* Faith Simms is a 2021 summer associate at Troutman Pepper. She is not admitted to practice law.
Q: Can an employer be found liable for terminating an employee for misconduct after an investigation initiated by a biased supervisor?
A: In a recent decision issued by the Seventh Circuit, Vesey v. Envoy Air, Inc., the court held that the employer was not liable under the cat’s paw theory even though the investigation leading to the employee’s termination was initiated by a biased manager. The cat’s paw theory of liability applies to circumstances where a biased individual, who lacks decision-making power, influences the decision-maker into taking adverse employment action against the employee.
This case arose when Envoy Air terminated an African American airline agent for abusing her travel privileges. Prior to the plaintiff’s termination, she reported that a coworker directed racist remarks and actions toward her, which resulted in that coworker’s discharge. Thereafter, the plaintiff claimed that one of her lead agents and her general manager undertook a campaign of retaliation and harassment against her. According to the plaintiff, both individuals told others that they wanted the plaintiff fired, and the general manager pressured another employee to file an anonymous complaint, alleging the plaintiff abused her travel benefits. Envoy investigated the anonymous complaint and terminated the plaintiff’s employment after concluding that she had indeed abused her travel privileges.
The plaintiff sued, claiming that the airline discharged her in retaliation for reporting racist and retaliatory conduct by other airline employees. She did not allege that the airline’s investigators, who recommended her termination, were biased. Rather, she invoked the cat’s paw theory of liability, alleging that the general manager harbored retaliatory animus against her and encouraged the coworker to file the anonymous complaint that resulted in her termination.
The district court granted summary judgment, and the U.S. Court of Appeals for the Seventh Circuit affirmed, concluding that “the mere fact that an employee’s wrongdoing was reported by a biased supervisor with a retaliatory or discriminatory motive does not establish liability under a cat’s paw theory.” As explained in the U.S. Supreme Court’s ruling, Staub v. Proctor Hospital, to succeed under a cat’s paw theory of liability, a plaintiff must show that the biased supervisor’s actions proximately caused the adverse employment. In that case, the Supreme Court found that a reasonable jury could have inferred that the biased supervisors’ actions were causal factors underlying the neutral investigator’s decision to terminate the employee at issue. The Court noted, to rule otherwise would have the unintended consequence of allowing employers to discriminate by simply “isolate[ing] a personnel official from an employee’s supervisors, vest[ing] the decision to take adverse actions in that official, and ask[ing] that official to review the employee’s personnel file before taking the adverse action.”
Here, the Seventh Circuit concluded that, unlike in Staub, there was a sufficient independent reason to terminate Vesey’s employment — her abuse of travel privileges. As the court stated: “[I]f an employer’s decision to take an adverse employment action did not rely on the credibility of a biased supervisor — that is, the employer believed it had independently sufficient reasons, such as corroboration of the allegations, to take adverse action — then the employee’s cat’s paw theory will fail for lack of proximate cause.” Thus, even if the general manager had a retaliatory motive in pressuring the coworkers to make an anonymous complaint, there was no evidence that the airline’s investigators relied on the veracity of the anonymous complaint for anything other than initiating the investigation. Since the investigators found independent facts justifying termination, no reasonable jury could conclude that the biased manager proximately caused the termination decision.
The Vesey v. Envoy opinion reinforces the principle that employers should use a neutral decision-maker to investigate alleged misconduct and base its conclusions on independent facts, particularly in circumstances involving an employee who recently filed a complaint with human resources.