Yesterday the Supreme Court unanimously decided that an employer will be liable for the bias of a supervisor even when the ultimate decision maker was not personally motivated by unlawful bias. This decision has enormous consequences for human resource professionals. Now, if an adverse employment action is taken based on tainted information provided by a biased supervisor then there will likely be liability under most anti-discrimination laws.
Reference
Staub v. Proctor Hospital
(Justice Scalia wrote for the Court, Justices Alito and Thomas concurring, Justice Kagan took no part)
What the Case was about – Biased Supervisor but Unbiased Decision Maker
The case involved the termination of an employee who was fired after he received orders to report for military duty. His supervisors had expressed frustration about his need to be away from work. He was given disciplinary warnings by a supervisor about his work as an angiography technician which resulted in a Corrective Action. When the hospital’s Vice President of Human Resources received a report that the employee had violated the Corrective Action, she reviewed the employee’s personnel file and then decided to fire him. Although he filed a grievance and argued that his supervisor was biased against him because of his military obligations, the HR Vice President adhered to her decision.
Seventh Circuit Holds that the Decision was not totally Based on Biased Supervisor – Employer Not Liable
The employee filed a claim under USERRA that prohibits discrimination against an employee if the employee’s military status is a “motivating factor” in the decision to take adverse employment action. The employee won a jury verdict at trial, but the Seventh Circuit reversed. It held that an employer could only be held liable for the bias of a non-decision maker, if that non-decision maker exercised “singular influence” over the decision maker such that there was “blind reliance” on the information provided by the non-decision maker. The Court believed that the Vice President’s reliance on an interview with another supervisor and her review of the employee’s personnel file was enough to remove the decision from the “singular reliance” on the bias of the direct supervisor. The employee appealed to the Supreme Court.
The Supreme Court Holds the Employer can be Liable for the Bias of the Supervisor
The Supreme Court looked to principles of agency and traditional tort law to reverse the Seventh Circuit and send the case back for review or a new trial. The Supreme Court held that if a supervisor performs an act motivated by an unlawful bias that is intended by the supervisor to cause an adverse employment action and if the supervisor’s act is a proximate cause of the adverse employment action – then the employer is liable. Although this case arose under USERRA dealing with military obligations, the same theories apply under Title VII dealing with race, color, religion sex and national origin discrimination.
Avoiding Liability – The Employer’s Burden
The Supreme Court suggests a way to avoid liability. If the employer’s investigation prior to making its ultimate decision on the adverse action reveals reasons unrelated to the supervisor’s original biased action – and the employer can prove it – then liability can be avoided. This is a heavy burden because the supervisor’s report could still be a casual “factor” in the ultimate decision if the decision maker’s investigation takes it into account. There would be liability unless it is determined – without relying on the supervisor’s report – that the adverse action was entirely justified.
Why this Decision is Significant
We believe that this decision will lead to more litigation and will place a great deal of pressure on the ultimate decision maker to make sure that there is absolutely no bias in any of the information relied on in taking the adverse employment action. Now plaintiffs will likely assert that past discipline, performance reviews, and incident reports were the result of supervisor bias that was intended to lead to adverse employment actions. The implications are far reaching – from adverse hiring decisions based on biases of the interviewers – to transfer decisions – to promotion decisions – to merit increase decisions – to discipline – to discharge – and even to the quality of job references given on former employees. Virtually all employment decisions will be affected by this ruling.
Establish Best Practices Now
Remember that it is the employer’s burden now to demonstrate that unlawful bias was not a motivating factor in an adverse employment decision. Here are some “best practices” to consider in meeting that burden:
- Train your supervisors to avoid any sign of bias in issuing discipline, making performance reviews, recommending transfers or promotions.
- Avoid simply reviewing the personnel file in making employment decisions.
In making employment decisions look beyond the records, reports and file information to assure that the information contained is free of bias. - Verify all the information that will be relied on in making the decision.
- If suspected bias is detected, avoid consideration of information provided by that source and develop and independent basis for the adverse employment action.
- Remove a “tainted” supervisor from the decision making process, including meetings, emails and reports.
- The ultimate decision maker should articulate (preferably in writing) the basis for making the adverse employment decision including the sources of information relied on.
- Make sure all articulated reasons for the action are consistent – internal personnel documents, unemployment submissions, EEOC position statements, and the reasons you actually gave to the employee.
- Respond promptly to any employee report of supervisor bias. Investigate, remedy, follow up with the employee and document the process.
- Avoid admissions of the potential existence bias in emails, reports or records.
- If you need assistance or more information on the impact these changes, please do not hesitate to contact your regular Hall Render attorney or a member of our Employment and Labor Section.
