Supreme Court to examine HR's role in termination

By Allen Smith Jan 18, 2007
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A rubberstamped recommendation to discharge will get a second look by the U.S. Supreme Court in a case involving HR’s role in termination decisions. The Supreme Court announced on Jan. 5 that it will review several HR-related cases, including whether BCI Coca-Cola Bottling Co. of Los Angeles is liable under Title VII for an HR professional’s decision to fire a black merchandiser, based solely on an allegedly biased supervisor’s recommendation.

The U.S. Equal Employment Opportunity Commission (EEOC) sued BCI on behalf of Stephen Peters, a black man employed as a merchandiser who claimed that his supervisor, a Hispanic district manager, subjected black employees to greater scrutiny and more serious discipline than others. A number of co-workers said they shared this view.

After the supervisor learned on Sept. 28, 2001, that another merchandiser who covered extra shifts was injured, the supervisor asked Peters to work on a Sunday, but Peters refused. The supervisor, who did not have authority to fire, met with an HR manager who had not met or heard of Peters, telling her that Peters planned to call in sick rather than work on Sunday. The HR manager recommended that the supervisor tell Peters to report to work and inform him that failure to do so would be grounds for discharge, which the supervisor did. After Peters did not work on Sunday, he was fired.

‘Cat’s paw’ theory

Peters filed a charge with the EEOC, which argued that BCI should be liable for the discharge under the “cat’s paw” theory.

The theory’s name is derived from a fable about a monkey that persuades a cat to pull chestnuts for it out of a fire, burning the cat’s paws in the process, Maria Greco Danaher, an attorney with the firm of Dickie, McCamey & Chilcote in Pittsburgh, told HR News. She said this case was the proverbial “cat’s paw” fact pattern, because the supervisor allegedly used the HR manager as “an unwitting dupe” by giving a legitimate reason for discharge when the real motive purportedly was unlawful racial bias.

The district court dismissed the case, but the 10th Circuit reversed ( EEOC v. BCI Coca-Cola Bottling Co., No. 04-2220 (10th Cir. 2006)). Danaher predicted that the Supreme Court would uphold the 10th Circuit, which adopted the cat’s paw theory.

BCI’s defense that the HR manager didn’t know Peters was black “blew up in its face,” according to Danaher, because that information was in the personnel file, which the HR manager apparently didn’t check. Danaher said the HR manager should have conducted a full and fair investigation, at least talking to the employee to get his or her side and being “the most neutral of all decision-makers.”

However, Manesh Rath, SPHR, a member of the Society for Human Resource Management Employee Health, Safety & Security Special Expertise Panel, told HR News that he did not think that it was fair to attribute to an employer the discriminatory animus of a supervisor if HR has rubberstamped a supervisor’s recommendation to terminate without knowledge of the discriminatory motive. How can a court conclude that there was discriminatory intent if the employer had no knowledge of discriminatory content or conduct, asked Rath, who is a lawyer with Keller and Heckman LLP.

Rath noted that the case raises questions about when employees act as employer’s agents. Supervisors with authority to terminate or promote might be viewed as agents of the employer. And a supervisor without authority to fire still might be an agent if the supervisor’s recommendations to terminate were rubberstamped. But if HR does not give this authority away to supervisors and makes an independent determination of whether to accept termination recommendations, the employer will have greater legal protection.

If objective reasons are put forward by a supervisor to fire someone, a best practice for HR would be to take “a quick look at the personnel file” to see if there is documentation of, for example, a performance problem or trouble with excessive absenteeism, Rath agreed. If the reason is subjective—such as behavior that leads or may lead to difficulties with clients—the HR professional might have little choice but to credit the supervisor’s account. But HR at least should question whether anyone else was present whom it might contact, or whether there were e-mails or written correspondence, according to Rath.

“HR managers ought to view themselves as the guardians of the employer’s interest to be fair and comply with laws,” Rath said. “A supervisor is a guardian of a team” and should be considering whether the elimination of one person from the team may make it stronger, he added. Rath remarked that the case “is extremely important for employers to take note of and will have a substantial impact on the role HR managers play.”

Domestic service exemption

In addition, the Supreme Court agreed on Jan. 5. to review an appeals court ruling ( Long Island Care at Home Ltd. v. Coke, 462 F.3d 48 (2d Cir. 2006)) that agency home health employees are not covered by the domestic service exemption. The U.S. Department of Labor (DOL), by contrast, said in an opinion letter that they are exempt.

The DOL interpreted the exemption to apply to those workers who come to the household by way of an agency, not just babysitters or child care workers employed by the household directly, Rath noted in an interview. Like the BCI termination case, this exemption case raises employer agency issues, he commented. Rather than turning on substantive Fair Labor Standards Act (FLSA) issues, the case is likely to focus on the level of deference courts should give to DOL interpretations, Rath explained.

Rath predicted that the decision will have “a huge potential impact” on the at-home nursing industry, as well as staffing and temporary agencies. “It’s important for HR managers to stay up to date” regardless of the industry of their current employers because “they do not know what company they may be with next,” he said.

$1.5 million award vacated

In a separate case that will impact the railroad industry, the Supreme Court decided on Jan. 10 that when an injured railroad employee sues under the Federal Employers’ Liability Act (FELA) for negligence, the same standard should be used for determining a railroad’s negligence as for an employee’s contributory negligence .

When the Missouri Court of Appeals considered the FELA claim of Timothy Sorrell, a Norfolk Southern Railway Co., trackman who injured his neck and back, it instructed the jury that the railroad would be negligent if its negligence contributed in whole or in part to the injury. The jury received instructions on the standard for an employee’s contributory negligence that were more favorable for Sorrell—contributory negligence was present only if his negligence directly resulted in injury. The word “directly” was removed from the railroad’s negligence causation standard, explained Steven Loewengart, an attorney with Squire, Sanders & Dempsey LLP, in an interview.

The jury came back with a $1.5 million award for Sorrell, which the Supreme Court vacated, remanding the case for further proceedings (Norfolk Southern Railway Co. v. Sorrell, No. 05-746 (U.S. 2007)).

Allen Smith, J.D., is SHRM’s manager of workplace law content.

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