March 4, 2011
Sullivan on Faithless Servants
Charlie Sullivan (Seton Hall) has just posted on SSRN his article Mastering the Faithless Servant?: Reconciling Employment Law, Contract Law, and Fiduciary Duty. He argues thatthe doctrine should not apply to lower-level employees, and that it should be cabined as to upper-level employees. His article is particularly timely now that the American Law Institute is considering the doctrine should be part of the new Restatement on Employment Law.
Here's the abstract:
The quaintly-named “faithless servant” doctrine requires employees subject to it not merely to pay damages for their derelictions but also to disgorge the compensation paid during the period of his faithlessness and without any right to recover in quantum meruit for the value the employee may have provided during that time. The net result is that an employer can recover substantial amounts of compensation paid and otherwise due without proof that it suffered any damage whatsoever and, indeed, even if it is established that there were no such damages.
Such a result is startling to those who approach the question from the perspective of contract law, which normally would limit the victim of a breach to expectation damages. While those who come to the doctrine from the perspective of an agent’s fiduciary duty will not be surprised by the remedies for breach of the “duty of loyalty,” they will be startled by how broadly the doctrine sweeps. In some jurisdictions it not only reaches all employees, but the automatic forfeiture remedy is more draconian than trust law requires of the quintessential faithless fiduciary, the faithless trustee.
Further, while the doctrine has typically been invoked against higher-level employees, it has more recently been deployed defensively in response to lower-level employee suits for violations of antidiscrimination statutes and wage/hour laws. The natural consequence has been to up the ante for such plaintiffs, which seems likely to discourage their suits.
The question of the appropriateness of enhanced remedies for some or all “faithless” employees takes place in an environment in which abuses by corporate executives are front and center in public policy debates. At the very least, however, one might anticipate that the reach of the “faithless servant” doctrine would be well-defined and its harsh consequences well-justified. Neither turns out to be true.
Nor could a reconsideration of the question be timelier. In its current Restatement of Employment Law project, the American Law Institute will focus on whether the doctrine should be part of the employer’s arsenal of remedies for misconduct in the employment relationship. This will compel it to decide whether to accept, reject, or modify the Institute’s approval of the faithless servant rule in its earlier Restatements of Agency. Arguing that “employees” are different from other agents, this Article contends that at the least the doctrine should be inapplicable to lower-level workers and suggests reframing it even as applied to “key” employees.
Secunda on Psychologocal Realism
Facts matter, especially in labor and employment law cases. But not in the way that labor scholars of a generation ago understood. Those scholars correctly posited that judicial perception of facts reflected previously-held values and assumptions rather than record evidence. Yet crucially, those scholars did not describe the psychological mechanism by which judges’ values came to shape facts in labor and employment law cases. Understanding the psychological mechanism by which judicial values shape legal decisions is a necessary first step to set up a framework to counteract the impact of cognitive illiberalism, a form of cognitive bias that impacts society writ large, in such decisions.
Psychological realism in labor and employment law explains that judges in these cases are generally not self-conscious partisans but rather decisionmakers who seek most of the time to get the law right without being ideologically committed to any prior legal or political view. Yet, values matter because judges, as human beings, cannot help but to act based on their culturally-informed perceptions of legally consequential facts.
By understanding the mechanism by which values influence decisionmakers in labor and employment law cases, it is possible to consider ways to reduce needless cultural conflict over, and discontent with, the law. To this end, this article considers a spectrum of judicial reform proposals which seek to help judges address the increasing complexity of labor and employment law cases in a manner which would also reduce the incidents of impact of cognitive illiberalism in American society.
February Employment Data
The Department of Labor has just released its employment report for February and the numbers are looking pretty good (relatively speaking, at least). Employment increased by 192,000 last month, bringing the unemployment rate down a bit to 8.9%. Many of the new jobs came from the manufacturing, construction, and service industries. Government continued to lose jobs.
Perhaps the best part of this report is the 192,000 figure. That's a bit more jobs than most economists say is needed to keep up with a rising number of working-age people in the country. That is, this report, and hopefully the ones after, may be turning the corner to a situation when we're not just treading water, but actually getting back some of the huge job losses we saw in the recession.
