Supreme Court hears argument on employer liability in Staub v. Proctor Hospital

Yesterday, the U.S. Supreme Court heard oral arguments in Staub v. Proctor Hospital. I don’t know why I could not find an article about it in this morning’s newspaper. U.S. Army Reserve First Sergeant Vincent Staub worked as an angiography technician for the Proctor Hospital in Peoria, Illinois, for 14 years. You can read in this prior blog post about his claim that his supervisor’s anger over how his reserve duties disrupted the hospital’s schedule led to his termination of employment. The issue for the Supreme Court is whether Proctor Hospital can be held liable under the Uniformed Services Employment and Reemployment Rights Act of 1984 (USERRA), 38 U.S.C. 4301. The issue is important to whistleblowers as many employers try to orchestrate a whistleblower’s discharge so that they and put forward an unbiased decision maker to claim that retaliation had nothing to do with that discharge. If Staub can win his appeal, it will become harder for employers to get away with such orchestrations.

The Hospital’s attorney, Roy Davis, argued that since there was only one hospital administrator who made the decision to fire Staub, the hospital should not be liable unless Staub can prove that this administrator was biased. Staub’s attorney, Eric Schnapper, noted that USERRA only requires Staub to prove that discrimination was a “motivating factor” in the adverse action. He argued that once an illegal motivating factor is shown, the employer then has to prove that it would have fired Staub anyway, even without the unlawful motive. He disagreed with the Seventh Circuit’s new rule, that a decision maker is off the hook if he or she does an independent investigation. In yesterday’s argument, Justice Alito questioned Schnapper about what evidence would be required to show a “motivating factor.” At page 11 of the transcript, Justice Alito said, “the natural reading of that is that it looks at the motivation of the person who actually makes the decision to discharge.” He added, “That’s a very unattractive rule. But the rule that you have suggested is also a very unattractive rule, one that I doubt the Congress intended to adopt. Is there no reasonable middle position here?”

At pages 8-9, Justice Alito asked Schnapper about whether a decision maker’s independent investigation would absolve the employer of liability. Schnapper started to answer that if a biased person contributed to the decision, then the burden would shift to the employer that it made no difference in the outcome. But Schnapper did not finish that comment as Justice Alito interrupted him to emphasize a hypothetical situation in which the decision maker conducts a thorough independent investigation of the grounds for discharge. Schnapper noted that the statute has no special rule for investigations. Justice Kennedy said, “that’s a sweeping rule.” He went on to suggest that employers will need to get insurance since they will be liable for the illegal motives of subordinates even when top managers are unaware of those motives.

On pages 12-13, Justice Sotomayor asked if the “motivating factor” has to be “substantial.” Schnapper said no. Congress was aware that the Supreme Court had considered a variety of standards in Price Waterhouse v. Hopkins, 490 US 228 (1989), and Congress chose the lowest threshold (motivating factor) without using the word “substantial.” At pp. 16-17, Assistant Solicitor General Eric Miller said that a “motivating factor” cannot be trivial or de minimus.

At pages 14-15, Justice Scalia asked Schnapper if he would hold employer’s liable where the decision maker was not “willful” in violating the law. Schnapper explained that where several people contributed to the decision, the willfulness of any one of them would shift the burden to the employer to prove that it would have fired the employee even without that illegal motive.

Roy Davis argued that employers should not be held liable unless the person with the illegal motive “dominated” the decision maker. This is the requirement for a “cat’s paw.” At pages 42-43, Justice Kennedy asked him, “why isn’t this just governed by the standard principles of tort for concurrent actors?” Justice Kennedy explained that this rule is, “whether or not the wrongful actor made a significant contribution. That’s — that’s the end of it.”

As Justice Elena Kagan submitted an earlier brief in this case while she served as Solicitor General, she did not participate in the oral argument. Briefs in this case are available here.

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