The U.S. Supreme Court has held, by unanimous opinion, that an employer may be held liable for employment discrimination under the Uniformed Services Employment and Reemployment Rights Act (USERRA) based on the “discriminatory animus” of an employee who influenced, but did not make, an ultimate employment decision. In interpreting the so-called "cat’s paw" theory of liability, the Court declined to adopt the approach suggested by the employer: that a decision-maker’s independent investigation and rejection of an employee’s allegations of discriminatory animus should negate the effect of any prior discrimination in subsequent actions against that employee. Instead, the Court held that "if a supervisor performs an act motivated by antimilitary animus 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 USERRA." Staub v. Proctor Hospital, No. 09-400, U.S. Supreme Court (March 1, 2011).

Vincent Staub was employed by Proctor Hospital as an angiography technologist, and is a veteran member of the U.S. Army Reserve. Staub’s immediate supervisor (Mulally), allegedly was hostile to Staub’s military obligations, often scheduling Staub to work on the weekend rotation, which created conflicts with his military drill schedule. According to Staub, Mulally also scheduled him for extra shifts so he could “pay back” his co-workers for making everyone else having to “bend over backwards” to cover his Reserve absences. Staub reported the problem to his department head (Korenchuk), without success. In fact, Korenchuk also allegedly made similar comments about Staub’s reservist duties, characterizing them as a “waste of taxpayers money."

In January of 2004, Staub received a Corrective Action form from Mulally. In April, Korenchuk informed Proctor Hospital’s vice president of human resources Linda Buck, that Staub had violated the January Corrective Action. Relying on Korenchuk’s accusation, Buck fired Staub. Staub filed suit against the Hospital claiming that his discharge was motivated by hostility to his military status, in violation of the USERRA. Specifically, Staub argued that while Buck was not hostile to his military obligations, Mulally and Korenchuk (who were hostile) influenced Buck’s ultimate employment decision. A jury found in Staub’s favor. The Seventh Circuit Court of Appeals reversed, ruling that Buck was not wholly dependent on the advice of Korenchuk and Mulally and, therefore, that the decision was not based upon Staun’s military status.

The issue before the Supreme Court was under what circumstances an employer may be held liable if the company official who makes an adverse employment decision has no discriminatory animus, but is influenced by previous company action that is the product of discriminatory animus in someone else. In deciding this issue, the Supreme Court pointed out that under the USERRA, employers are prohibited from engaging in certain employment actions if an employee’s membership in the uniformed services "is a motivating factor in the employer’s action." Staub argued that although Buck was not motivated by discriminatory animus in firing him, Proctor Hospital should be responsible because Mulally and Korenchuk acted with discriminatory animus in placing an unfavorable entry on his personnel record. Proctor Hospital argued that an employer is not liable unless the de facto (or actual) decision-maker has a discriminatory animus.

The Court held that Mulally’s and Korencuck’s discriminatory intent was sufficient for liability against the Hospital under the USERRA. In rejecting Proctor Hospital’s interpretation of USERRA as "implausible," the Court noted that the employer’s view would lead to the “improbable consequence that if an employer isolates a personnel official from an employee’s supervisors, vests the decision to take adverse employment actions in that official and asks that official to review the employee’s personnel file before taking the adverse action, then the employer will be effectively shielded from discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse action."

Based upon that rationale, the Court concluded that the presence of an independent investigation does not shield an employer from liability where the investigation took into account a supervisor’s biased report. According to the Court, in such circumstances, the employer is at fault “because one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision." Because there was evidence that Mulally’s and Korenchuk’s actions were motivated by hostility toward Staub’s military obligations, and because there was evidence that Mulally’s and Korenchuk’s actions were causal factors underlying Buck’s decision to fire Staub, the U.S. Supreme Court reversed and remanded, asking the Seventh Circuit to determine whether a new trial was warranted.

Employers should recognize the importance of this case in the disciplinary/decision-making process. When supervisors act in ways that might suggest discriminatory motives, those actions create unnecessary risks of litigation and possible liability for employers. Of note is the fact that in this case, the decision-maker did not do an independent investigation but instead, relied upon information provided by individuals with ulterior motives. Additional investigation or review of the circumstances could have provided a layer of “good faith” between the ultimate decision-maker and the discriminatory animus of Staub’s supervisors. According to the Court, “if an employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action . . . then the employer will not be liable."