Local Wage Data for Lawyers
March 3, 2011
The Decertification Strategy for NFLPA
With recent word out that the NFL and players union (NLFPA) have agreed to a 24-hour extension of their expiring collective-bargaining agreement to allow for more negotiations, it's worth thinking about what might happen if the negotiations fail. The New York Times has a piece that explores one possible outcome--the union decertifies itself. It's a strategy with risks to both sides. But the fact that the players are seriously considering is one illustration of why the more powerful athlete unions are in an entirely different class than most unions. It also provides a good example of how labor and antitrust laws intersect. For the article:
If the union decertifies, owners will face a decision. They could impose their own rules that would allow the games to continue, a decision likely to expose the league to a series of antitrust lawsuits brought by players that would attack the underpinnings of the current game: the salary cap, the franchise tag that restricts movement of some free agents, and even the validity of some player contracts.
It is an unusual, and risky, maneuver for the union. Players would lose benefits and, at least for a little while, a say in how the league is run. But it already has received the necessary votes from players. A decision to dissolve could come by Thursday, hours before the current labor deal expires. . . .
This time around, the owners seem unlikely to let the games be played because they view them as essentially funding players’ lawsuits — the players would be earning a paycheck while the suits worked their way through the courts. Owners consider that one of the fundamental mistakes they made the last time the union dissolved. . . . Still, the ramifications of decertification worry N.F.L. owners enough that they are in an odd position for management — they want the union to remain intact and they will claim that decertification is a sham. . . .
Last month, the N.F.L. filed a complaint to the National Labor Relations Board claiming that the union was failing to negotiate in good faith because it was planning to decertify. The N.F.L. said that the union is engaging in “surface bargaining” and tactics designed to avoid reaching an agreement before the collective bargaining agreement expires so it can file antitrust litigation against the league to try to block a lockout. . . . The N.L.R.B. has not yet ruled on the N.F.L.’s complaint. That leaves the owners likely to lock out players when the current deal expires, even if the union decertifies before then, essentially shutting down the league.
UPDATE: NPR has a recent story on NFL decertification that's particularly good in introducing the issue to non-experts.
NLRB Responds to House Committee
As we noted earlier,the House Subcommittee on Health, Employment, Labor, and Pensions held a hearing on “Emerging Trends at the National Labor Relations Board," but didn't invite anyone from the Board to testify. Given the attacks on recent Board moves, including new remedial policies by acting GC Lafe Solomon (who has been nominated for the permanent position), both Chairwoman Liebman and Solomon have submitted letters to the subcommittee in response. Liebman's letter is here; Solomon's is here.
Hat Tip: Patrick Kavanagh
Sign Up for NLRB Updates
The NLRB has just instituted a service to keep up to date on recent Board developments. By signing up you can chose to receive e-mail notifications of recent press releases, announcements, decisions, GC memos, briefs, and much more. Basically, everything an NLRB junkie could wish for.
You can sign up for it here.
Hat Tip: Patrick Kavanagh
Almeida on Non-Defense of DOMA and ENDA
Tico Almeida, currently at Sanford Wittels & Heisler LLP and formerly lead counsel on the proposed Employment Non-Discrimination Act (ENDA) on the labor committee in the U.S. House of Representatives, has an interesting post at the Bilerico Project on one of the effects of the recent announcement by AG Holder that the DOJ won't be defending section 3 of the Defense of Marriage Act in court. He predicts that the statement will have a domino effect, making passage of ENDA more likely and making the statute more likely to withstand a likely Eleventh Amendment challenge that would follow.
As he says,
[t]hat's because of the following key portion of the announcement by U.S. Attorney General Holder: "After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a heightened standard of scrutiny."
Quite simply, this statement is historic. It is the first time ever that the government of the United States has embraced this pro-equality position. If President Obama's DOJ can successfully convince the federal courts that statutes, regulations or government practices that address or affect sexual orientation should be given what is called "heightened scrutiny," then gays and lesbians would be raised up to the at least the same level of constitutional protection already granted to women facing discrimination.
