Tens of thousands of men and women who served in Iraq and Afghanistan are returning to the U.S. this year. Many will return to jobs they left when their reserve units were called up or when they enlisted in the Armed Services, while others will seek new employment opportunities. A March Supreme Court decision suggests that some managers and supervisors may not realize the protections the Uniformed Services Employment and Reemployment Rights Act (USERRA) affords these veterans.

In Staub v. Proctor Hospital, a unanimous Supreme Court held that an employer can be liable for employment discrimination under USERRA based on the discriminatory animus of a supervisor who expressed anti-military sentiments and then influenced a higher level decision maker to fire a member of the U.S. Army Reserve.

“If the supervisor performs an act motivated by anti-military animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA,” Justice Antonin Scalia wrote.

The case is notable on two counts. First, it reinforces the broad protections afforded veterans and members of the military reserves–protections that mirror Title VII provisions covering minorities and women. Second, for the first time, the Supreme Court affirmed the validity of the cat’s paw theory of discrimination, which contends that an employee has a valid discrimination claim even if the person who makes the negative employment decision is not biased if the decision is based on information from someone else who is biased.

“This opens a huge can of potential liability,” says Matthew Johnson, a shareholder at Ogletree Deakins. “If you take the decision on its face and assume any employer can be liable under USERRA or Title VII for a decision not directly based on discriminatory animus, but based on some other person’s discriminatory animus, there is seemingly almost no end.”

Staub’s Story

The case grew out of the firing of Vincent Staub, a member of the Army Reserve and an angiography technician at Proctor Hospital in Peoria, Ill. Staub alleged that beginning in 2000, his immediate supervisor, Janice Mulally, demonstrated hostility to his military service by scheduling him to work on the weekend, which conflicted with his training schedule. She also allegedly scheduled him to work extra shifts so he could pay back the department “for everyone else having to bend over backwards to cover” for him during his military drills. Staub reported his conflict with Mulally to Michael Korenchuk, the department head, who allegedly called reserve duty “a waste of taxpayers’ money.”

In April 2004, Korenchuck informed Linda Buck, Proctor’s vice president of human resources, that Staub had left his desk without informing a supervisor, in violation of a corrective action Mulally had issued to Staub earlier in the year. Staub later disputed that, saying he had left Korenchuck a voice mail message. But Buck, relying on Korenchuck’s accusation and a review of Staub’s personnel file, fired Staub. Staub challenged the firing through Proctor’s grievance process, alleging that Mulally fabricated the allegation that led to the original corrective action out of hostility to his military duty. Buck did not investigate this claim.

Staub sued the hospital, claiming Mulally’s and Korenchuck’s hostility to his military service caused them to take actions that influenced Buck’s ultimate decision to fire him. A jury agreed and awarded Staub $57,640 in damages. The 7th Circuit reversed, saying a cat’s paw case could not succeed unless the lower level supervisor had exercised such “singular influence” over the decision maker that the decision to terminate was based on “blind reliance” on the biased supervisor.

Extra Steps

The Supreme Court reversed, saying the 7th Circuit’s interpretation of the cat’s paw theory was too narrow. But the majority opinion gave little guidance to employers on how to avoid such liability. In a concurring opinion, Justice Samuel Alito sought to define safe ground for employers by saying employers should not be held liable “where the officer with formal decision making responsibility, having been alerted to the possibility that adverse information may be tainted, undertakes a reasonable investigation and finds insufficient evidence to dispute the accuracy of that information.”

“Ultimately this is a case where the Supreme Court has not provided the clearest guidance on what is proper to rely on [in making an employment decision] and what is not,” says George Wood, a shareholder at Littler Mendelson. “It will come down to the lower courts and the courts of appeal to flesh out. That takes time. I think we will see this [cat's paw] theory popping up more often as this process works its way through.”

As a precaution, experts advise decision makers to take an extra step when basing decisions on an employee’s prior evaluations and disciplinary actions to assure those did not result from a discriminatory motive.

Proctor probably requires that when someone hands you a negative evaluation, you need an extra layer of investigation before you actually make a decision,” says Johnson. “You can no longer rubber-stamp decision making in an employment context.”

Employers should also extend grievance procedures they have in place for Title VII complaints to also cover USERRA and other employment issues, adds Conrad Kee, a partner at Jackson Lewis.

“The best lesson is to broaden internal procedures and establish a routine investigative procedure so we can say the ultimate decision maker really did make the employment decision independently,” Kee says.

Information Gap

Proctor reminds employers of the discrimination protections under USERRA, which often aren’t recognized.

While most employers are aware of the law’s reinstatement provisions, which essentially require employers to reinstate a returning veteran to the position and compensation he would have had if he had remained on the job, there is less understanding of the law’s protection against hostile work environments and discrimination growing out of anti-military attitudes. Cases are relatively rare and USERRA is often overlooked during anti-discrimination training.

“We have a lot of training for managers on general discrimination issues, but typically USERRA is not included,” Kee says. “There may be an information gap out there.”