In a split decision, the U.S. 6th Circuit Court of Appeals—which covers Kentucky, Michigan, Ohio, and Tennessee—recently held that the cat’s-paw theory of liability applies to retaliation claims under the Family and Medical Leave Act (FMLA).
“Elsa,” a former employee of The Rawlings Company, suffers from depression, anxiety, and posttraumatic stress disorder. The debilitating effects of those conditions forced her to take unexpected FMLA leave in February and March 2012. When she returned from leave, she was greeted with a backlog of work. She struggled to clear the backlog that had accumulated in her absence, and the company eventually demoted her from team lead to workers’ compensation analyst, the position she held when she started working at the company.
The decision to demote Elsa was made by “Nevaeh,” then the president of the division for which Elsa worked. However, evidence suggested that Nevaeh was motivated to make the decision by “Austin,” Elsa’s immediate supervisor. Upon Elsa’s return from FMLA leave, Austin made several derogatory comments about her use of FMLA leave and singled her out in front of her peers at a departmental meeting.
Elsa again went out on FMLA leave in March 2013 and took intermittent FMLA leave from April through August. On one occasion after she returned to work in September 2013, “Sawyer,” her second-level supervisor, noticed that she and a coworker were away from their desks for much of the day. When he confronted her, Elsa informed him that she was being harassed by Austin.
Sawyer reported the alleged harassment to Nevaeh, who, after meeting with Elsa, believed “she was someone who was not doing her job, and had been called on the carpet by her supervisor,” and, in order to deflect attention, brought up the harassment allegations. Nevaeh met with the owner of the company, George Rawlings, who decided to terminate Elsa for making false harassment allegations.
Elsa sued her former employer for retaliation and interference under the FMLA, discrimination in violation of the Americans with Disabilities Act (ADA), and intentional infliction of emotional distress. A district court granted the company’s request for summary judgment (i.e., dismissal without a trial), and Elsa appealed.
6th Circuit’s Decision
The 6th Circuit reversed the district court’s ruling on Elsa’s FMLA retaliation and ADA discrimination claims and affirmed the dismissal of the other two claims. In doing so, the appellate court relied on the cat’s-paw theory of liability to determine that there was a genuine dispute about the employer’s liability for the FMLA and ADA claims, and the lower court’s dismissal of those claims was improper.
Under the cat’s-paw theory of liability, an employer may be liable when a supervisor who lacks bias is influenced by a biased individual to take a negative employment action. In essence, the cat’s paw is the unbiased decision maker who is duped by the biased subordinate into taking a retaliatory employment action.
A decision maker may be “detached from day-to-day operations” and “unthinkingly” accept the recommendations of her subordinates without animus. When the cat’s-paw theory is applied, the employer cannot shield itself from liability through the willful blindness of its ultimate decision makers.
In this case, according to the court of appeals, Elsa presented sufficient evidence to suggest that Nevaeh and Rawlings were conduits for Sawyer and Austin. Elsa argued that Sawyer and Austin, who were biased against her, influenced Nevaeh’s decision to demote her. When she was terminated, their influence carried over from Nevaeh to Rawlings, the ultimate decision maker.
When an ultimate decision maker takes an adverse employment action that is in line with a biased subordinate’s recommendation, the employer may escape liability only if it shows that the decision maker conducted an independent investigation and determined that the adverse action was warranted. In this case, there was no evidence to suggest that Rawlings conducted a thorough, independent investigation before making the decision to terminate Elsa. Therefore, the company could not escape liability.
The court further determined that dismissal of the ADA claim was improper because Elsa could rely on the cat’s-paw theory to establish The Rawlings Company’s liability on that claim. As a result, the appellate court reversed the lower court’s dismissal of Elsa’s ADA discrimination and FMLA retaliation claims and sent the case back to the lower court for further proceedings. Marshall v. Rawlings Co. LLC, 2017 U.S. App. LEXIS 6854 (6th Cir., 2017).
This case illustrates the need for ultimate decision makers to conduct thorough investigations before taking adverse employment actions against employees. A decision maker weighing an adverse action against an employee should be wary of relying too heavily on the mere insights of a subordinate supervisor.
In the end, the subordinate may be biased. While the decision maker may eventually decide that adverse action is warranted, he must be able to show that the decision was made at the conclusion of a thorough, unbiased investigation and wasn’t merely the product of a subordinate’s influence. Otherwise, the employer may be on the hook for liability.