From there, Almeida essentially says that the statement also makes it more likely that Congress will pass ENDA because it demonstrates a broader expression of political will at the federal level than has been made before. He continues,
Now imagine that the U.S. Supreme Court eventually agrees with President Obama and Attorney General Holder that gays and lesbians deserve "heightened scrutiny." At that point, [lesbian, gay, and bisexual state employees] have a far greater chance of successfully arguing in federal court that the discrimination by their employers . . . was a violation of the Equal Protection Clause of the 14th Amendment of the U.S. Constitution.
And here's where the analysis gets particularly interesting from a federal courts geek (and by that I mean me) perspective. If sexual orientation and identity get heightened scrutiny--and Almeida correctly notes that the trend for identity right now already is to get heightened scrutiny because it's part of "sex"--then Congress has greater power under the Fourteenth Amendment to legislate in ways that prohibit discrimination on those bases. And the Fourteenth Amendment provides power for Congress to abrogate state Eleventh Amendment immunity, subjecting unconsenting states to suits for damages in court. It's much easier to show that a statute which relates to something that gets heightened scrutiny, a protected class or engaging in an act that is a fundamental right, is a valid enactment under the Fourteenth amendment.
This happens in two ways. First, increasing the level of scrutiny enlarges the Fourteenth amendment itself to prohibit more conduct. The greater the scrutiny, the more likely that a government action that injures someone will be seen itself as a constitutional violation. Actions taken because the person is a member of this class or because the person exercised a fundamental right are presumptively invalid. And a statute that prohibits actual Fourteenth Amendment violations is clearly a valid enactment under the Fourteenth amendment, and the Eleventh Amendment will be no bar.
Second, Congress can, under the Fourteenth Amendment, also reach government conduct which itself might not violate that amendment if Congress has documented enough of a pattern of unconstitutional discrimination by the states and the statutory prohibition is, essentially, a reasonable way to deter constitutional violations. Here, the Court has talked about how prohibiting disparate impact in Title VII is reasonably calculated to help deter disparate treatment by either getting at sneaky and difficult to prove disparate treatment or by forcing employers to put procedures in place that look out for discrimination that might pass under the radar otherwise. Where heightened scrutiny is applied to the thing protected, Congress needs much less of a record to support that prophylactic remedy. This was the lesson from Nevada Dep't of Human Resources v. Hibbs, which upheld the FMLA against an Eleventh Amendment attack.
I think this analysis is right on. I actually have been using ENDA on my federal courts final exam as some sort of Eleventh Amendment problem as long as I've been teaching. The greatest weakness seems to be that it all hinges on the Court agreeing with the administration's statement that heightened scrutiny applies. There is relatively recent precedent for this occurring, though. Papers that came to light during the confirmation process for Chief Justice Roberts showed to some extent that as an acting Solicitor General, he helped persuade the Supreme Court that race based affirmative action violated the constitution in a case in which the office refused to defend the FCC's use of race based affirmative action, which Congress had urged it to adopt.
March 2, 2011
Secunda on Multiemployer Benefit Plans
Paul Secunda (Marquette), in-between press gigs on the Wisconsin public-sector union crisis, has just posted on SSRN his timely article The Forgotten Employee Benefit Crisis: Has the Moment of Truth Arrived for Multiemployer Benefit Plans?. Here's the abstract:
This article provides a first time look at the numerous challenges that face Taft-Hartley or multiemployer benefit plans in the post-global recession and post-health care reform world in which we now live. These plans provide health, welfare, and pension benefits to union members. The article seeks to offer some internal, legislative, administrative, and judicial reforms with which to overcome the financial, legislative, and judicial challenges that these plans now face.
The outlook today no doubt looks bleak, but this article seeks to shine the light on how various structural and substantive plan reforms may help Taft-Hartley plans survive these difficult times. Although the pain of the present is not pleasant for Taft-Hartley plans nor for the employees whose retirement, health, and other welfare plan interests they represent, the hope is that through this necessary recalibration and restructuring multiemployer benefit plans will become stronger, with more secure participants and beneficiaries in the near future.
