Employers May Now Be Liable For Non-Decision Maker's Bias.

March 2011

On March 1, the U.S. Supreme Court held that employers may be liable for the biased motives of supervisors who influence, but do not decide, employment actions. Applying a “cat’s paw” theory, the Court declared that liability can be imputed to the employer when the biased supervisor uses the decision maker as a “pawn” to accomplish a discriminatory employment action.

In this case, the employee, a military reservist, was allegedly subjected to hostile treatment by his supervisors. As a reservist, the employee was obligated to attend training sessions one weekend a month and two full weeks during the year, as well as to report to active duty when called. However, the supervisors, according to the employee, began scheduling him to work on weekends, creating conflicts with his military duties. On occasions, the supervisors purportedly forced him to use his vacation time to attend military training and supposedly made derogatory comments about the employee’s military affiliation.

Thereafter, the employee informed his supervisors that he had been called to report for training. Not long after this announcement, the employee received a written warning from his supervisor for ignoring his job duties, accompanied by a list of procedures to follow when leaving his work area. A few months later, the employee was confronted for violating the terms of his written warning. At that point, the department head involved Human Resources. The Vice President of Human Resources, after reviewing the employee’s file, including his annual reviews and warnings, made a decision to terminate him. While this decision was made by the Vice President, she allegedly relied on input from the employee’s supervisors. The Vice President herself, however, did not make the termination decision based on the employee’s military involvement.

Thereafter, the employee filed a lawsuit against his former employer pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), alleging that he was terminated based on his military involvement. USERRA prohibits employers from denying, among other things, “retention in employment” based on a person’s obligation to perform uniformed military service. At trial, a jury found the employer liable. The Circuit Court of Appeals, however, reversed, holding that there was insufficient evidence to impute discriminatory animus to the employer. More specifically, the Circuit Court of Appeals explained the evidence was insufficient to conclude that the supervisors had any influence over the ultimate decision-maker, who was admittedly unbiased.

The U.S. Supreme Court, however, felt differently. In its decision, the Supreme Court held that when a supervisor performs an act based on an illegal motive with intent to cause an adverse employment action, and this act is a proximate cause of the ultimate employment action, employer liability may exist. While declining to issue a clearly defined rule for employers to follow, the Court did note a limited exception to liability in cases where biased non-decision makers may have involvement in an employment action. That is, if the decision-maker’s independent investigation reveals a reason for the adverse employment action which is unrelated to any “tainted” information, the employer will not be found liable.

If, however, recommendations and warnings issued by biased supervisors are considered in rendering the employment decision, employer liability may exist, even when the ultimate decision-maker remains undeniably unbiased. Thus, employers would be wise to carefully review any underlying disciplinary actions and information that form the basis of adverse employment decisions.