Seventh Circuit Expands § 1981 Coverage to Include Individual Liability for Retaliation Under “Cat’s Paw” Theory

The Seventh Circuit has held that an employee with an unlawful retaliatory motive may be individually liable under § 1981 for causing an employer to retaliate against a co-worker.  Section § 1981 prohibits racial discrimination in contractual relations and has been held applicable to employment matters.

In Smith v. Bray, the Seventh Circuit tackled this issue of first impression by looking to recent Supreme Court precedent endorsing the “cat’s paw” theory of employer liability under Title VII and the holdings of five circuits that the “cat’s paw” theory supports individual liability under § 1983, which provides redress for individuals whose federally protected rights have been violated.  As such, the Court held that “recognizing cat’s paw liability under § 1981 is consistent with our parallel approaches to these [non-discrimination] statutes.”

The “cat’s paw” theory, which was recognized by the Supreme Court in Staub v. Proctor Hosp., 131 S. Ct. 1186 (2011), says that an employer may be liable for discrimination under Title VII where an adverse employment decision is based on a biased or improperly motivated recommendation by a subordinate or supervisor.  “Cat’s paw” liability may be established where a plaintiff can show that an employee with a discriminatory purpose or bias provided information that may have affected an adverse action.  The theory comes from a French fable wherein a monkey (the biased employee) convinces a cat (the employer) to pull chestnuts from a hot fire.  The cat’s paw is then burned and the monkey enjoys the fruits of the cat’s labor.  In holding that the “cat’s paw” theory can support individual liability under § 1981, the court inquired, “Why should the ‘hapless cat’ (or at least the employer) get burned but not the malicious ‘monkey’?”

This decision is noteworthy not just because it endorses individual liability under § 1981, but also because it provides an arrow in a plaintiff’s quiver which is not available under Title VII as most circuits have held that an individual cannot be liable under Title VII.  As far as race discrimination is concerned, however, Smith v. Bray opens the door for suits against supervisors and co-workers under a “cat’s paw” theory.

New Jersey’s Highest Court Rejects “Absolute Liability” Standard for Employee Assault of Patient

The New Jersey Supreme Court in Davis v. Devereux Foundation, 209 N.J. 269 (2012), recently rejected an attempt to impose absolute liability against a residential health care facility for a criminal assault committed by an employee against a resident patient.  The Court determined that the facility should be held to the traditional reasonable duty of care towards its patients.   Further, the traditional “scope of employment” analysis should be applied to determine whether the employer could be held liable for the tortious conduct of its employee.

In Davis, a resident counselor employed by Devereux, a residential institution for the developmentally disabled, engaged in a pre-meditated act of aggression when she assaulted a residential patient by pouring boiling water on him.  The counselor was arrested and imprisoned for criminal assault, and the patient’s guardians obtained a default judgment against her for assault in the ensuing civil action.

The family also brought a civil action against the health care facility.  Reversing the trial court’s grant of summary judgment in favor of the facility, the Appellate Division remanded for trial and imposed an absolute liability standard on the employer under the common law “non-delegable duty” analysis, which imposes a duty on the master to protect those entrusted to its care in an in loco parentis relationship, such as a school or health care facility, and subjects the master to liability for the acts of its employees whenever they fail to meet their duty of care.  Under that common law approach, the non-delegable duty imposed on the employer cannot be satisfied by any level of care taken by the employer in hiring or supervision of its staff, but is based solely on the level of care taken by the employee.

The Supreme Court reversed and reinstated summary judgment in favor of the health care facility.  The Court observed that the “non-delegable duty” would unfairly impose absolute liability on the employer regardless of the level of care engaged in by the employer.  “Once an employee has committed a tortious act, the duty would effectively impose absolute liability upon residential institutions” even if the employer had acted reasonably in screening applicants and supervising its employees.

The Court instead determined that traditional principles of the duty of reasonable care should be followed with respect to the actions of employees of facilities responsible for in loco parentis care.  The Court observed that such facilities are expected to take reasonable measures to assure that their staff members are not endangering the safety of the patients entrusted to their care, and that liability for the tortious acts of their employees would be determined under traditional “scope of employment” principles.  Finding in this case that Devereux acted reasonably in screening individuals prior to hiring, and in supervising the relationship of its employees with the residential patients, the Court determined that the facility had met its duty of care to its patients.  The Court further determined that the counselor had acted far outside the scope of her employment in pouring boiling water on the patient where she acted out of personal anger and frustration, and not in any way to further the interests of her employer.