Staub v. Proctor Hospital (U.S. S. Ct. No. 09-400)

| Apr 18, 2010 | Daily Developments in EEO Law |

The U.S. courts of appeals have wrestled for years over the proper agency standard to apply under Title VII and other employment statutes when a discriminatory manager sets into motion — but does not him/herself carry out — an adverse employment action. The Supreme Court agreed to review the question today, picking up an issue that it once had before it (in the 2006 term) before the petitioner voluntarily dismissed the writ.

In 2007, the U.S. Supreme Court granted certiorari and heard oral argument in BCI Coca-Cola Bottling Company of Los Angeles v. EEOC, No. 06-341. That case presented the question — which has long divided the federal courts — of whether an employer can be held liable under Title VII for an adverse action that was prompted or caused by a discriminatory manager, but was actually carried out by someone else in the company who was (said to be) unaware of the discriminatory motive. In the Tenth Circuit, a panel had reversed summary judgment for the employer and remanded the case to the district court for trial, but the Supreme Court granted cert. After briefing and oral argument, the petitioner voluntarily dismissed their own petition, and eventually the case settled for $250,000.

The issue is presented once again, but under a new procedural setting that makes a repeat of BCI Coca-Cola less likely. For here, it was the plaintiff who won below — at trial, with a jury award of $57,640 — only to have it taken away on appeal by the Seventh Circuit, which granted judgment for the employer. The panel relied on what has become to be known as the “cat’s paw” theory (named after a 17th century fable, where a cat tricks a monkey into retrieving hot chestnuts from a fire). Under the Seventh Circuit approach, an employer can only be held liable for an innocent manager’s action if that manager was manipulated into taking it by another, biased employee. Where the manager undertook a separate, unbiased investigation of an employee, and took independent action, the other employee’s bias becomes (under this framework) immaterial. 

The case arises not under Title VII, but a less-commonly litigated statute, the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. § 4301 et seq. The plaintiff, an Army reservist, was fired from his position as an angiography technologist, and contended that the reasons given were just a pretext for discrimination based on his association with the military.

Starting around the year 2000, Staub began to run in flak from the scheduling manager because of work conflicts with his reservist duties. As the Seventh Circuit panel summarized the trial evidence:

“It was around that time that Janice Mulally, second in command of the Diagnostic Imaging Department, began to prepare the department work schedules. Staub would notify Mulally of his drill and training obligations, which occupied one weekend per month and two weeks during the summer. Before Mulally took over scheduling, Staub had weekends off. But Mulally placed Staub back in the weekend rotation, creating conflicts with his drill schedule. Mulally did this even though she had advance notice of Staub’s military obligations, and when Staub approached her about the issue she became agitated. Beginning in 2000, the scheduling conflicts were only ‘occasional,’ but Mulally’s attitude reflected a deeper problem. Mulally responded to Staub’s questions by throwing him out of her office and saying she ‘didn’t want to deal with it.’ Staub found some relief by going to department head Michael Korenchuk, yet it was far from complete. Sometimes Mulally would change Staub’s schedule after Korenchuk spoke with her, but other times she would post a notice on the bulletin board stating that volunteers were needed to cover the drill weekends, portraying Staub as irresponsible. And occasionally Mulally made Staub use his vacation time for drill days or scheduled him for addition al shifts without notice. Mulally made her reasons plain: She called Staub’s military duties ‘bullshit’ and said the extra shifts were his ‘way of paying back the department for everyone else having to bend over backwards to cover [his] schedule for the Reserves.’ And it came as no surprise that Korenchuk did little to remedy the situation. Although Korenchuk only commented about Staub’s reserve duties on a ‘couple different occasions,’ these comments were none too subtle. Korenchuk characterized drill weekends as ‘Army Reserve bullshit’ and ‘a b[u]nch of smoking and joking and [a] waste of taxpayers[‘] money.'”

Hostilities deepened when Staub was called up for active duty in 2003:

[Staub co-worker] Knoerle left her post in July of 2003, to be replaced by Leslie Sweborg. Two weeks into the job, Sweborg met Mulally and another coworker, Angie Day, for drinks after work. Expecting nothing more than casual chit-chat, Sweborg was shocked when the conversation turned to Staub. Mulally was blunt: ‘She said that [Staub’s] military duty had been a strain on the[] department’ and ‘she did not like him as an employee.’ So Mulally asked Sweborg ‘to help her get rid of him.’ Sweborg refused. In her opinion, Staub was always competent and professional, and there was no reason for such animosity.

Mulally went so far as to call Staub’s commanding officer to chew him out:

“Shortly afterwards she called Staub’s Reserve Unit Administrator, Joseph Abbidini, in Bartonville, Illinois. Mulally had called Abbidini on a prior occasion to confirm that Staub was actually a member of the Reserves, but now she wanted to know if Staub could be excused from some of his military duties. Mulally asked Abbidini if Staub really had to attend two-week training in the summer because he was needed at work. Abbidini stated that the training was mandatory. Most Reserve members have outside employment, he explained, so excusing Staub would set an ugly precedent. Mulally’s response? She called Abbadini an ‘asshole’ and hung up. (Again, we add that we are, as we are required to do at this stage of the proceedings, taking all facts in the light most favorable to Mr. Staub.)”

At trial, the hospital’s defense was that the decision to terminate Staub was made not by the above managers, but was instigated instead by Angie Day, who met with Linda Buck (vice-president of Human Resources), Korenchuk and others about Staub’s supposedly unjustified absences and disappearances from the workplace, and his defiant behavior.  After one such absence, on April 20, 2004, Buck (with Korenchuk’s input) decided to fire Staub. Buck testified that she relied on other information in making this decision:

“She said she heard ‘frequent complaints’ about Staub during her first year with Proctor, 2001. And she knew of two workers who resigned because of Staub in 2002: an angio tech quit because Staub made her feel like ‘gum on the bottom of his shoe,’ and a registered nurse gave up for similar reasons. What’s more, a recruiter told Buck she had difficulty attracting workers to angio because Staub ‘had a reputation.’ Among other things, he was known for flirting with medical students.”

A jury, weighing all of the testimony, credited Staub’s side of the controversy and held he was fired because of his reservist duty.

The Seventh Circuit, though, held that the record — even in the light most favorable to the winning plaintiff — did not support employer liability. It held (consistent with the circuit’s prior case law) that the decision was made by an executive who was unconnected to the alleged bias, conducted a separate inviestigation and who was seemingly void of an anti-military bias: “By asking whether the decision maker conducted her own investigation and analysis, we respected the role of the decision maker. We were, and remain to this day, unprepared to find an employer liable based on a non decision maker’s animus unless the ‘decision maker’ herself held that title only nominally. If the decision maker wasn’t used as a cat’s paw — if she didn’t just take the monkey’s word for it, as it were — then of course the ory is not in play.”

The circuits are not in accord on this approach to imputing liability to an employer; some have accepted a far less forgiving approach, allowing liability to attach of the biased employee “caused” (in a proximate causation sense) the adverse action. Now, presumably, the Supreme Court will straighten this out.

The Solicitor General’s lucid invitation brief may be found here.

The Seventh Circuit panel decision, somewhat less lucid, may be found here.

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