The Supreme Court Sharpens the Claws of the “Cat’s Paw” Theory

In our July 2009 newsletter, we highlighted then-recent decisions evaluating the “cat’s paw” theory of liability in discrimination cases.  Under that theory, an employer can be liable for discrimination where the supervisor who harbored discriminatory animus towards the plaintiff influenced an adverse action, but did not in fact make the ultimate decision.

In Staub v. Proctor Hospital, cited in that same issue, the plaintiff sued for discriminatory discharge in violation of USERRA, which protects members of the military.  He claimed that he was terminated due to the antimilitary animus of two supervisors.  The company contended that the termination decision was made by an individual in Human Resources who relied, in part, on information provided by the supervisors but who did not herself harbor antimilitary animus.  The plaintiff argued that Human Resources’ actions were insufficient, and that the company was liable for discrimination based on the animus of his supervisors, which led to his discharge.

While the jury agreed with the plaintiff, the Seventh Circuit did not.  Instead, the Seventh Circuit held that cat’s paw liability exists only where a non-decision making supervisor exercises “singular influence” over the decision maker, such that the discriminatory action was the product of “blind reliance.”  Because the ultimate decision maker in Staub did not rely solely upon the information of the hostile supervisors, but also investigated some of the facts relevant to the termination on her own, the court held that the employer did not violate USERRA when it discharged the plaintiff.

Last month, the Supreme Court reversed the Seventh Circuit’s ruling, finding that the plaintiff had in fact met his burden.  The Court specifically noted that the employer was at fault because “one of its agents committed an action based on discriminatory animus that was intended to cause, and in fact did cause, an adverse employment decision.”  It found, therefore, that an employer is liable for USERRA-based discrimination using the cat’s paw theory where:

  • A supervisor performs an act motivated by antimilitary animus;
  • The supervisor intends for that act to cause an adverse employment action; and
  • The act is a proximate cause of the ultimate employment action.

The Supreme Court’s decision seemingly raises the bar for employers hoping to escape liability for employment decisions prompted by discriminatory animus, even when an unbiased decision maker made the final call after an impartial investigation.  Accordingly, employers should endeavor, whenever possible, to carefully investigate all of the facts and circumstances leading up to a supervisor’s request to terminate an employee, and not to take the supervisor’s version of events at face value.


New Complaint Filed on behalf of Lutron Electronics Co., Inc.

On May 16, 2011, Lutron Electric Co. filed a confidential Section 337 Complaint regarding lighting control devices including dimmer switches. The proposed Respondents are: Pass & Seymour, Inc., Syracuse, New York; AH Lighting, Los Angeles, California; American Top Electric Corp., Santa Ana, California; Big Deal Electric Corp., Santa Ana, California; Diode LED, Emeryville, California; Elemental LED, LLC, Emeryville, California; Wenzhou Huir Electric Science & Technology Co. Ltd., China; Westgate Mfg., Inc., Vernon, California; Zhejiang Lux Electric Co. Ltd., China; and Zhejiang Yuelong Mechanical & Electrical Co. Ltd., China.

Online College To Pay $260,000 To Settle EEOC Lawsuit Charging Sex Harassment By Supervisors Online College To Pay $260,000 To Settle EEOC Lawsuit Charging Sex Harassment By Supervisors

Anthem College Online Tolerated a Hostile Workplace, Federal Agency Charged

PHOENIX – High-Tech Institute, Inc., doing business as Anthem College Online, will pay $260,000 as part of a settlement of a sexual harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. In its suit in U.S. District Court for the District of Arizona (Civil Action No.CV-09-2041-ROS), the EEOC charged that Anthem College subjected female employees to repeated sexual harassment by supervisors.

According to the EEOC, six female admissions representatives working at the Phoenix, Ariz., location were frequently sexually harassed by three supervisors. The EEOC’s allegations included that the supervisors engaged in unwanted sexual touching and comments, writing sexually suggestive e-mails and soliciting sex from employees during unwelcome visits to the employees’ homes in the early morning hours. Some of this abusive behavior was witnessed by other Anthem College employees, the EEOC said.

The EEOC maintained that Anthem College knew or should have known about and tolerated this sexually hostile work environment caused by its supervisors. The agency said the company’s former human resource manager wrote that Anthem College employees were fearful to come forward because an alleged harasser was seen drinking and socializing with upper management and that there was blatant disrespect to employees and rampant poor management.