Memorial Service to Honor and Remember Clyde Summers
Alvin Goldman (Kentucky) sends word of a wonderful event being held at the University of Pennsylvania Law School to commemorate and honor the life of labor and employment law scholar and legend, Clyde Summers, who past away last year.
Following the formal remarks at this event, there will be an opportunity for attendees to share their memories. A reception will follow.
The ceremony will take place on April 16, 2011 at 2:00 PM at the Levy Conference Center on Penn's Campus in Philadelphia. Here is the obituary for Clyde on the Penn Law website.
Leonard on 7th Circuit Ruling That US Court Has Jurisdiction to Hear Employment Discrimination Case Involving French Lesbian Flight Attendant
Thanks to Arthur Leonard (New York Law) for letting us cross-post this blog post on this interesting case out of the 7th Circuit Court of Appeals involving issues of jurisdiction, extraterritoriality, and employment discrimination law.
Here's the post from the Leonard Link Blog (a blog you should certainly add to your blog readers):
Feeling its way through an interesting jurisdictional and procedural thicket, a panel of the U.S. Court of Appeals for the 7th Circuit ruled yesterday in Rabé v. United Air Lines, Inc., 2011 WL 677946 (Feb. 28, 2011), that U.S. District Judge Rebecca R. Pallmeyer (N.D.Ill.) erred when she dismissed on jurisdictional grounds an employment discrimination suit brought by a French national who had been employed by United Air Lines as a foreign-based flight attendant. The plaintiff, a lesbian who was discharged after reaching age 40, claimed discrimination on the basis of national origin, age, and sexual orientation, in violation of, respectively, Title VII of the Civil Rights Act of 1964 (national origin), the Age Discrimination in Employment Act (ADEA) (age), and the Illinois Human Rights Act (sexual orientation). Her suit in federal district court was premised on diversity of citizenship (which includes suits between foreign nationals and U.S. corporations), and venue premised on United's corporate headquarters being in Chicago.
United argued that the federal court lacked jurisdiction, because as a non-resident of the United States, the plaintiff was not protected from discrimination under these U.S. and state statutes.
According to the opinion for the court by Circuit Judge Hamilton, "United hired [plaintiff Laurence] Rabé in November 1993 to work in France out of the company's Paris hub. She signed an individual employment contract at United's headquarters in Chicago, Illinois. The contract specified that her work would 'be performed on board United's aircraft registered in the USA as they operate on routes throughout the Company's worldwide system,' and that the aircraft would 'constitute the establishment where' she performed her employment. The individual contract also required Rabé to join the Association of Flight Attendants, the American labor union that represents United flight attendants." The contract specifically provided that the terms of her employment would "be governed exclusively by applicable United States law, including the Railway Labor Act and the [collective bargaining] agreement," and that jurisdiction "over all employment-related claims" would be exclusively in the courts of the US and Illinois. The contract required that Rabé execute a handwritten note acknowledging her acception of the choice of law and jurisdictional provisions.
She was transferred to United's Hong Kong base in 1997, and claims that 90 percent of her flights were to or from the US. After a brief period away from United on furlough beginning in 2002, she returned subject to the same contract terms in 2005, based in Hong Kong and working flights between Asian destinations. She was fired in April 2008, after she turned 40, ostensibly for misusing travel vouchers, which charge she claimed was a pretext for discrimination. She alleged that the supervisor who initiated the investigation leading to her discharge had made anti-gay statements in her presence and insinuated his belief that she was a lesbian.
The circuit court rejected the district court's reasoning that as a non-resident Rabé was not covered by US discrimination laws and so could not sue in US courts, finding that the cited statutes would apply to this case because of the contract choice of law terms, and that there was no jurisdictional question here because jurisdiction in the case was premised on diversity, not on federal question jurisdiction. Thus, the discrimination claims were actionable in federal court because the contract between Rabé and United made them actionable as terms of the contract, not because of any application on their own as statutes.
Much of the evidence offered in litigating the dismissal motion related to the question of how often her work for United took her within the territory of the US, since United's theory of the case was that she could only claim to be covered by these statutes when she was in the US. Under the court of appeals' theory of the case, that was irrelevant.
