Labor & Employment Law

Supreme Court upholds liability in cat's paw case

Staub v. Proctor Hospital (US Supreme Court 03/01/2011): Corporate liability can based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision. [Details] 

The US Supreme Court held today 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."

Staub was a military reservist. His immediate supervisor (Mulally) and Mulally's supervisor (Korenchuk) were hostile to his military obligations. Mulally gave Staub a disciplinary warning, and later Korenchuk reported to the employer's human resources vice president (Buck) that Staub had violated the terms of the warning. Buck reviewed Staub's file and decided to fire him. Staub claimed that Mulally had fabricated the allegation underlying the warning out of hostility to his military obligation.

A jury found the employer liable and awarded Staub damages, but the 7th Circuit reversed, holding that the employer was entitled to judgment as a matter of law because the decisionmaker had relied on more than Mulally's and Korenchuk's advice in making her decision. The Supreme Court reversed.

The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which forbids an employer to deny "employment, reemployment, retention in employment, promotion, or any benefit of employment" based on a person's "membership" in or "obligation to perform service in a uniformed service" ... and provides that liability is established "if the person's membership ... is a motivating factor in the employer's action."

Applying the background of general tort law and agency law, the Court said, "it is axiomatic under tort law that the exercise of judgment by the decisionmaker [Buck] does not prevent the earlier agent's action (and hence the earlier agent's discriminatory animus) from being the proximate cause of the harm.

The Supreme Court remanded, leaving open the possibility that the trial court's jury instruction was harmless error.

Full post as published by Ross' Employment Law Blog on March 01, 2011 (boomark / email).