According to the EEOC, the company unreasonably delayed removing a class member from under the supervision of an alleged harasser who, the company’s own former human resources manager testified, was a “psychopath.” The EEOC argued that despite Anthem College’s knowledge about the harassment, the company failed to take reasonable steps to investigate and remedy the harassment.

“Employees who have an official or strong duty to communicate to management are considered part of management,” said EEOC Regional Attorney Mary Jo O’Neill of the Phoenix District Office, which originated the legal action. “Here, there was a breakdown in reporting by persons whose job descriptions required them to report any issues affecting the normal operation of the admissions department, including sexual harassment. They failed to do so, with serious consequences.”

Sexual harassment violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to the settlement requiring Anthem College to pay $260,000 to the former employees, Anthem College also must investigate any further complaints of sexual harassment, provide training for managers and supervisors on conducting sexual harassment investigations and post a notice that harassment of Anthem College’s employees will not be tolerated.

EEOC Phoenix District Director Rayford O. Irvin added, “We insist that companies fulfill their obligation to protect employees from sexual harassment and provide the necessary training to ensure this protection.”

Chief Judge Imposes Privilege Waiver Sanctions Against Defendant for Repeated Discovery Misconduct in DL v. District of Columbia

Chief Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia sent a clear message to litigants last week: repeated discovery violations will not be tolerated and may subject the violator to harsh sanctions, including waiver of privilege. In his May 9 ruling in DL v. District of Columbia,[1] Judge Lamberth denied defendant District of Columbia’s (District’s) request for reconsideration of his April 7, 2011 order, which imposed privilege waiver sanctions with regard to all of the District’s as-yet unproduced email and ordered the District to produce all such email within one week after the close of trial.

The plaintiffs in this Individuals with Disabilities and Education Act (IDEA) case had been waiting almost six years for trial. Beginning on the first day of trial (April 6, 2011), however, the central issue in the case quickly became the District’s failure to timely meet its discovery obligations when the plaintiffs’ counsel informed the court that “document production from the District was still flooding into his office,” including the production of “thousands of e-mails just days before trial.” Indeed, the District intended to “continue to produce thousands of e-mails on a ‘rolling’ basis even after the trial concluded.” As the unproduced e-mails were from more than two years prior, no basis existed for such a lengthy delay in production, especially in a case in which discovery had been closed for more than two years. The court found the District’s explanation for its untimely rolling productions of email (which the District described as the result of a “supplemental search” that had been “ongoing for months”) completely unacceptable. The court especially noted the District’s failure to bring its delayed production to the court’s attention at either the pretrial conference or at any number of pretrial proceedings.

Among the District’s numerous discovery violations, the court highlighted the following:

  • Failure to timely produce relevant documents
  • Violation of multiple discovery orders
  • Failure to timely provide a privilege log
  • Failure to inform the court of any delays in production in order to request appropriate extensions

The court may have been more lenient had the District not requested and been granted an extension of its discovery deadlines from June 27, 2008 until October 14, 2008. The District, despite being recently sanctioned for discovery violations, failed to comply with several discovery milestones ordered by the court, including the submission of a privilege log. In addition, the District’s certification that it had completed its production was not only late, but also inaccurate since the District clearly had not yet completed its production. Furthermore, on September 22, 2010, the district court ordered both parties to supplement their discovery responses and document productions up until the date of the trial, an order that the was also violated by the District.

In its ruling, the court emphasized the District’s failure to (a) alert the court to the delayed production of email and (b) seek an appropriate extension.

“If at any point the District realized that it was behind, or for any other reason could not comply with this Court’s Orders, it should have informed the Court of the problem. . . . It could have said something at any of the multiple status conferences held in this case or at the pretrial conference. Instead, the District failed to produce documents for over two years, violated multiple Court Orders in the process, and instead of informing the Court of the situation at any point along the way, it simply sprung the news on the first day of trial.”

Further, the court stated that, absent entering a default judgment in the case, the order granting privilege waiver sanctions and compelling production of all remaining e-mail within one week of trial was the only realistic alternative. Otherwise, the parties would face extremely burdensome delays and increased litigation time and costs, which would also affect the court’s already overloaded trial docket. The court stated state that the District “should not be surprised that its misconduct has caught up with it.”

This case underscores the importance to companies involved in litigation of diligently complying with all discovery deadlines and promptly bringing to the court’s attention any delays in compliance. Failure to do so may result in severe sanctions, including privilege waivers.

