In employment litigation, plaintiffs often rely on the “cat’s paw” doctrine to hold their employers liable for discriminatory or retaliatory animus of a supervisory employee who influenced, but did not make, the ultimate employment decision.  On August 29, 2016, the United States Court of Appeals for the Second Circuit, in Vasquez v. Empress Ambulance Service, Inc., greatly extended the reach of the “cat’s paw,” holding that the doctrine could be applied to hold an employer liable for an adverse employment decision that was influenced by the discriminatory or retaliatory animus of a low-level, non-supervisory co-worker.

The plaintiff, an emergency medical technician employed by the defendant, was terminated within hours of complaining to her supervisors that a male co-worker had sent her a text message containing a graphic, sexual photograph.  Plaintiff alleged that when her male co-worker learned that she had complained, he manipulated his iPhone to make it appear that a conversation containing consensual sexual text banter that he had with another person was a conversation between him and plaintiff and, when questioned by the employer about plaintiff’s allegations, provided printed screen shots of portions of this alleged conversation, telling the employer that he and the plaintiff had been involved in a consensual relationship.  In her lawsuit, plaintiff complained that her employer accepted the co-worker’s tale as true, and rejected her offer to turn over her cell phone for inspection or otherwise refute his claim.  Instead, plaintiff asserted that she was told by her employer that it “kn[e]w the truth,” that she had a sexual relationship with the co-worker, and that her employment was being terminated because she had sexually harassed him.   Plaintiff filed suit, asserting that the employer’s decision to terminate her employment was an act of retaliation in violation of Title VII because she had voiced complaints of sexual harassment.  Relying on the “cat’s paw” doctrine, the plaintiff argued that the employer’s decision to terminate her employment was influenced by false information provided by her male co-worker.  The district court dismissed her complaint, concluding that an employer could not be held liable under the “cat’s paw” doctrine for the discriminatory or retaliatory intent of a non-supervisory co-worker.

On appeal, the Second Circuit disagreed and reinstated plaintiff’s Complaint.  Despite the fact that the male co-worker was a low-level employee without any supervisor authority, the Second Circuit held that the employer’s “own negligence provides an independent basis” to treat the male co-worker as its agent and hold it accountable for his illegitimate intent.  Referencing the allegations that the employer “blindly credited” the male co-worker’s assertions and “obstinately refus[ed] to inspect [plaintiff]’s phone or to review any other evidence proffered by [plaintiff] in refutation,”   the Second Circuit concluded that “an employer may be held liable for an employee’s animus under a ‘cat’s paw’ theory, regardless of the employee’s role within the organization, if the employer’s own negligence gives effect to the employee’s animus and causes the victim to suffer an adverse employment action.”

The impact of this decision on retail employers who are often called upon to make employment decisions based on information provided by one employee about another?  Negligence is the key.  Only when the employer effectively adopts the co-worker’s animus by acting negligently with regards to the information provided may the co-worker’s improper motivation be imputed to the employer to support a claim under the cat’s paw doctrine.  Exercise good faith and be thorough in conducting internal investigations.  Do not ignore warning signs.  Consider all evidence offered in making employment decisions.

Our colleague Frank C. Morris, Jr., a Member of the Firm in the Litigation and Employee Benefits practices, in the firm’s Washington, DC, office, was quoted in “Retaliation, ADA Charges Rise” by Allen Smith.  The article discusses the uptick in retaliation charges which have been filed and includes tips for employers on how to reduce the likelihood that they will get hit with those types of charges.

Following is an excerpt:

ADA cases today are more often about what took place in the interactive process for identifying a reasonable accommodation than about whether a disability is covered by the law. So, employers should have protocols in place on how to respond to accommodation requests and should document those efforts. This is “incredibly important” if there is litigation, Morris said.

If there is an agreement on an accommodation, put it in writing and have the employee sign the document, he recommended.

Remember that under the ADA, the accommodation obligation is ongoing. “Just because you’d done everything right in 2015 doesn’t mean you don’t need to do everything right in 2016,” he said. Things change, and the employer should be ready to start the accommodation conversation on fresh footing if the employee requests a new accommodation.

By David Jacobs and Amy B. Messigian

We would like to call your attention to a significant change to the whistleblower statute in California that went into effect on January 1.  The statute, Cal. Lab. Code section 1102.5, has been substantially expanded beyond its prior form to now protect employees from retaliation for making internal complaints or even potential complaints about suspected violations of federal, state or local law.

