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Employers can’t skimp on complaint probes

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Employers can’t skimp on complaint probes

Employers are being encouraged to conduct more thorough investigations of workers’ complaints about their colleagues in light of a recent appellate court ruling that expands firms’ potential liability if they mistakenly respond to inaccurate information.

Experts anticipate there will be increased litigation against employers because of an August ruling by the 2nd U.S. Circuit Court of Appeals in New York in Andrea Vasquez v. Empress Ambulance Service Inc. The court found that employers can be held liable for an adverse employment decision that was influenced by a low-level, nonsupervisory co-worker’s discriminatory or retaliatory intent.

The Vasquez case involves an emergency medical technician who had complained she was sexually harassed by a dispatcher, but was terminated herself by their employer after the dispatcher allegedly manufactured evidence to show she had consented to and solicited a sexual relationship with the harasser.

The ruling expands the U.S. Supreme Court’s 2011 “cat’s paw” decision in Vincent E. Staub v. Proctor Hospital, which held employers must conduct a thorough investigation before taking an adverse action based on a supervisor’s report to be sure it had not been motivated by discrimination.

The “cat’s paw” label is based on the Aesop fable in which a clever monkey flatters a naive cat into pulling roasting chestnuts out of a roaring fire for both of them, but then eats all of them himself, leaving the cat with only a burned paw for its trouble.

The high court left unaddressed, however, the question of cases in which the report comes from a lower-level employee rather than a supervisor. The 2nd Circuit ruling expands the high court’s ruling to include these workers as well.

Experts say that while the Staub ruling was based on the Uniformed Service Employment and Reemployment Rights Act of 1994, it is also applicable to discrimination and retaliation lawsuits filed under Title VII of the Civil Rights Act of 1964.

The ruling is a logical extension of the Staub case and likely to be influential with other courts, said Robin E. Shea, a partner with Constangy, Brooks, Smith & Prophete L.L.P. in Winston-Salem, North Carolina.

“The decision is notable for how deep into the organization the court is willing to reach in order to find somebody with a biased view” who can taint the employer’s decision-making, said Joseph Baumgarten, a partner with Proskauer Rose L.L.P. in New York.

It exposes employers to liability if they did not exercise due diligence “to a degree that would expose the motivations” of the worker providing the information, said Paula N. Anthony, an attorney with Berchem, Moses & Devlin P.C. in Milford, Connecticut.

“This is going to lead to more employers having more of their judgments questioned, and you’ll see mini-trials” that are not about the actual conduct itself, but the employer’s response to it, said Richard R. Meneghello, a partner with Fisher & Phillips L.L.P. in Portland, Oregon.

Many decisions will have to be made as to who should be interviewed and on how to resolve credibility disputes, and on how far to go in reviewing documents and emails, Mr. Baumgarten said.

“And they need to investigate not only the information that they’re being provided, but also what the motives of the person that is bringing them the information might be, and whether those motives might be discriminatory or retaliatory,” said Brian D. Hall, a partner with Porter Wright Morris & Arthur L.L.P. in Columbus, Ohio.

The ruling “imposes a pretty high standard on conducting an investigation, and so I think the employer’s mere acting in good faith is not going to be enough anymore to avoid liability,” said Philip M. Berkowitz, a shareholder with Littler Mendelson P.C. in New York.

But Mr. Baumgarten said, “The decision preserves the shield for an employer who acts in good faith in a non-negligent manner.”

If an employer makes a decision based on an independent analysis, “even if they get it wrong, they’re in a much better position to defend it,” said Bayardo E. Alemán, a shareholder with Stearns Weaver Miller Weissler Alhadeff & Sitterson P.A. in Miami.

 

 

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