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April 26, 2011

Avoid Rubber Stamping Adverse Employment Actions

On March 1, 2011, the United States Supreme Court ruled that an employer may be liable for discrimination if a supervisor's discriminatory intent was the proximate cause of an unbiased decision maker's adverse employment action against an individual. Specifically, the Supreme Court in Staub v. Proctor Hospital, 552 U.S. ___ (2011), held that "["¦] if a supervisor performs an act motivated by antimilitary animus [i.e. discrimination] 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 the [Uniformed Services Employment and Reemployment Rights Act]." This ruling confirms a recent judicial trend in expanding employer liability for discrimination claims, and sets the stage for a similar claim under Title VII of the Civil Rights Act of 1964.

The Uniformed Services Employment and Reemployment Rights Act ("USERRA") provides that an individual who served in uniformed service "shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment by an employer on the basis of the membership." USERRA further provides that an employer shall be considered to have engaged in actions prohibited under USERRA if the individual's membership is a "motivating factor in the employer's action, unless the employer can prove that action would have been taken in the absence of such membership."

In Staub, the plaintiff worked as an angiography technician at Proctor Hospital until 2004, when he was terminated. While employed by the hospital, Staub was a member of the United States Army Reserve. Two of Staub's supervisors displayed disdain for his military obligations in the form of negative remarks regarding the military and forcing Staub to work additional shifts without notice so that he would "pay back the department for everyone else having to bend over backwards to cover his schedule for the Reserves." In April 2004, one of Staub's supervisors alleged that he had violated a disciplinary warning and recommended Staub's termination to the hospital's vice president of human resources as well as the hospital's chief operating officer. The vice president of human resources briefly reviewed Staub's personnel file and sent him a notice of termination alleging that Staub had ignored the directive issued in the corrective action. Staub brought a "cat's-paw" claim under USERRA, alleging that his termination was motivated by hostility to his obligations as a military reservist, and won a verdict in the trial court. The Seventh Circuit Court of Appeals subsequently overturned the verdict and the Supreme Court granted certiorari pursuant to Staub's appeal.

The Supreme Court began its analysis by noting that the difficulty in the case was construing the phrase "motivating factor in the employer's action" under USERRA. The problem, according to the Supreme Court, arises when a company official takes an adverse employment action and has "no discriminatory animus, but is influenced by previous company action that is the product of a like animus in someone else." In analyzing the issue at hand the Supreme Court turned to agency law to determine whether or not the discriminatory animus of an employee can be imputed to the employer. The Supreme Court found, regardless of the employer's intent, that the discriminatory animus can be attributed so long as the adverse action is the intended consequence of the agent's action.

The Supreme Court also reviewed whether the link between the discriminatory animus of one agent and the decision of the agent acting for the employer was "too remote, purely contingent or indirect," and concluded that the discriminatory animus was the proximate cause of the termination because "one of [the hospital's] agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision." Moreover, if an employer conducts an "independent investigation" it will not avoid liability "if the independent investigation" relies on facts provided by a biased supervisor because the employer will have effectively delegated the fact finding portion of the investigation to the biased supervisor.

While the decision is limited to claims arising under USERRA, the Court noted that USERRA was "very similar to Title VII, which prohibits 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." In light of this recent ruling, employers should ensure that any adverse employment action is thoroughly investigated and avoid rubber stamping adverse employment actions.

If you have any questions or require our assistance in reviewing your policies or conducting management training, please contact the Hiscock & Barclay lawyer with whom you normally work or any attorney in our Labor & Employment practice area.

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