The U.S. Supreme Court has agreed to decide when employers can be held accountable for company officials who cause or influence the outcome of an adverse employment action, but do not themselves make that decision. The case, Staub v. Proctor Hospital (09-400), will therefore resolve conflicting opinions from several circuit courts of appeal regarding when employers may be held liable for the unlawful motives and actions of an official other than the formal decision maker, often referred to as the “cat’s paw” theory of imputed liability.

In this case, employee Vincent Staub alleged that he was unlawfully terminated in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. §§ 4301 et seq., because his supervisor and other company employees resented the fact that he was a member of the Army Reserves. He claimed that the stated reasons for his termination – insubordination, shirking, and attitude problems – were merely pretext for discrimination based on his military association. During his trial, Staub introduced evidence that officials in his department made disparaging comments about his commitments to Reserve duty, and argued that the vice president of human resources, who ultimately made the decision to terminate his employment, was unduly influenced by those who harbored animosity about his military service. A jury found in his favor, but the Seventh Circuit Court of Appeals set aside (pdf) that verdict and ordered dismissal of the case. The appellate court reasoned that under controlling Seventh Circuit precedent, an employer can only be held liable for the unlawful motives of the formal decision maker, or another individual who “so dominated” the decision-making process as to constitute the “functional decision maker.” Other courts, however, have used less stringent standards to impute liability to the employer.

Whether or not the Supreme Court finds in Staub’s favor, this case should serve as a warning to employers to ensure that all company officials – not just formal decision makers – are trained on anti-discrimination laws.