Employer Can Avoid Liability by Conducting Independent Investigation of Allegations Made by Biased Supervisor Against Minority Subordinate

Under anti-discrimination statutes, an employee can bring a retaliation claim under a theory of liability referred to as a “subordinate bias” theory – also referred to as the “cat’s paw” theory” – in which the employee can claim that an adverse action ostensibly brought by a high-level company decision-maker was, in actuality, based upon the biased recommendation of a lower level manager or supervisor.   The Supreme Court implicitly approved this rationale in Reeves v. Sanderson Plumbing Products in 2000, a case in which a company president followed a recommendation of the director of manufacturing (who, coincidentally, was also her husband) to discharge an employee for falsifying company payroll records.  Because evidence existed to show that the director of manufacturing had generated misleading data to justify the termination, and that he was the “actual” decision-maker, the company was not entitled to judgment as a matter of law against the employee.

In a more recent case, the U.S. Court of Appeals for the D.C. Circuit analyzed a situation under the “subordinate bias” theory, but found that a hospital/employer’s independent investigation erased any taint of discrimination associated with the decision to suspend the employee for her attendance violations.  Furline v. Howard University, D.C. Circ., No. 04-cv-1029 and 04-cv-1114, July 24, 2008.

In that case, Cynthia Morrison, a 46-year-old registrar at Howard University Hospital, was suspended without pay for five days after an absence from work without leave or justification.  The suspension was imposed after a hearing conducted by the hospital human resource office, and after prior disciplines for attendance policy violations.  Morrison ultimately filed a lawsuit, alleging that she was the victim of age discrimination, and that her suspension was instigated by her supervisor, against whom she had filed an internal complaint of age discrimination.   The trial court granted summary judgment in favor of both the hospital and the supervisor on Morrison’s age discrimination and hostile environment claims, but allowed her claim of retaliation to go to trial.  A jury found in Morrison’s favor, awarding $15,000 in compensatory damages and $100,000 in punitive damages.  The court denied the defendants’ motions for judgment notwithstanding the verdict and for a new trial.

On appeal, the D.C. Circuit reversed the lower court’s denials, and granted judgment in the hospital’s favor against Morrison.  The determinative issue in the case was the fact that although Morrison’s supervisor had recommended the disciplinary suspension that ultimately was imposed, that recommendation was subject to multiple layers of review and approval by upper levels of management and the Office of Human Resources.  In addition, evidence was presented at trial to show that the hospital consistently took comparable steps to address time and attendance problems of younger employees in similar positions to Morrison, and took no such action against older employees without similar problems.

Under the now-familiar McDonnell Douglas shifting-burden framework, once an employer has proffered a legitimate business reason for an adverse employment action against an employee, the employee has the ultimate burden to show that the proffered reason is simple a pretext for discrimination.  In this case, Morrison was unable to do so, because she was unable to provide any evidence that the actual decision-makers (senior management and the Assistant Director of Human Resources) had discriminatory reasons for suspending her, or that their decision was tainted or influenced by Morrison’s supervisor.   Further, Morrison was unable to provide any evidence to show that the ultimately decision-makers were actually aware of her internal complaint against her supervisor.

In order to prevail under the subordinate bias theory, an employee must show that an ultimate decision-maker gave only perfunctory approval for an adverse action that was explicitly recommended by a biased supervisor.   To avoid liability based on that theory, employers should develop and implement a multi-level review process of proposed disciplinary actions, and ensure full and objective documentation for such actions.