I was alerted to today’s case, Bledsoe v. Tennessee Valley Authority Board of Directors, a published decision from the Sixth Circuit decided on July 27, 2022, by Jon Hyman, the person behind the Ohio Employers’ Law Blog, who blogged on the case here. As is often the case, I don’t mind blogging on cases blogged upon by others if I feel like I can offer another perspective. So, here goes. As usual, the blog entry is divided into categories and they are: facts; majority reasoning that §501 causation is not the same as §504 causation; majority reasoning that the honest belief rule only goes so far and does not come into play when Cat’s Paw is involved; majority’s reasoning that district court incorrectly dismissed plaintiff’s retaliation claim; dissenting opinion; and thoughts/takeaways. Of course the reader is free to focus on any or all of the categories. As a side note, the majority opinion spends quite a bit of time on direct evidence and indirect evidence (we have talked about the direct evidence and indirect evidence conundrum before, such as here), but we are not going to get into that in this blog entry as it isn’t necessary for the issues that I want to zero in on.

I

Facts

In May 2015, the Committee appointed Bledsoe to be an NSGPO instructor. In that role, Bledsoe developed lessons, exams, and course materials. Bledsoe collaborated with both licensed and non-licensed instructors in all the training programs. Jeremy Bailey oversaw Bledsoe’s day-to-day activities in the non-licensed training program. Beginning in January 2017, Christopher Dahlman, Bailey’s supervisor, managed all training programs at the Sequoyah Training Center as the Operations Training Manager.

Bledsoe took medical leave in October 2016 to manage his liver cirrhosis. In February 2017, Bledsoe returned to work after receiving a liver transplant. Bledsoe’s condition required him occasionally to use a cane and to take medications, which he kept on his desk.

Shortly after Bledsoe returned to work, Dahlman began to comment on Bledsoe’s health and age.  Beginning in April 2017 and continuing into January 2018, Dahlman berated  Bledsoe about his disability and pressured him to retire.  The following incidents are only some examples of Dahlman’s behavior:

• After asking Bledsoe to show him his progress in updating lesson plans, Dahlman told Bledsoe, “if you’re not at 100 percent, I can’t use you.” Dahlman then asked Bledsoe about the medications that Bledsoe kept on his desk. When Bledsoe explained that the medications treated his liver condition, Dahlman repeated, “[y]ou’ve got to be 100 percent for this job.” This was not the only time that Dahlman asked Bledsoe about his medications and their effect on his job.  One day, after asking Bledsoe to remove his medications from his desk, Dahlman asked Bledsoe, “[j]ust how disabled are you?”

• While discussing lesson plans in November 2017, Dahlman again asked Bledsoe, “[a]re you 100 percent yet?” When Bledsoe responded that he was “getting there,” Dahlman replied, “[t]hat’s not good enough … I’m tired of disabilities and I’m tired of medical problems.”

• Dahlman asked Bledsoe whether he had other disabilities, demanded that Bledsoe tell him about them “in detail,” and asked Bledsoe whether he was “eligible for disability.”  After Bledsoe told Dahlman about some of his medical problems, Dahlman responded that he was not “running a rehabilitation clinic.”

• Dahlman asked Bledsoe his age and told him numerous times that he should consider retiring.  These suggestions eventually turned into a command. Dahlman told Bledsoe, “you need to go ahead and retire…. I’m concerned about this disability you have, your condition with your liver.”

• In October 2017, after asking about Bledsoe’s lesson planning progress, Dahlman commented, “I think your disability is slowing all this down…. You’re really too old to be doing this.”

• In January 2018, Dahlman questioned Bledsoe’s ability to teach. Again, after discussing Bledsoe’s lesson-plan progress, Dahlman asked, “Are you even going to be able to teach? … I wouldn’t think with your condition and—your medical condition and your age that you would want to teach.”

• Dahlman also warned Bledsoe multiple times not to “piss [him] off,” telling Bledsoe that he was “vindictive” and “not patient. On one occasion, Dahlman told Bledsoe, “if you piss me off, you’re not going to be working over here. I’m just telling you.”

