by Peter M. Panken

The Seventh Circuit Court of Appeals recently held, in a case of first impression, that a manager who was not the actual decision-maker in an employee’s discharge could still be held personally liable under Section 1981 of the Civil Rights Act of 1866 under a “cat’s paw” theory of liability.

In Smith v. Bray, Darrel Smith claimed that he had been subjected to racial harassment by his immediate supervisor, James Bianchetta, and that he was fired because he reported this harassment to a human resources manager, Denise Bray.  The employer’s liability was discharged after it went bankrupt, but Smith had also sued Bianchetta and Bray individually for their roles in his termination. Bianchetta settled privately, and the District Court found that Bray had no liability and granted her motion for summary judgment. While the Seventh Circuit affirmed, it did so under a different rationale, endorsing the “cat’s paw” theory of liability for individuals who, with an unlawful motive, persuade the decision-maker to terminate an employee—but ultimately finding insufficient evidence against Bray under this theory.

As Judge Posner of the Seventh Circuit explained:

In the fable of the cat’s paw (a fable offensive to cats and cat lovers, be it noted), a monkey who wants chestnuts that are roasting in a fire persuades an intellectually challenged cat to fetch the chestnuts from the fire for the monkey, and the cat does so but in the process burns its paw. In employment discrimination law the “cat’s paw” metaphor refers to a situation in which an employee is fired or subjected to some other adverse employment action by a supervisor who himself has no discriminatory motive, but who has been manipulated by a subordinate who does have such a motive and intended to bring about the adverse employment action.

The “cat’s paw” doctrine can be thought of as an application of the “motivating factor” doctrine; the monkey’s malevolent intent is imputed to the employer. So if the employer can’t show that the monkey’s supervisor, who did the actual firing (or took some other adverse employment action), had a lawful motive uncontaminated by the monkey that would have led the supervisor to fire the employee even without the monkey’s interference, the employee is entitled to damages.

The Court found that Bray’s liability depended on whether she specifically had a retaliatory animus in her role as the human resources professional who recommended to Smith’s second-level manager that he be discharged. The Court noted that “to meet the causation or motive requirement, Smith must show” by admissible evidence that an unlawful motive was a ‘substantial or motivating factor’ in [Bray’s] decision to recommend his termination.”

The Court emphasized that the plaintiff has the burden of proving that each individual accused of liability under Section 1981 has an unlawful motive. The Court recognized the “interrelationship and interdependency” between human resources officials and supervisors. Thus, human resources specialists will not automatically be liable for their involvement in such controversies, but they may be more vulnerable to suit as a result of this decision.

How Should Employers Respond?

Employers should establish training and resources to make all employees aware that they can be held individually liable for causing another employee to be terminated based on discriminatory intent. While employers can try to reduce the possibility of improper terminations through independent investigations of claims before taking adverse employment actions, such independent investigations may not fully insulate the employer and its employees from liability.

The Supreme Court in Staub v. Proctor Hospital  held that an independent investigation by the final decision-maker  will not extinguish liability for the entity. Unless the adverse employment action is fully justified, if the final decision-maker takes into account the biased supervisor’s (or human resources specialist) recommendation, both the decision-maker and the biased employees can be held liable. Unfortunately, courts have not been clear on what a sufficient independent investigation entails to shield the employer from liability.

The lesson for Human Resources officials, who deal with these problems every day, is to be sure that the adverse employment action is appropriate and not solely based upon the recommendation of a supervisor who has been accused of illegal discrimination. The red flag should go up when an accused supervisor recommends adverse employment action, and the Human Resource official would be wise to independently verify the grounds for the adverse employment action.