Companies Get the Liability for Supervisors Decisions

by Michael Haberman on June 29, 2011 · 3 comments

If you have been around business for any period of time, and around HR in particular, you know that most of the employment based lawsuits companies get are based on the actions and decisions of superviors. The doctrine of vicarious liability, also known as respondeat superior, means employers get the liablity for the decisions of their supervisors in matters such as discrimination, sexual harassment, etc. Often, however, companies could escape some liability if the supervisor acted contrary to company policy or if they were not the decsion maker and the action taken was done by someone without the biases they supervisor may have.

A decision by the US Supreme Court in early March however has no provided employers with another layer of concern. In the case of Staub v. Procter Hospital the Supreme Court applied what is referred to as “the Cat’s Paw Theory of Liability”. (As a quick aside, the Cat’s Paw term comes from a fable in which a monkey, who was wanting to eat some roasting chestnuts, convinces a cat to use its paw to draw the chestnuts from the fire. As the cat does this the monkey goobles them up leaving the cat with nothing but singed paws and an empty stomach. The term has come to mean “dupe” or “pawn”.)

I am going to quickly summarize the case. A technican named Staub was a member of the National Guard. This required working occasional weekends in the guard and his two week summer camp. His boss, and her boss, did not like the fact that he was in the guard. They were vocal about it and they scheduled his work at the hospital to conflict with the guard duty. This caused him problems for which he was disciplined. They put burdensome requirements on him as far as reporting his whereabouts. One day his boss was not in the office so he could not report that he was going to lunch. He went anyway after having left the boss a voice mail stating where he was. In his absence the boss went to the VP of HR, reported him, said it was the last straw. The VP, based on their complaints of poor performance, made the decision to fire him. When Staub returned from lunch his boss marched him to HR where he was dismissed. Naturally he was upset and filed a claim of discrimination based on his USERRA rights. The original court decision sided with the company saying that the HR VP did not have any problem with his military service and since she was the one to make the decision his USERRA claims were unfounded. That was overturned and eventually made its way to the Supreme Court. They found that the two supervisors did have a problem with his military service and that was the source of all his problems. They basically “duped” the VP of HR into firing him for attendance and performance when in reality it was his military service. They used the VP as a “cat’s paw” to do their dirty work. The US Supreme Court found the company liable under this doctrine.  (To read a much better explanation of this see the Fisher & Phillips legal alert.)

This decision by the US Supreme Court adds another layer of liability that companies will be held accountable for in the actions of their supervisors. Although this case dealt with a bias against military service it holds true for biases against any protected category.  As the folks at Fisher & Phillips say “..the decision makes it clear that if the biased motives of a subordinate
supervisor influenced the chain of events that led to the adverse employment action, the employer may be liable for discrimination, even if the ultimate decision maker had no discriminatory intent.”

To correct this companies need to take the following steps:

  1. Document, document, document any performance issue.
  2. Investigate. In conducting terminations, don’t just rely on personnel files and the word of the supervior. Conduct an independent investigation of the circumstances. Make sure to get the employee’s side of things. This to me was the major mistake the VP of HR made in the decision she rendered.
  3. Make sure there is a legitimate, non-discriminatory, work-related reason the person is being terminated.
  4. Work swiftly. Problems allowed to fester become BIG problems.

Following this advice may help keep you out of trouble.

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