Friday, July 22, 2016

Cherry v. Siemens Healthcare Diagnostics: Discriminatory performance evaluations, cat's paw liability, and claim accrual

In Cherry v. Siemens Healthcare Diagnostics, Inc., No. 15-1930 (8th Cir. July 21, 2016), the court rejected Farrell Cherry's contention that it should apply the cat's paw theory of liability to his claim that he was selected for a reduction in force because of his race. In a cat's paw case, the final decisionmaker with respect to a challenged employment decision acts without discriminatory intent but he unwittingly relies on discriminatory input from a lower-level supervisor. Cherry contended that the cat's paw analysis applied to his case because, even if the Service Director acted without discriminatory intent, he selected Cherry for the RIF based on discriminatory performance appraisals prepared by Cherry's first-line supervisor. The court concluded that the cat's paw analysis did not apply to Cherry's claim because the first-line supervisor did not actually know, at the time of the allegedly discriminatory performance appraisals, of the planned RIF, and therefore, it was not possible for him to have used the Service Director as a "dupe in a deliberate scheme to trigger a discriminatory action."

Somewhat curiously, the Eighth Circuit did not cite the Supreme Court's cat's paw decision, Staub v. Proctor Hospital, 562 U.S. 411 (2011). The Supreme Court held in Staub that cat's paw liability applies when the lower-level supervisor intends for discriminatory reasons that the challenged adverse action occur. The Court left open the question of whether cat's paw liability applies when the lower-level official intends to cause a particular adverse action and instead causes a different one.

In my view, the Eighth Circuit's analysis is at least partly consistent with Staub. It appears under Staub that, if a lower-level supervisor's discriminatory act causes another individual to take an adverse action against a plaintiff, cat's paw liability does not apply unless the lower-level supervisor intended, at the very least, for some kind of adverse action to result. Thus, if a supervisor issues a discriminatory performance evaluation and years later, after the supervisor has long retired, the employer relies on the evaluation to take an adverse action, the cat's paw analysis probably does not apply because the link between the evaluation and the subsequent adverse action is too attenuated.

On the other hand, the Eighth Circuit perhaps applied cat's paw liability too narrowly by limiting it to cases of actual knowledge. The court acknowledged that the first-line supervisor may have been aware that a RIF was likely, but the court nevertheless concluded that cat's paw liability did not apply since the supervisor did not actually know of the planned RIF when he issued the allegedly discriminatory performance evaluations.

Aside from issues related to cat's paw liability, Cherry's claim arguably raises accrual issues that, for whatever reason, were not addressed by the court. In Green v. Brennan, 136 S. Ct. 1769 (2016), the Supreme Court held that a constructive discharge claim does not accrue until an individual has resigned. Therefore, the time frame for bringing a constructive discharge claim begins when an employee provides his employer with explicit notice that he intends to resign.

In Cherry's case, he was challenging a RIF that resulted from allegedly discriminatory performance evaluations. Courts have widely held that a discriminatory performance evaluation is not actionable in and of itself, and it only becomes actionable if it results in some material effect on employment, such as termination or loss of pay. Thus, if Cherry received discriminatory performance evaluations, he did not have an actionable claim until they had some materially adverse effect on his employment.

Cherry's case appears to be on all fours with Thomas v. Eastman Kodak Co., 183 F.3d 38 (1st Cir. 1999). In that case, Myrtle Thomas alleged that her layoff was discriminatory because it resulted from racially biased performance appraisals. The defendant contended that the plaintiff's claim was untimely because Thomas was challenging the performance appraisals, which had all been issued outside the limitations period. Disagreeing, the court held that the plaintiff's claim did not accrue until she was notified of her layoff. Prior to that date, the evaluations had caused no concrete harm, and therefore, her claim was timely since she was notified of the layoff within the limitations period.

Similarly, if Cherry was not harmed by the allegedly discriminatory performance evaluations until his RIF, then he should be able to challenge the RIF based on the principles espoused in Green and Thomas, regardless of whether cat's paw liability applies to his claim.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.