California previously protected employees from retaliation for reporting reasonably suspected violations of state or federal laws to a government agency. The new law also extends whistleblower protections to employees who report behavior that they reasonably believe to be illegal to a supervisor or other employee with authority to “investigate, discover or correct,” or to a “public body conducting an investigation, hearing or inquiry.”   The new law also expands these protections to cover complaints about local laws.  Thus, it is possible that a complaint relating to the purported violation of an obscure ordinance could give rise to protection under the amended statute.

Therefore, under the new law any complaint made to human resources that relates to purportedly unlawful conduct may result in the protection of California’s whistleblower statute.  Moreover, these protections will apply regardless of whether the employee is required as a function of his or her job to disclose purported illegal activity.

Also of concern, under the revised provisions of Labor Code section 1102.5, it is unlawful for any person acting on behalf of the employer to retaliate against the employee based on a belief “the employee disclosed or may disclose” the information, either internally or to a government agency.  In effect, the revamped law protects employees who have not yet even complained against “anticipatory retaliation.”

Due to the expansive scope of the new provisions, it is possible that the changes in the law may lead to an increase in whistleblower claims and claims under the Private Attorney General Act brought on behalf of the public welfare.  As violations of Labor Code section 1102.5 may subject an employer to a variety of damages, including civil penalties of up to $10,000 per violation, California employers should consider training their supervisors and human resources personnel on the expansion of the new law in order to prevent against unwitting violations or becoming a test case on the scope of these new provisions. Particularly, supervisors should be reminded to document performance issues as they occur to avoid someone turning into a “whistleblower” to forestall disciplinary action.

Our colleague Amy B. Messigian at Epstein Becker Green recently posted “Supreme Court Decision Sets High Bar for Establishing Retaliation Claims Under Title VII” on the Health Employment and Labor blog, and we think retail employers will be interested.

Following is an excerpt:

In University of Texas Southwestern Medical Center v. Nassar, one of two employment-related opinions issued on Monday by the Supreme Court, a narrow majority held that a retaliation claim brought under Title VII of the Civil Rights Act of 1964 must be proved according to a strict but for causation standard. Under such a standard, a plaintiff must present proof that “the unlawful retaliation would not have occurred in the absence of the alleged wrongful action or actions of the employer.”

The underlying facts of the Nassar case are somewhat complicated. The plaintiff, a medical doctor employed as a faculty member of the defendant medical center and staff physician for its affiliated hospital entity, resigned from the faculty claiming that the chief of infectious disease medicine at the medical center was biased against individuals of Middle Eastern heritage such as plaintiff. The hospital entity offered the plaintiff a full time position as staff physician, but later rescinded the offer after plaintiff’s former supervisor protested the job offer. The plaintiff sued, alleging that the medical center retaliated against him for his discrimination complaints by encouraging the hospital to rescind its job offer. A jury returned a verdict in the plaintiff’s favor and awarded more than $3 million in damages.

Read the full post here.

by Daniel R. Levy

On December 1, 2011, the Superior Court of New Jersey, Appellate Division, affirmed dismissal of a whistle-blowing and defamation lawsuit based in part on application of the New Jersey Health Care Professional Responsibility and Reporting Enhancement Act. In Senisch v. Carlino, A-6218-09T3 (N.J. App. Div. Dec. 1, 2011), the court held that a health care entity which had reported negative, but truthful, information to another health care entity about a former health care professional’s termination of employment could not be liable for doing so.

In this case, the plaintiff was employed as a physician’s assistant in the cardiology department of Deborah Heart and Lung Center (“Deborah”).  Although the plaintiff had received favorable performance reviews in his first years of employment at Deborah, his 1999 performance evaluation was unfavorable, and Deborah later terminated his employment as a result of specifically stated performance deficiencies.  In 2001, he filed a lawsuit against Deborah alleging violations of New Jersey’s Conscientious Employee Protection Act (“CEPA”) and Law Against Discrimination (“LAD”).  Before trial, the case was settled.