"Under United's theory," wrote Judge Hamilton, "Rabé would not be protected by the employment discrimination laws of any country. We understand the impulse to make an explicit choice of law in a contract when the parties' international relationship could result in prolonged and expensive arguments about choice of law in the event of a dispute. That is as true for employment contracts as it is for sophisticated business-to-business contracts. But we see no reason to interpret a contractual choice-of-law provision as effectively excluding the employee from the protection of public laws and policies as fundamental as those embodied in employment discrimination laws."
The court cited for support the Restatement (Second) of Conflict of Laws § 187(3), and its prior ruling in Peters v. Gilead Sciences, Inc., 533 F.3d 594 (7th Cir. 1008), holding an employer to its promise to extend to an employee the coverage of an employment discrimination law even though a statutory exception would have excluded the employee from coverage. Said the court, "For our purposes in this case, the key point of the Peters decision is that an employer may agree by contract to extend statutory legal protections to an employee who might not be covered by the statute itself." Since subject matter jurisdiction was premised on diversity rather than federal question jurisdiction, it was irrelevant that Rabé was not "covered" as such by US laws as a non-resident employee of United, at least as far as the district court's jurisdiction to hear the case went.
The circuit court also rejected United's argument that the discrimination claims were preempted by the Railway Labor Act (the federal statute governing collective bargaining in the airlines as well as railroads), finding that her contract specifically provides that any claims would be determined by reference to federal or state law, not by reference to the collective bargaining agreement.
The bottom line: A remand to the district court "for further proceedings on the merits of Rabé's Title VII, ADEA, and Illinois Human Rights Act claims, recharacterized as claims for breach of contract and/or promissory estoppel."
Interestingly, as Art points out, the court's opinion lists Ms.Rabé as representing herself pro se, while United is represented by national employment law powerhouse Seyfarth Shaw LLP (attorney Gary S. Kaplan). Art concludes: "So the flight attendant outgunned the big national law firm - with a little help from the court, one presumes."
Malin on Chicago TV on Importance of Public Sector Collective Bargaining
Congratulations to Marty Malin (Chicago-Kent) who performed eloquently and knowledgeably in discussing the current Wisconsin labor dispute on local Chicago television. You can access the clip of Marty here.
I think you will agree with me that Marty is a natural and may be ready for a full-time career as a "talking head."
Inaugural Issue of the American University Labor & Employment Law Forum
Susan Carle (American) brings us exciting news about the inaugural issue of the American University Law School's Labor & Employment Law Forum, and the first issue is filled with interesting and timely articles.
Here is a listing:
Labor & Employment Law Forum
Vol.1, No. 1, Winter, 2011
Labor Contract Formation, Tenuous Torts, and the Realpolitik of Justice Sotomayor on the 50th Anniversary of the Steelworkers Trilogy: Granite Rock v. Teamsters, David L. Gregory, Rowan Foley Reynolds & Nadav Zamir
Private Ordering of Employee Privacy: Protecting Employees’ Expectations of Privacy with Implied-in-Fact Contract Rights, Lindsay Noyce
When One Board Reverses Another: A Chief Counsel’s Perspective, Harold J. Datz
Can Card-Check Be Unilaterally Imposed by the NLRB?, Halima Woodhead
Introduction to International Mediation and Arbitration: Resolving Labor Disputes in the United States & the European Union, May Olivia Silverstein
Don’t Ask, Don’t Tell: Beyond the Log Cabin Republicans Injunction and the Defense Authorization Act
Congratulations to everyone on this fine accomplishment. To view this issue, go to http://digitalcommons.wcl.american.edu/lelb/. To subscribe digitally, please e-mail firstname.lastname@example.org.
Recently Published Scholarship
- Michael Zimmer, Ricci's Color-Blind Standard in a Race Conscious Society: A Case of Unintended Consequences?, 2010 BYU L. Rev. 1276.
- Matthew Webster, "Jobs Americans Won't Do": Our Farming Heritage, Hazardous Harvests, and a Legislative Fix, 29 Law & Inequality 249 (2011).
