employees.

Cat's paw liability could be established in that case despite the fact that the official had never met the plaintiff and didn't even know that he was black, the appeals court ruled.

“If the decision is affected by somebody who had a discriminatory motive, the employer could potentially be liable even if the ultimate decision maker didn't harbor any illegitimate motives,” Griffith said.

While perhaps not starkly diverging and often case-specific, the differing benchmarks applied by the circuits are yet varied enough to warrant high court guidance, lawyers said.

“This issue is one that has been talked about and litigated for many years. It's an important issue, it comes up commonly in litigation and excellent judges have reached three essentially different results,” Keselenko said. “One would expect that at some point the Supreme Court will have to address this.”

But whether the solicitor general advocates Staub as the right vehicle for the high court to provide guidance and establish a uniform cat's paw standard across the U.S. is difficult to predict, he said.

Staub's discrimination claim was asserted not under Title VII, but the less often invoked Uniformed Services Employment and Reemployment Rights Act, and his employer has argued that the facts of the case made it inappropriate for high court review.

Proctor Hospital told the court in its brief in opposition to certiorari that resolution of the cat's paw issue would not alter the outcome of the Staub case. It also contended that the legal question posed required an “intricate study of salient details buried in the record.”

“The employer doesn't argue that the court shouldn't take up the cat's paw issue but that this is not the right case,” Keselenko said.

If the high court does take up the case in spite of Proctor Hospital's opposition, just what standard it will settle on is also difficult to predict, lawyers said.

If the justices were to adopt the most liberal standard, Keselenko said, they would have to do more than allow for any degree of biased influence to trigger cat's paw liability.

“The standard itself is inherently murky. They would have to put more metrics on it,” he said.

The adoption of the high bar set by the Seventh and Fourth circuits would be the better outcome, Griffith said.

“I think the influence should be significant or substantial, not just any influence,” she said. “There has to be a logical end to the extent with which we can explore the decisions made in an employee's career history.”

The middle ground, or causation standard, is the one likely to be favored by the justices, according to Lively, requiring as it would the same logic used by the high court in its seminal ruling on the mixed-motive theory of liability.

In that ruling — Desert Palace Inc. v. Costa in 2003 — the Supreme Court found that direct evidence of discrimination was not required for a plaintiff to argue that discrimination, while not the sole reason for the contested employment decision, was nonetheless a motivating factor.

“The same logic could apply for cat's paw liability,” Lively said. “So if you have a nonbiased person and a biased person, the employer is not absolutely absolved under cat's paw.”

Whatever the standard it ultimately adopts, said Wendy Lazerson, co-leader of Bingham McCutchen LLP's labor and employment practice, the key for the high court will be to set one that is well defined and adopted consistently.

“Of course the facts of each case are always going to be different, but having the circuits all over the place is just not workable,” she said.

Staub is represented by Eric Schnapper, law professor at the University of Washington School of Law.

Proctor Hospital is represented by Davis & Campbell LLC.

The case is Staub v. Proctor Hospital, case number 09-400, in the U.S. Supreme Court.

--Additional reporting by Jacqueline Bell