Nashville-based attorneys at Miller & Martin learned Friday that the U.S. Supreme Court has agreed to hear an appeal from client BCI Coca-Cola Bottling Company of Los Angeles, which is defending itself against a race discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission.
Lead attorney Todd Presnell told NashvillePost.com yesterday that the Supreme Court's response to arguments scheduled for April "will shape human-resources policies across the country, once this is decided."
BCI is a subsidiary of Atlanta-based Coca-Cola Enterprises Inc., a publicly traded company with 73,000 employees and roughly $20 billion in annual revenue.
In their petition asking the Supreme Court to hear the case, Presnell and fellow Miller & Martin attorney Kara Shea asked the court review the question of "under what circumstances is an employer liable under federal anti-discrimination laws based on a subordinate's discriminatory animus," when the ultimate decision-maker — in the BCI case a human-resources executive located hundreds of miles away in another city — "harbored no discriminatory motive" in the matter.
On Jan. 5 the Supreme Court, in effect, chose the BCI case over three other lawsuits that also bring into question the widely acknowledged split among U.S. Circuit Courts in applying widely varying legal standards for deciding issues related to subordinate bias liability — customarily referred to as "cat's-paw" or "rubber-stamp" liability. The cat's-paw reference flows from a fable often attributed to Aesop, in which a monkey dupes a cat into retrieving roasting chestnuts from a fire, with the cat suffering singed fur, while the monkey devours the nuts. It is often alleged that more senior executives are duped by subordinates into taking discriminatory actions, in which the higher-ups had no prejudice.
The high court has not yet set a date for oral arguments. Its summary of the case is available at this link.
Presnell, who will be making his first Supreme Court argument at age 37, said the justices' review could lead to a single standard being employed among the nation's 12 federal circuit courts, and, if unfavorable toward employers, that standard could mean that human-resources and other executives operating at a remove from disputed incidents would be more vulnerable to charges their decisions were influenced by subordinate employees' discrimination. One result could be a greatly increased need to investigate each allegation, exhaustively.
Other sources indicate that the outcomes of investigations and court proceedings are often clouded by disputes over psychological and cultural factors that may affect employee communications and motives.
Presnell noted the issue often arises in discrimination cases involving employers that have established centralized policy and authority for firing employees and similar matters. The standards issue is particularly important for companies with multiple management layers, operating across multiple jurisdictions.
BCI's appeal to the Supreme Court followed an action last June in which the Denver-based U.S. Court of Appeals for the 10th Circuit reversed an earlier decision by the U.S. District Court for the District of New Mexico, which had dismissed the EEOC lawsuit, citing insufficient evidence that a BCI corporate human resources executive had acted as a "rubber stamp."
A driver in the case is the alleged racial prejudice of Arizona-based BCI supervisor Cesar Grado, who had reported to higher-ups several instances in which Stephen Peters, who is black, had refused to work on days Grado requested. Ultimately, Phoenix-based human-resources supervisor Pat Edgar decided to terminate Peters, later explaining that, based on reports from Grado and others, Peters' behavior during the dispute had on at least one occasion been insubordinate.
Following Stephens' 2001 filing of an EEOC complaint, in which he alleged that certain BCI Hispanic and other non-African-American workers had been treated better than he under similar circumstances, the EEOC filed suit, citing violation of Title VII of the Civil Rights Act of 1964. Peters is not personally suing, but he could receive compensation if the EEOC prevails. Presnell said he does not know why Peters is not in the lawsuit himself.
The Coca-Cola Company owned about 36 percent of Coca-Cola Enterprises stock at the end of 2005. CCE bottles and distributes at much as 80 percent of all Coke beverages sold in North America. Miller & Martin has served as CCE's corporate counsel since 1991. The law firm served Johnston Coca-Cola Bottling Company from approximately 1960 until Johnston's acquisition by CCE in 1991.