A Reminder to Employers: Taking a Step to Protect Yourselves
April 1, 2017
An April 2017 decision by the federal Sixth Circuit Court of Appeals could expand an employer’s liability for adverse employment actions unless the employer takes steps to avoid it. The Sixth Circuit’s decisions apply in Ohio, Michigan, Kentucky and Tennessee.
There is a liability theory known as the “cat’s paw.” The court explained the meaning of the term “cat’s paw” in the employment context as referring to “a situation in which a biased subordinate, who lacks decisionmaking power, uses the formal decisionmaker as a dupe in a deliberate scheme to trigger a discriminatory employment action.” This theory has been applied by many courts when there has been a claim of adverse employment action against an employee in a protected category (e.g., based on age, race, ethnicity, sex, religion, disability), or who has engaged in a protected activity.
In Marshall v. Rawlings Company, LLC (6th Cir., April 20, 2017), the protected activity was the employee’s use of FMLA leave. The court noted that it had previously assumed that the cat’s paw liability theory would be available to an employee who claimed to have suffered an adverse employment action in retaliation for using FMLA leave, but the court previously had not actually decided that question.
Marshall claimed that two low level supervisors exhibited bias against her after her first use of FMLA leave for depression, anxiety and PTSD. Her claim was that, because work had become backlogged during her absence, upon her return from leave, the supervisors influenced a decision to demote her, and in doing so treated her differently than others in her position who had backlogs but had not used FMLA leave. Marshall claimed that even as she was recognized for high performance in the demoted position, those supervisors harassed her about her use of FMLA leave for mental health issues.
During the next several months, Marshall used FMLA leave intermittently. The supervisors then called a disciplinary meeting and said Marshall was disengaged and unproductive. At that point, Marshall reported the harassment incidents. The Company’s in-house attorney met with her to discuss the harassment allegations, but decided the harassment was not based on a protected class, and that Marshall was just trying to avoid discipline. The attorney informed the Company owner that she felt the harassment allegation was unfounded. The owner then met with the allegedly harassing supervisor, decided Marshall had made a false allegation, and fired Marshall.
Marshall did not allege that the owner/decision-maker was biased against her. Instead, Marshall wanted the owner and company to be held liable for the supervisors’ bias.
The Court decided three related issues that applied to Marshall’s claim:
1. The issue is whether a decision-maker was deliberately manipulated by a biased subordinate. The Court decided that the cat’s paw theory can be applied even when there are multiple managerial or supervisory layers between the biased influences and the oblivious or unknowing ultimate decision-maker.
2. The traditional burden-shifting analysis for employment discrimination claims applies to cat’s-paw-based liability claims. The employee must show evidence of a prima facie case of discrimination; then the employer has the burden to articulate a non-discriminatory reason for its action; then the employee can try to show that the employer’s stated reason was a pretext for discrimination by proving that the decision-maker was the cat’s paw of a biased subordinate.
3. Typically, when there is a claim of employment discrimination, an important issue is the mindset – the honest belief – of the decision-maker: What did the decision-maker believe when he made the decision? The court said the decision-maker’s belief is not relevant when the claim involves the cat’s paw theory of liability. To protect against liability, an employer has a duty to independently investigate and gather facts, not simply rely on subordinate supervisors’ recommendations before making adverse employment decisions. But, the court recognized that an independent investigation will not necessarily defeat a cat’s paw claim. The decision-maker’s investigation must “determine that the adverse action was, apart from the supervisor’s recommendation, entirely justified” in order to defeat a cat’s paw claim.
Lisa E. Pizza, Spengler Nathanson P.L.L., 419-252-6227, firstname.lastname@example.org