L&G Law Group LLP First Quarter 2011 Employment Law Update

In late 2010 and early 2011, the U.S. Supreme Court issued three particularly noteworthy decisions in the employment law arena, all of which could be read to expand the protections that employees have under various federal statutes such as FLSA and Title VII. In particular, these decisions illustrate the strong protections available to employees who lodge internal or external complaints of potential discrimination – yet again proving the adage that weak discrimination claims can make strong retaliation claims when employers mishandle them.

Kasten v. Saint-Gobain Performance Plastics Corp, involved the anti-retaliation provision of the Fair Labor Standards Act (“FLSA”). [Note: the FLSA provision on its face only purports to cover complaints that are actually “filed.” 29 U.S.C. § 215(a)(3). On the other hand, Title VII’s provision more broadly purports to outlaw retaliation for “opposing any [unlawful] practice.” 42 U.S.C. § 2000e–3(a)]. In Kasten, the Supreme Court overturned the U.S. Court of Appeals for the Seventh Circuit’s judgment that only written complaints to the employer could fall within the ambit to of the FLSA provision, because only written formal complaints could be “filed.” The Supreme Court disagreed, holding that plaintiff’s oral complaints could be covered by the FLSA’s anti-retaliation provision if they provided the employer with fair notice and involved some of assertion of rights protected by the statute. Kasten therefore reemphasizes the need for employers to adequately document and investigate even oral or informal complaints of discrimination or retaliation.

In Staub v. Proctor Hospital, the Supreme Court unanimously recognized and set forth the parameters of the “cat’s-paw” theory of liability. Staub involved a discrimination claim under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). [Note: USERRA has a liability provision mirroring Title VII’s, but prohibits using military status as “a motivating factor” in adverse employment decisions]. The cat’s paw theory is used by plaintiffs in cases where there is proof that an employee with a discriminatory animus against him (or knowledge of his “opposition to unlawful conduct”) influenced another’s employment decision, but no proof that that decisionmaker bore the same animus. Thus, in the cat’s paw scenario, the animus of the influencer may be in essence imputed to the decisionmaker.

The Seventh Circuit had previously held that plaintiff Staub could not prove discrimination on the basis of the anti-military animus of his two supervisors (who were consulted about, but did not make the final decision to fire him) unless he could show that those supervisors exerted “singular influence” over the final decisionmaker. According to the Seventh Circuit, plaintiff could not do so, because the ultimate decisionmaker conducted an independent investigation and did not solely rely on information provided by the two supervisors who had a discriminatory animus.

The Supreme Court disagreed, holding that the fact that Staub’s supervisors did not make the decision to fire him was immaterial and that all plaintiff had to show was that the supervisors’ actions were a proximate cause of the decisionmaker’s decision to terminate him. Specifically, the Court held that if a supervisor performs an act motivated by discriminatory animus, and “if that act is a proximate cause of the ultimate employment action, then the employer is liable.” Staub thus greatly impairs an employer’s ability to defend discrimination suits on the basis that the final decisionmaker relied on the recommendations of others without actual knowledge of their true motives and/or did not know that plaintiff had engaged in protected activities prior to the time the decision was made. This in turn, again reiterates the need for employers to: document employee performance problems in advance; adopt and train employees with respect to formal policies that seek to uncover and address potential discrimination; and consider whether a person recommending adverse employment actions may have ulterior/illegal motives.

Finally, in Regalado/Thompson v. North American Stainless, the Supreme Court expand Title VII’s anti-retaliation provisions to cover people who didn’t actually complain about potential discrimination, but did have a relationship with an employee who did. Regalado/Thompson involved two fiancées who worked for the same employer. When Miriam Regalado filed an EEOC charge claiming that the employer discriminated against her on the basis of her sex, the employer was apparently dissuaded from retaliating against her directly. Instead, the employer chose to take it out on Regalado’s fiancé, Eric Thompson. The lower courts could not agree whether Thompson was entitled to sue under Title VII’s retaliation provisions because he never engaged in activity protected by Title VII (e.g. opposition to unlawful conduct or participation in another’s complaint). In a rare unanimous decision, the Supreme Court decided that he could, holding that allowing employers to retaliate against people like Thompson would just as easily dissuade an employee like Regalado from exercising her rights as would retaliation directed at her. Regalado therefore illustrates the importance of adopting an internal anti-retaliation policy and adequately training employees so that they understand the employer will not tolerate retaliation of any kind.

For more information about L&G Law Group LLP’s Employment Law Practice, please contact Partner Rob Smeltzer at (312) 456-7952 or email him at rsmeltzer@lgcounsel.com.