Emergency Transport Company Sued by EEOC For Pregnancy Discrimination

CHARLOTTE, N.C. – A North Carolina ambulance service violated federal law by discriminating against several female employees because they were pregnant, the Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed today.

According to the EEOC’s complaint, SDTM Investments, Inc., doing business as Tarheel Medical Transport, subjected Samantha Holder and other pregnant employees to different terms and conditions of employment from its non-pregnant employees. The complaint alleges that upon learning that an employee was pregnant, Tarheel required the employee to take a leave of absence or be discharged. The EEOC contends that around March 2009, the company refused to let Holder work in her job as an emergency medical technician and discharged her because she was pregnant.

Several months after Tarheel discharged Holder, EEOC alleges that the company also forced office manager and emergency medical technician Christina Berdan to take medical leave from her job. Tarheel informed Berdan that she could not return to work until after the birth of her child in spite of the fact that Berdan was physically fit, had no medical restrictions and could fully perform the duties of her job. As a result of this practice, Holder, Berdan and other pregnant employees were either terminated or forced to take a leave of absence despite the fact that they were fully capable of performing their job duties.

Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act, prohibits employers from discriminating against pregnant employees. The EEOC seeks back pay, compensatory damages and punitive damages for Holder and the other affected employees, as well as injunctive relief. The EEOC filed suit in U.S. District Court for the Eastern District of North Carolina (Equal Employment Opportunity Commission v. SDTM Investments, Inc. d/b/a Tarheel Medical Transport, Civil Action No. 4:11-CV-00080) after first attempting to reach a pre-litigation settlement through its conciliation process.

“Working women who chose to have children cannot be penalized or treated differently from other employees simply because they are pregnant,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office. “Employers must remember that paternalistic attitudes toward pregnant employees can result in unequal treatment at work, which violates federal law.”

SDTM Investments, Inc. doing business as Tarheel Medical Transport, operates an ambulance service in Beaufort, Wilson and Craven counties in North Carolina, transporting non-emergency patients from their care facilities or homes to medical appointments. It employs approximately 40 people.

US District Court Upholds OSHA Subpoena in Grain Engulfment Case

CHICAGO — A U.S. district court has upheld a subpoena issued by the U.S. Department of Labor‘s Occupational Safety and Health Administration requesting documents from Grinnell Mutual Reinsurance Co. concerning inspections and reports the company prepared for Haasbach LLC. Two teenage workers were killed in a grain engulfment at Haasbach’s Mount Carroll, Ill., site in July 2010.

Grinnell contended that the subpoena would discourage businesses from allowing insurers to conduct safety inspections if the material contained in the inspection reports can be used against a business during later litigation or OSHA enforcement proceedings. The court ordered that the records be given to OSHA.

OSHA Assistant Secretary Dr. David Michaels praised the decision.

“The court affirmed OSHA’s authority to obtain relevant information from an employer’s workers’ compensation insurance company. This is not surprising legally, but it does illustrate that workers’ compensation and OSHA are not separate worlds divorced from each other,” he said. “Workers’ compensation loss control activities overlap with OSHA’s efforts to bring about safe and healthful workplaces, and in order to achieve a safe and healthful working environment for all Americans, all efforts of business, insurance, labor and government must move forward together.”

The court ruled that OSHA has jurisdiction to investigate the workplace fatalities, and further has the authority to require the production of relevant evidence and the ability to issue a subpoena to obtain that evidence. The requested documents, which included copies of site safety inspections, applications for insurance coverage for the site, and correspondence between Grinnell and Haasbach concerning the site, were found to “reasonably relate to the investigation of the incident and the question of OSHA jurisdiction,” according to the decision.

Haasbach was issued 25 citations by OSHA with a penalty of $555,000 following an investigation into the deaths of the two teenage workers at the company’s grain elevator in Mount Carroll. A 20-year-old man also was seriously injured in the July 2010 incident when all three became entrapped in corn more than 30 feet deep. At the time of the incident, the workers were “walking down the corn” to make it flow while machinery used for evacuating the grain was running.

OSHA’s Region V, which includes Illinois, Ohio and Wisconsin, initiated a Grain Safety Local Emphasis Program in August 2010, and has since conducted 61 inspections and cited grain operators/facilities for 163 violations. The violations cover hazards associated with grain engulfment, machine guarding, electricity, falls, employee training, combustible dust and lockout/tagout of energy sources on potentially dangerous equipment.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education and assistance.