Periodically, a case comes along that reminds us that Title VII and § 1981 are not exactly identical statutes. The Seventh Circuit holds, in a case of first impression, that an individual employee (here, a human-resources executive) with a retaliatory motive may be individually liable under § 1981 for causing the employer to retaliate against an employee who complained about race harassment. In this case, though, the plaintiff ultimately fails to overturn the district court's summary judgment against his claim on the merits. The panel also criticizes the district court's refusal to allow the employee to respond to evidence raised by the employee in a reply brief.
Smith v. Bray, No. 11-1935 (7th Cir. May 24, 2012): The panel opinion sets the scene -
"Plaintiff Darrel Smith claims that he endured serious racist harassment from his immediate supervisor at former defendant Equistar Chemicals, LP, and was fired for complaining about it. Equistar was an affiliate of another former defendant, Lyondell Chemicals Company, but both companies are now bankrupt and discharged from any liability to Smith. His only hope for a damages remedy was to sue the individuals responsible for the alleged wrongs. Smith has settled his claims against the primary wrongdoer, his former supervisor James Bianchetta. This appeal involves Smith's claims against Equistar's human resources manager Denise Bray, who Smith says conspired with Bianchetta to retaliate against him in violation of § 1981. Smith asserts that Bray ignored his complaints about the harassment and persuaded her bosses to terminate him to retaliate for lodging them. The district court granted Bray's motion for summary judgment, and Smith appeals."
The panel holds that an HR executive who participates in an allegedly retaliatory act against an employee that complained about race discrimination may be liable for damages under § 1981. The Supreme Court in CBOCS West, Inc. v. Humphries, 553 U.S. 442 (2008), already recognized the retaliation claim against the employer itself. The panel also noted the "cat's paw" case law holding that an employer may be held liable where a subordinate causes the decisionmaker to take an adverse action against the employee.
The panel continues (with emphasis in original):
"So the substantial weight of authority shows that a cat's paw theory will support entity liability for retaliation under Title VII, § 1981, and § 1983, except perhaps when the defendant is a municipal corporation and the biased or retaliatory subordinate is not a policy-maker. . . . There is also precedent from five other circuits for imposing individual liability on the unlawfully motivated subordinate (the monkey, in the cat's paw fable) under § 1983. This case presents a related but distinct question of first impression: whether the subordinate with a retaliatory motive may be individually liable under § 1981 for causing the employer to retaliate against another employee."
The panel holds that such liability by the subordinate is allowed, consistent with the §§ 1981 and 1983 authority, especially in light of the case law that even the unaware decisionmaker can be held liable:
"It also makes sense as a matter of basic fairness: why should the 'hapless cat' (or at least his employer) get burned but not the malicious 'monkey'? The cat's paw theory can support individual liability under § 1981 for a subordinate employee who intentionally causes a decision-maker to take adverse action against another employee in retaliation for statutorily protected activity."
The panel also agrees that the plaintiff in this case presented a genuine issue of materila fact whether the HR intentionally caused the allegedly retaliatory termination of the employee:
"Viewing the evidence here in the light reasonably most favorable to Smith, Bray was substantially involved at every stage of his workplace controversies: his discrimination complaints, his disciplinary issues, his disability-leave application, and the decision to terminate him. She regularly participated in decisions on terminations. She spoke with plant manager Purgason frequently about Smith in the weeks leading up to his termination. A reasonable juror could infer that Purgason relied on Bray's input and advice in deciding to request authority to fire Smith."
The employee advanced an argument on appeal that blatantly retaliatory statements by the harasser could be admitted against the executive under the co-conspirator hearsay exception. The panel notes that the plaintiff was deprived of an opportunity to present the issue in the district court, because the employer only objected to the admissibility of the statements in its reply brief, which the employee then had no right to answer.
The panel holds that it could consider the new argument on appeal where there was no evidence in the record that the employee had an opportunity to make the argument in the district court. It rejects the notion that the employee could have sought leave to present the argument in a surreply brief:
"The same basic principles of fairness apply here. Where the appellant did not have a meaningful opportunity to be heard on the evidentiary issue in the district court, it would not be fair to refuse to consider his arguments presented for the first time on appeal. In managing summary judgment practice in their courts, district courts need to ensure that they do not base their decisions on issues raised in such a manner that the losing party never had a real chance to respond. If a district court does not provide an opportunity to be heard, our doors will be open to consider those arguments."
Nonetheless, the plaintiff loses the appeal when the panel holds - after considering the excluded evidence - that there was insufficient proof of a retaliatory motive imputable to the HR executive herself. While recognizing that employees in an enterprise can conspire to retaliate in violation of § 1981, there still needs to be evidence of an improper purpose, not merely evidence that the employees communicated about the adverse decision:
"In a corporation or other business or institution, one should expect to find some concerted action among people with different responsibilities who are expected to work together, like supervisors and human resources staff. In a case of individual liability, evidence of that legitimate concerted action should not be interpreted too easily as evidence of a conspiracy so that one person's admission of an unlawful motive is attributed to another."
Ultimately, the panel holds that Smith presented no evidence that the HR executive shared the supervisor's alleged unlawful purpose.