TVA employees observed Dahlman make similar comments related to age or disability about Bledsoe and others.

When plaintiff’s son applied for a position and classes, that created a possible conflict of interest. Plaintiff alerted his employer about that possible conflict of interest. Instead of seeking an opinion regarding the possibility of transferring the plaintiff to a different program or having him teach another non-licensed training class that his son was not in, he was told that such a transfer was not a viable option. Eventually a committee met, which included the person, Dahlman, who had made the series of disparaging comments against him, noted above, and the committee decided to demote him and reduce his salary by $28,000. Plaintiff then filed a formal complaint with the TVA’s equal opportunity commission and then a complaint in court alleging violations of the Age Discrimination in Employment Act as well as the Rehabilitation Act. District court granted summary judgment for the employer and plaintiff appealed.

II

Majority (Judge Moore) Opinion That §501 and §504 Causation Are Not the Same

1. Understanding the differences between §501 and §504 of the Rehabilitation Act means examining the Rehabilitation Act’s structure and history.
2. The first version of §501 required that federal agencies adopt affirmative action plans to hire and advance opportunity for individuals with disabilities.
3. 504 prohibits private entities receiving federal funds from discriminating solely by reason of the disability.
4. Although neither §501 nor §504 contained a private cause of action for federal employees at the time of enactment, all courts interpreting the Rehabilitation Act read an implied right of action into §504 but not into §501. To remedy that situation, Congress then codified a private right of action for federal employees under §501 but could have been more clear when doing so. In particular, the Senate added §504 to the Rehabilitation Act, what is now known as 29 U.S.C. §794a, which extended the remedies under title VII of the Civil Rights Act of federal employees bringing claims under §501. The Senate amendment also extended the remedies available under title VI of the Civil Rights Act to claims brought under §504. Finally, the House amendment extended §504 to any program or activity conducted by an Executive agency or by the United States Postal Service from discriminating solely by reason of disability. When strengthening the two provisions of the Rehabilitation Act, Congress could have chosen to eliminate the partial overlap between the two, but decided not to despite the overlap.
5. In the Sixth Circuit, it has long held that persons alleging disability discrimination in employment may maintain private cause of action against their employers under both §501 and §504 of the Rehabilitation Act.
6. The Fifth Circuit has addressed causation with respect to §501 and §504 and is the only circuit to do so. The Fifth Circuit noted that §501(f) incorporates the standards of title I of the ADA to determine whether §501 had been violated and therefore applies the ADA’s causality standard to §501 claims. The Fifth Circuit noted that the ADA, which was passed in 1990, excludes the federal government from coverage. The 1992 Rehabilitation Act amendments sought to expand ADA protection to federal employees. The Fifth Circuit also noted that the EEOC regulations implementing §501 of the Rehabilitation Act incorporate ADA standards.
7. Causality is clearly a standard used to determine whether §501 has been violated so §501(f) of the Rehabilitation Act instructs the court to apply ADA causality standards. In other words, §501 of the Rehabilitation Act already describes the standard for causation.
8. 501 and §504 of the Rehabilitation Act sensibly employ different causality standards because they are distinct sections of the Rehabilitation Act.
9. The Supreme Court has recognized the distinction between §501 and §504 when it held that a plaintiff could recover monetary damages against the federal government under §501 but not §504 because Congress only waived its sovereign immunity with respect to §501.
10. 501 and §504 have different purposes. §501 imposes affirmative action obligations going beyond the obligations set forth in §504 which only requires nondiscrimination.
11. The affirmative action duty Congress chose to impose upon only federal employers under §501 means it is easier for federal employees to prove discrimination then for private employees.
12. Considering Congress’s “belt and suspenders,” approach to expanding federal employee rights, the majority opinion declined to hold federal employees to a more stringent causality standard than employees of private entities receiving federal funding.
13. Congress has clearly delineated two separate causes of actions under two separate provisions of the Rehabilitation Act. Under §501, but for is the causation standard.