Subsequently, the plaintiff obtained a position with a surgical orthopedic practice.  The position required that plaintiff obtain his credentialing at Underwood Memorial Hospital (“Underwood”).  As part of that credentialing process, Underwood requested information about the plaintiff from Deborah.  A physician at Deborah responded to the information request from Underwood, stating that based on the plaintiff’s documented performance by his supervisor, he “was involuntarily terminated from employment at Deborah following a series of unsuccessful attempts to achieve consistent improvement in his performance.”  The response also listed the performance deficiencies documented in the plaintiff’s personnel file.  Thereafter, the plaintiff withdrew his name from consideration for credentialing with Underwood and also resigned from his employment at the orthopedic practice.

The plaintiff then filed a second lawsuit, this time alleging retaliation by Deborah in violation of CEPA, as well as defamation and tortious interference with prospective economic advantage.  The trial court granted the defendants’ motion for summary judgment, and the plaintiff appealed.

The Appellate Division affirmed, determining that the Act required the defendants to disclose the information to Underwood.  The court held that the defendants were protected under the civil immunity provision of the Act because there was no evidence that the information provided in response to the request was “in bad faith or with malice.”  As a result, the court held that because the defendants were protected “against civil liability for reporting the circumstances of plaintiff’s termination, plaintiff could not prevail on his claims of tortious interference and defamation, or retaliation under CEPA.”

Although many states outside New Jersey have enacted legislation granting qualified immunity to employers providing reference information, few have gone as far as New Jersey by requiring health care entities to provide such information in response to a request by another health care entity.  While many states provide immunity to employers who act in good faith, determining whether liability exists varies among jurisdictions.  Most states that have enacted laws that provide immunity to employers which provide truthful information about former employees have limited immunity so that it applies only when the employer provides information directly related to the employee’s job performance, but not for information unrelated to job performance, i.e., that the employee had filed a discrimination charge against the employer.  Moreover, questions may exist as to whether liability may attach for references provided across state lines where the reference laws among those states differ.  Ultimately, health care entities, as well as other employers, should proactively ensure compliance with appropriate state reference laws.

The EEOC has reported that it receives more charges of retaliation than any other type of employment discrimination charge, and that there are thousands of cases involving allegations of illegal retaliation filed every year.  Retaliation is often prohibited by statute, but the Supreme Court has expanded the scope of actionable retaliation lately, holding that there was a cause of action for retaliation even though the statute in question did not expressly cover the situation at issue.

The Fair Labor Standards Act (FLSA) prohibits discrimination against an employee “because such employee has filed any complaint” under the Act.  In Kasten v. Saint Gobain Performance Plastics Corp. (PDF), 563 U.S. ___ (2011), the U.S. Supreme Court held that, although there can be no retaliation if the employer is not on fair notice of the initial complaint, a complaint need not necessarily be in writing to trigger protection under the Act.

Kasten had complained about the placement of the time clocks between the area where required work clothing was donned and doffed and the work area, such that employees were not paid for the time they spent donning and doffing their work clothes.  The employer had a grievance system that allowed for oral complaints of violations of any law.  Kasten testified that he “raised a concern” with his lead operator, his shift supervisor, the human resources manager and the operations manager that  the placement of the time clocks was illegal, but he had not “filed” any sort of written “complaint.”

The District Court and the Seventh Circuit Court of Appeals both held that oral complaints are insufficient to trigger retaliation protection under the FLSA.  The Supreme Court reversed and remanded.  Justice Breyer, writing for the 6-2 majority, held that the Act requires only “fair notice” of a complaint, reasoning that “it is difficult to see how an employer who does not (or should not) know an employee has made a complaint could discriminate because of that complaint,” and left it to lower courts to decide whether “Kasten will be able to satisfy the Act’s notice requirement” based on his oral grievance.

What steps can employers take in response to the Kasten decision?

  • Employers are well advised to institute a formal grievance procedure and specify that the procedure is the appropriate way to put the employer on notice of any complaints. Raising grievances orally with low level supervisors then at least arguably may not be enough to trigger retaliation protection.
  • Although many formal grievance procedures have an oral first step, employers would be wise to require writing early on in the process.  This has the advantage of identifying exactly what is being complained about so the initial complaint does not become inflated years later once a plaintiff’s lawyer gets involved.
  • Employers should train their supervisors and managers to make Human Resources and upper management aware when employees complain about allegedly illegal activities. A complaint may at first appear to be mere griping, but it could be the basis for a lawsuit or even a union organizing campaign.