Thursday, March 17, 2011

From Cats Paw to Proximate Cause: A Short Trip?

New Image I seem to be in the habit lately of looking for the downside of generally good news. This time it's Staub v. Proctor Hospital which has generally been viewed as plaintiff-friendly. I don't doubt that's true, but think there's another side to the opinion. Which there usually is when Justice Scalia is the author!

Although Staubitself involved the USERRA, it was obviously written with Title VII in mind, and the scenario in that context can be reduced to simple formulation. The employing entitly (E) has three relevant actors: A (plaintiff), B (A's supervisor or co-worker) and C, the person whom A has delegated decision making power.

B then makes a negative report to C about A, and the report would not have been made but for A's race. (I use "report" to include a negative evaluation if B is A's supervisor or just ratting out A's supposed misconduct, which could occur  whether B is a supervisor or just a coworker). C, acting on B's report, takes an adverse employment action against A.. C has no discriminatory intent at all, and might not even know A's race.

From a but-for causation perspective, B has caused the adverse employment action. And that is true regardless of whether C conducts what might be called an "independent investigation." After all, even if C confirms everything that B said, the issue might not have come to C's attention but for B's report. 

What does Staub say about this scenario.  

First, nothing if B is a co-worker -- the Court doesn't reach that question.  See note 4.

Second, even as to supervisors, the report must be either within the scope of employment or imputed to E under normal agency principles, see note 4 again, although this would seem to usually be true in these situations. 

Third, Staub clearly rejects E's automatic liability in this situation -- but-for causation is not enough.

Fourth, B, who acted from discriminatory motives, must have intended the adverse employment action that follows from his report. The Court italicized "intended." This strongly suggests that showing a wrongfully motivated negative evaluation by B  is not enough for liability.  If B merely intended to cause spoil A's day by a negative evaluation, but C acted on the evaluation a year or two later when layoffs were imminent, no liability.

Fifth, even proof that B intended his report to get A fired and that A was in fact fired isn't enough. B's report has to be the proximate cause. This is where the Scalia opinion seems to open up the possibility of Staub being not so plaintiff-friendly after all. 

Sixth, along these lines, the last sentence of footnote 4 which the question of whether the employer would have an affirmative defense had the plaintiff not invoked the defendant's internal grievance process. The potential for pouring plantiffs out of court for failure to pursue internal remedies seems obvious (one might wonder whether arbitration counts). But there might be a risk-management lesson here for employer's attorneys, too: have a generalized grievance process for discharges. 

Eighth, there's still the question of whether C can purge E of the taint of B's discrimatory motivation but still fire A. This takes us to the "independent investigation" that several circuits approved of as cleansing a decision of any taint. Alito's concurrence would formally adopt such an approach, but Scalia's majority opinion does not -- at least explicitly. But his notion of proximate cause seems to entail some version of it. Thus, the Court writes "we do not think that the ultimate decisionmaker's exercise of judgment automaticallyrenders the link to [B's] bias 'remote' or 'purely contingent.'" (my italics). That suggests that C's "exercise of judgment" sometimes breaks the link.

And the opinion then goes on: "if the employer's investigation results in an adverse action for reasons unrelated to [B''s[ original biased action . . . then the employer will not be liable." In other words (I think), if the investigation is truly independent, it will cut the chain of causation. By truly independent, Scalia means when "the adverse action was, apart from the supervisor's recommendation" entirely justified.

But, for me, this passage raises a troubling question. Suppose A's supervisor, B, reports to C that A is repeatedly late and does so from a discriminatory motivation hoping that his report will result in A being fired. C, suspecting that B is acting from animus (or maybe just out of an abundance of caution), reviews A's attendance records and determines that A was in fact repeatedly late. C fires A.

This would seem to satisfy the Court as to E's not being responsible: B's report was the cause-in-fact but not the proximate cause of the discharge since C's entirely independent investigation broke the (proximately) causal chain. 

Or did it? What if D, a white employee, was as late as A and is not discharged? In other words, to avoid liability for B's conduct does C have to not only determine that A acted as B reported but also that there are no better-treated D's around?  A strong argument can be made that the answer is yes -- C should determine not merely the facts (was A late?) but whether those facts warranted a discharge in terms of the company''s actual practices (would A's lateness have resulted in his discharge were he white?).

But I may be wrong. Actually, I may be wrong on a lot of this. I thought I'd seen the last of proximate cause when I finished Torts in 1966 (not having covered myself with glory in that course) and I resent the Court requiring me to revisit that concept at this stage in my career!


P.S. I have more thoughts on this, including the tension between the neat "we therefore hold" paragraph and other parts of the opinion that are in tension with this, but I'll save them for another forum.  

P.P.S. Tip o'the hat to John Jacobi and Ed Hartnett who shared thoughts about this with me but haven't approved this post.

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