Oregon: Expanded “Cat’s Paw” Theory of Liability
|
APPLIES TO All Employers with OR Employees |
EFFECTIVE April 17, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
|
Discussion
Employers can still be liable for discrimination and retaliation where a biased individual sways the employer to make an adverse employment action. This is called the “cat’s paw” theory, which generally means that a decisionmaker who acted based on a non-decisionmaker’s influence, where the non-decisionmaker has a discriminatory intent, the employer of the decisionmaker can still be liable for employment discrimination. The non-decisionmaker typically must have significant influence over the decision that leads to an adverse action.
In McClusky v. City of North Bend, the Oregon Court of Appeals ruled that the “cat’s paw” theory of liability applies to joint employers regardless of whether the biased individual was subordinate to the co-employer’s decisionmaker or employed by the same entity. Here, an employee was hired as the Technology Systems Manager under an intergovernmental agreement between the cities of North Bend and Coos Bay, where Coos Bay reimbursed North Bend for 100% of the costs of the employee’s salary, benefits, and office space. However, the employee worked out of the North Bend Public Library and was supervised and evaluated by North Bend managers and human resources. The employee raised concerns about the Coos Bay Extended Services Office Director’s (Director) plan to move the local network to a cloud-based service through a process that was in violation of the laws of the district. The employee was also ordered to deliver IT information to an outside contractor, but he objected and was eventually terminated by North Bend’s human resources for insubordination and unprofessional conduct. The employee alleged whistleblower retaliation claims against North Bend.
The court reversed the trial court’s decision to dismiss the claims against North Bend due to the cat’s paw doctrine. The ruling was based on the theory that North Bend knew or should have known the Coos Bay Director’s alleged bias but failed to take corrective action. Therefore, the Director’s alleged bias could be imputed to North Bend. For the first time, the court ruled that the cat’s paw theory applies “when a supervisor for a joint employer is the allegedly biased employee, so long as the plaintiff produces evidence that the allegedly biased employee held influence over the adverse employment decision.”
In this case, the evidence showed the Director acted as the employee’s supervisor in connection with North Bend’s employees and held influence over the employee’s North Bend supervisor. The Director had been able to edit a North Bend performance improvement plan to say that the employee “has a tendency to incorrectly assume the worst about his colleagues, which often leads him to improperly accuse them of wrongdoing.” This created a genuine issue of material fact which should have allowed the case to proceed. The court also noted that North Bend could have taken corrective action without including the Director in its termination decisions. Oregon employers with contingent workers or staffing agreements should discuss their arrangements with legal counsel to determine potential liability for claims under this theory of liability.
Action Items
- Review joint employer agreements and relationships with legal counsel.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase