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Subordinate bias case pulled from high court

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WASHINGTON—The U.S. Supreme Court's dismissal of an employment discrimination case that asked when an employer can be held liable for a subordinate manager's alleged racial bias in firing an employee almost guarantees the high court will revisit the issue soon, say employment law experts.

The April 12 dismissal of BCI Coca-Cola Bottling Co. of Los Angeles vs. the Equal Employment Opportunity Commission came less than a week before the high court was scheduled to hear oral arguments. BCI requested the dismissal, according to the EEOC.

"The Supreme Court dismissed the case at the request of the petitioner, BCI," said the EEOC's general counsel's office in a statement. "The motion represented the unilateral decision of the petitioner and does not involve any settlement or any agreement between the parties. We expect that the case will be remanded to the district court in New Mexico for further proceedings, consistent with" the 10th U.S. Circuit Court of Appeals' decision.

A spokesman for the company declined to comment because the litigation has yet to be resolved.

The case involved Stephen Peters, a black employee of BCI who had refused to work overtime when ill (BI, Jan. 15). His immediate supervisor, who allegedly had made racially disparaging remarks, asked a human resources manager hundreds of miles away how to resolve the situation. The HR manager, who had never met Mr. Peters and did not know his race, approved the termination without investigating the situation on her own, relying instead on the immediate supervisor's comments, according to court records.

Mr. Peters filed a complaint under Title VII of the Civil Rights Act of 1964. A district court dismissed the case, but it was reinstated by a three-judge panel of the 10th U.S. Circuit Court of Appeals last year, whose decision hinted that employers could protect themselves by vigorously investigating such situations.

Gerald L. Maatman Jr., a partner at Seyfarth Shaw L.L.P. in Chicago, noted that courts have split over the issue of liability for subordinate bias--or so-called "cat's paw liability"--and that other cases involving the issue are working their way through the legal system.

"It is highly likely that the issue of cat's paw liability will be decided soon by Supreme Court. It seems to me if they took it up in BCI Coca-Cola, it's more than likely they're going to take it up in one of these cases due to the split in the circuits," he said.

"While I think the employment bar, both plaintiffs' and defendants' side, were eagerly expecting some guidance from the Supreme Court on this issue, there are other cases currently in the pipeline that present the same issue for consideration," said Charles Jellinek, partner in the St. Louis office of Bryan Cave L.L.P.

"If they felt this issue was right for consideration in January when they granted cert (in the BCI case), it's still right now. That's why I think they will address it soon," said David Nagle, partner at Jackson Lewis L.L.P. in Richmond, Va. "While the circuits are not in direct conflict, they have come down at various points along a sliding scale, from a lenient standard to others requiring proof of a substantial impact."

"The 10th Circuit decision suggests a middle-of-the-road position: If the employer undertakes an investigation, they may be able to avoid liability," said Philip Berkowitz, partner at Nixon Peabody L.L.P. in New York. "The Supreme Court hasn't been decidedly pro-business in employment cases; they are not likely to hold that an employer should be shielded from liability even though the decision-maker did not have direct knowledge of the employee's protected status. Instead, the Supreme Court is likely to take a middle of the road position, as did the 10th Circuit."