U.S. Supreme Court Throws Curve Balls At Employers
Opening day for the Colorado Rockies at Coors Field is Friday, April 1, 2011. It is a day of excitement, anticipation, feigned illnesses, and sell out crowds. Not only does baseball season start on a Friday this year (it has been Mondays since 1905), but it also falls on April Fools Day. Given these oddities, I can't help but wonder if there is the slightest chance that the U.S. Supreme Court may say "April Fools!" when it comes to the first two major employment law decisions of 2011. Rather than create bright line tests, these cases seem to create more confusion than clarity - and most certainly, feel like the Court is throwing employers some major curve balls.
Court Finds Third Party Title VII Retaliation Claims Are Viable
In Thomspon v. North American Stainless, L.P. (PDF), Eric Thompson and his fiance, Miriam Regalado, both worked for North American Stainless. Ms. Regalado filed a charge of sex discrimination against the company with the Equal Employment Opportunity Commission. Mr. Thompson was fired three weeks later. Mr. Thompson claimed he was fired because of his fiance's complaint. North American Stainless said his termination was based on performance problems. The district court granted summary judgment in favor of North American Stainless, finding that third party retaliation claims were not permitted by Title VII. On appeal, the 6th Circuit Court of Appeals affirmed. Certiorari was granted and oral argument took place on December 7, 2010. On January 24, 2011, the U.S. Supreme Court, in a unanimous decision, held:
Title VII's antiretaliation provision must be construed to cover a broad range of employer conduct. Burlington N. & S. F. R. Co. v. White, 548 U. S. 53 (2006). It prohibits any employer action that well might have dissuaded a reasonable worker from making or supporting a discrimination charge. We think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired.
The Court went on to state:
We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize. As we explained in Burlington, 548 U.S. at 69, "the significance of any given act of retaliation will often depend upon the particular circumstances." Given the broad statutory text and the variety of workplace contexts in which retaliation may occur, Title VII's antiretaliation provision is simply not reducible to a comprehensive set of clear rules.
Not only do retaliation claims generally pose the greatest risk to employers because of their amorphous nature, but now, companies are facing a brand new type of retaliation - one that arises from an employee who has a mere relationship with another employee who engaged in protected activity. Prior to this case, the anti-retaliaton provisions of Title VII were simply held not to apply to third parties. Now, the U.S. Supreme Court says that third party retaliation claims are viable, but provides little guidance as to the class of individuals that fall under protection. As a result, expect more litigation on this issue to define just how far the anti-retaliation provisions may stretch.
'Cat's Paw' Liability in Discrimination Cases Turns on Proximate Cause
There were high hopes that the Court's decision in Staub v. Proctor Hospital (PDF) would resolve the split in circuits regarding the 'cat's paw' theory of liability in employment discrimination cases. I wrote about 'cat's paw' liability generally, the oral argument that took place on November 2, 2010, and the various tests that have been applied by the circuit courts for the American Bar Association Labor and Employment Flash. Although Staub involves the Uniformed Services Employment and Reemployment Rights Act (USERRA), its language is "very similar to Title VII," in that employers are prohibited from engaging in certain actions if the employee's protected status is a "motivating factor in the employer's action." As such, this case has ramifications far beyond military service discrimination.
On March 1, 2011, in an 8-0 decision written by Justice Scalia, the Court seemingly rejects the prior tests applied by the various circuit courts and instead, adopts a new formula for 'cat's paw' liability based on the tort theory of proximate cause. The Court held:
"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."
As Jon Hyman points out in his blog, this case hinges on a new test involving fact-based inquiries regarding "intent" and "proximate cause," which nearly guarantees that any case involving 'cat's paw' liability will be difficult, if not impossible, to be resolved on summary judgment and will go to trial - an expensive proposition for employers. My sense is that, had this case involved any other form of discrimination other than related to military service, we may have seen an entirely different result.