- Bryan M. O'Keefe, The Employee Free Choice Act's Interest Arbitration Provision: In Whose Best Interest?, 115 Penn St. L. Rev. 211 (2010).
- Lauren A. Heischmidt, Do Verbal Complaints Constitute Protected Activity Under the Fairl Labor Standards Act?, 35 Southern Illinois U. L.J. 203 (2010).
- Lauren N. Fromme, Unreliable Securities for Retirement Income Security: Certifying the ERISA Stop-Drop Class, 64 Vanderbilt L. Rev. 301 (2011).
March 1, 2011
Profs' Amicus Brief Filed in Wal-Mart v. Dukes
In more SCOTUS news, the briefing is almost finished as we head towards the oral argument at the end of the month for Wal-Mart v. Dukes, the class action sex discrimination case. And today, a group of 31 law professors filed an amicus brief in support of the plaintiffs. Melissa Hart (Colorado) is the counsel of record, and Alexandra Lahav (Connecticut), Arthur R. Miller (NYU), Paul M. Secunda (Marquette), and Adam Steinman (Seton Hall) also pitched in. Twenty-six more professors who teach civ. pro., employment discrimination, and related classes also signed on, including me.
Here's the summary of the argument:
The class action device is essential to a well-functioning system of justice because of its ability to balance the values of access to the courts and efficient adjudication of disputes. This was the vision of the drafters of Federal Rule of Civil Procedure 23. This Court can and should interpret Rule 23's text in a way that vindicates these overarching goals.
Particularly in an adjudicative class action, the certification motion needs to be understood as a preliminary step that is complimented by motions to dismiss and summary judgment motions. The aim of class certification is not to screen out suits that fail even to allege a claim for relief (that is for motions to dismiss), nor to issue dispositive rulings on the merits (that is the purpose of summary judgment or trial). Instead, it is to determine whether the purposes of the class action rule would be served by proceeding with a collective litigation.
The district court did not abuse its discretion in concluding that the proposed class met the requirements of Rule 23(a). In fact, the court’s attention to the detailed pleadings and the extensive evidence gathered by the parties in assessing whether the named plaintiffs’ claims shared common questions of law or fact with claims of absent class members showed a level of rigorous evaluation that went beyond the 23(a) threshold. Classification of the class under 23(b)(2) was also appropriate under the Federal Rules. Petitioner’s contrary arguments ignore the text, purpose and history of Rule 23.
I'm sure the brief will be available shortly in Scotusblog's case file. In the meantime, you can see the merits briefs and all of the amici in support of Wal-Mart. From my brief count, if the number of amici in support of respondents mirrors the number in support of petitioners, there will likely be near thirty total. That number and amount of activity speaks volumes to the stakes of this case as a cultural matter.
Update -- here's a pdf version of the brief: Download Civil procedure professors amicus brief
Milwaukee City Atty Letter Explaining Why Walker's Budget Bill Unlawfully Violates Public Employee Pension Rights
Update (3/2): I add my two cents on the unconstitutionality of the proposed legislation in today's Milwaukee Journal Sentinel.
For those of you who are interested in the public sector labor law side of the Wisconsin Budget Repair Bill controversy, this letter from Milwaukee City Attorney Grant Langley on why the Bill's pension provisions violate various federal and state constitutional and statutory provisions is a must-read.
In short, because of Milwaukee's status as the only "city of the first class" under Wisconsin law, it is has additional provisions that apply to it as far as pensions are concerned as a result of its Home Rule Charter, various Wisconsin statutory provisions, and because of past litigation settlements involving the pension retirement system for public employees in Milwaukee.
There are four bases for why Governor Walker's Bill should be unlawful with regard to the Milwaukee pension system: (1) violation of Milwaukee's Home Rule Charter; (2) unlawfully depriving public employees of vested contractual rights under state law; (3) federal and state constitutional claims sounding in unlawful impairment of contracts by the government; and (4) procedural due process claims under federal and state constitutional law for interfering with public employees' property ineterests.
It is a long letter, but it is a rare look inside the complexities of public sector pension law.