III

Honest Belief Rule Does Not Extend to Situations Where Cat’s Paw Is Involved

1. The honest belief rule does not result in a get out of jail free card for every employment discrimination action.
2. Applying the honest belief rule only makes sense when a plaintiff relies solely on an irrational basis for an employer’s action to demonstrate pretext.
3. In this case, plaintiff relies both on the existence of reasonable alternatives to the demotion as well as on evidence of a particular employees negative animus and influence on the committee that made the ultimate decision under a cat’s paw theory.
4. When a plaintiff invokes the cat’s paw theory, the honesty or the sincerity of the decision-maker’s belief is irrelevant. Instead, what is relevant is that the belief is rooted in a biased recommendation. Indeed, a cat’s paw theory is premised upon an unbiased decision-maker and therefore always involves a decision-maker with sincere beliefs.
5. Another way to look at it is that the honest belief rule not defeat a cat’s paw theory because the bias of the influencing employee influences the otherwise neutral decision. It therefore follows that an employer may still raise the honest belief rule if the decision-maker conducts an in-depth and truly independent investigation showing that the adverse action is warranted for reasons unrelated to the bias. Such an independent investigation defeats a cat’s paw claim only when the investigation determines that the adverse action was apart from the supervisor’s recommendation, entirely justified.
6. To the extent that the decision-making committee investigated alternatives, the participation of the employee who made the disparaging comments negates any such independence and foreclosed its application of the honest belief rule.
7. Plaintiff also offered evidence that other instructors had sons entering various training programs and were not subjected to an ethics inquiry much less demoted. Whether this particular evidence is sufficient to demonstrate pretext, will mean the plaintiff showing that the comparator is similar in all relevant respects and is a jury question. The evidence produced by the plaintiff, which showed that the licensing and non-licensing programs were similar in all relevant respects, certainly passes that bar for a jury to consider it.

IV

Majority’s Reasoning That The District Court Incorrectly Dismissed Plaintiff’s Retaliation Claim

1. To establish a claim for retaliation, a plaintiff has to show: 1) he was engaged in a protected activity; 2) the defending party was aware that the plaintiff had engaged in that activity; 3) the defending party took an adverse employment action against the employee; and 4) there is a causal connection between the protected activity and the Emperor’s action.
2. Plaintiff produce both evidence of temporal proximity as well as other evidence of retaliation. For example, only three months passed between plaintiff’s complaint and his demotion. Plaintiff also offered several statements showing discriminatory animus. So, a reasonable juror could believe that testimony and conclude that retaliation motivated one of the committee members to influence the others.
3. With respect to pretext, the same facts supporting plaintiff’s discrimination claims also supported the retaliation claim.

V

Dissenting Opinion by Judge Nalbandian

1. Cat’s paw theory of liability is not involved in this case.
2. Agrees with the principle that the cat’s paw theory when it is involved defeats the honest belief rule.

VI

Thoughts/Takeaways

1. This is not the first time we have brought up the issue in the blog about whether §501 causation and §504 causation on the same. In this blog entry we talked about a decision written by now Justice Brown-Jackson when she was a district court judge where she conflated §501 and §504 causation.
2. Interesting that the case does not talk about hostile work environment, which certainly seems to have been part of the situation here, as Jon clearly zeros in on in his blog entry.
3. Cat’s paw theory when it applies knocks out the honest belief rule.
4. In this case, you have both discrimination based upon a disability as well as retaliation. Retaliation is a claim that can stand by itself even where you do not have discrimination based upon a disability.
5. Independent investigation means exactly that. An employer would be wise to remove employees that are part of the situation from any committee deciding an employee’s fate.
6. Yesterday, the Supreme Court heard oral arguments on two cases involving whether universities can use racial preferences in admissions. Depending on how those cases are worded in terms of their final decisions, which is very likely to go against use of race in admissions, one wonders what impact that will have on the federal contracting universe. Also, the affirmative action requirement of §501 plays a significant role in the majority opinion. One then also wonders about the effect of the upcoming affirmative action decisions with respect to the issues discussed in this blog entry.