A recent SJC decision in MARK A. ADAMS vs. SCHNEIDER ELECTRIC USA rules on the “cat’s paw” theory of liability.  Companies considering a reduction in force should be familiar with this decision and should discuss their plans with qualified employment counsel.

What is the Cat’s Paw theory:

The “cat’s paw” theory of liability refers to a legal concept where an employer can be held responsible for discriminatory actions taken by its employees, even if those employees were not the ultimate decision-makers. In this theory, the employer is considered to be the “cat” and the employee who carries out the discriminatory action is the “paw.” The idea is that the employer may use or rely on the biased actions or recommendations of its employees to accomplish its discriminatory purposes. Under the “cat’s paw” theory, the employer can be held liable for discrimination, even if the decision-maker was not directly motivated by discriminatory intent.

The theory is based on a fable  in which a monkey convinces a cat to retrieve chestnuts from a fire, and then makes off with the finished product, leaving the cat with a burned paw and no chestnuts.

https://en.wikipedia.org/wiki/Cat%27s_paw_theory

More about the case:

Mark Adams sued his former employer, Schneider Electric USA, for age discrimination after being laid off in a 2017 reduction in force. Schneider Electric was initially granted summary judgment, but the Appeals Court reversed the decision. The Supreme Judicial Court granted further appellate review to clarify the summary judgment standards in employment discrimination cases. The court concluded that the grant of summary judgment was improper, as there was evidence to support the claim of a discriminatory corporate policy and the “cat’s paw” theory of liability.

Mark Adams produced several pieces of evidence to support his claim of age discrimination. First, he provided evidence that officials at Schneider Electric expressed a desire to increase “age diversity” in the company and specifically in the research and development (R&D) group where he worked. They wanted to hire recent college graduates and reduce the number of older employees.

Adams also presented evidence that his R&D group in Andover was targeted for layoffs while a younger R&D group in India was not. Human resources executives at Schneider Electric emphasized the need for age diversity and discussed making budget reductions to make room for younger employees.

Furthermore, Adams’s name appeared on a list that exemplified the policy of increasing age diversity, indicating that he was selected for the layoff based on his age. Additionally, statistical evidence showed that the layoffs had a disparate impact on employees over fifty years of age.

Overall, Adams provided evidence of discriminatory remarks by corporate executives, the targeting of his division for layoffs, and statistical evidence of age-based impact, all of which supported his claim of age discrimination

Tags: Cat's Paw, General Counsel, massachusetts supreme judicial court, reduction in force, RIF, SJC

A recent decision by the SJC holds that sales commissions can be wages within the meaning of the Massachusetts Wage Act, potentially subjecting employers to treble damages for failure to pay these amounts in a timely manner as required by the statute.   This case is called WEBER vs. COAST TO COAST MEDICAL, INC. et al.

The Court stated that while not all benefits fall within the term wages, commissions have been held to do so. The Court cited Section 148, which expressly states that holiday and vacation pay due under an agreement, as well as commissions that are “definitely determined” and “due and payable” to the employee, are wages within the meaning of the statute.  The Court approvingly cited earlier decisions, which reasoned the the legislative intent was “to apply the benefits of the statute to current-day employees as defined in the statute, including executives and professionals earning a substantial base salary plus commissions.”

This case serves as a clarification on this important point and a reminder to employers that commission plans should be in writing, and should clearly state any terms and conditions applicable to the amount and timing of the payments.

Tags: commissions, definitely determined, due and payable, massachusetts supreme judicial court, MGLC 149, s148, SJC, treble damages, Wage Act, wages