Plaintiff Wins USERRA Cat's Paw Case in U.S. Supreme Court Under "Motivating" Factor Standard
March is off to a good start, at least for people who root for worker rights at the U.S. Supreme Court. Yet, as explained below, the finding of Cat's Paw theory liability in this case might not extend to other employment discrimination statutes that do not use the motivating factor test as part of the mixed-motive analysis.
In any event, the Court today decided Staub v. Proctor Hospital, 09-400 (U.S. Mar. 1, 2011). Here are the facts from the Court's syllabus:
While employed as an angiography technician by respondent ProctorHospital, petitioner Staub was a member of the United States ArmyReserve. Both his immediate supervisor (Mulally) and Mulally’s supervisor (Korenchuk) were hostile to his military obligations. Mulally gave Staub disciplinary warning which included a directive requiring Staub to report to her or Korenchuk when his cases were completed. After receiving a report from Korenchuk that Staub had violated the Corrective Action, Proctor’s vice president of human resources (Buck) reviewed Staub’s personnel file and decided to fire him. Staub filed a grievance, claiming that Mulally had fabricatedthe allegation underlying the warning out of hostility toward hismilitary obligations, but Buck adhered to her decision. Staub sued Proctor under the Uniformed Services Employment and Reemploy-ment Rights Act of 1994 (USERRA), which forbids an employer todeny “employment, reemployment, retention in employment, promo-tion, or any benefit of employment” based on a person’s “membership”in or “obligation to perform service in a uniformed service,” 38 U. S. C. §4311(a), and provides that liability is established “if theperson’s membership . . . is a motivating factor in the employer’s action,” §4311(c).
He contended not that Buck was motivated by hostility to his military obligations, but that Mulally and Korenchuk were, and that their actions influenced Buck’s decision. A jury found Proctor liable and awarded Staub damages, but the Seventh Circuit re-versed, holding that Proctor was entitled to judgment as a matter oflaw because the decisionmaker had relied on more than Mulally’s and Korenchuk’s advice in making her decision.
The Supreme Court reversed the 7th Circuit in a decision by Justice Scalia (6-0-2), with Justices Alito and Thomas concurring and Justice Kagan not participating. The basic holding is: "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."
Proctor errs in contendingthat an employer is not liable unless the de facto decisionmaker is motivated by discriminatory animus. So long as the earlier agent in-tended, for discriminatory reasons, that the adverse action occur, he has the scienter required for USERRA liability. Moreover, it is axio-matic under tort law that the decisionmaker’s exercise of judgmentdoes not prevent the earlier agent’s action from being the proximatecause of the harm.
Justices Alito and Thomas concurred in the judgment, but would have overturned the Seventh Circuit decision "based on the statutory text, rather than principles of agency and tort law that do not speak directly to the question presented here."
The hope is that this decision extends to Title VII and other statutes with similar language, but the Court was construing what a "motivating factor" is, and, for instance, the recent Gross ADEA case says that a different standard of causation applies in ADEA cases where mixed-motived is not an option.
So, good decision today, but I do not think this is the last word on the Cat's Paw theory in employment discrimination cases.
February 28, 2011
The Legal Ethics Blog has a post (a re-post of an ABA Journal story) related to an employee's termination following some inflammatory Tweeting. A Deputy Attorney General in Indiana--conversing with a Mother Jones reporter--apparently Tweeted that police in Wisconsin should "use live ammunition" again demonstrators, who he considered "political enemies" and "thugs." He also said "damned right I advocate deadly force." The AG's office subsequently fired the attorney for a failure to maintain civility.
The Legal Ethics Blog has a good discussion on some of the free speech issues, particularly with regard to the limits on claims by public attorneys. The take: the law's a mess in this area
White House to NLRB: Cool the Rhetoric
Following the House's proposed budget, the NLRB released a statement warning that the bill's $50 million cut would require a three-month shut down of the agency (although, as we noted earlier, many members consider that a good thing). This attempt to warn of decreased efficiency mirrors a Democratic representative's warning that the cuts would threaten the Board's ability to resolve a possible NFL work stoppage. Apparently, the White House wasn't happy, as the NLRB has since taken the statement off of its website (subscription required).
Hat Tip: Patrick Kavanagh