Littler Lightbulb – June Employment Appellate Roundup

Supreme Court Reverses Lower Court Rulings Requiring Higher Standard of Proof in Reverse Discrimination Cases

In Ames v. Ohio Dep’t of Youth Servs., 605 U. S. ___ (June 5, 2025), the Supreme Court considered whether a plaintiff who is a member of a majority group must meet a heightened evidentiary standard, showing “background circumstances” to establish a prima facie case of discrimination under Title VII. The case involved a heterosexual woman who was denied a promotion in favor of a gay woman and demoted from her position as a program administrator and replaced by a gay man. She filed suit alleging that she was denied the promotion and demoted because of her sexual orientation. The federal district court and the Sixth Circuit granted summary judgment for the employer holding that the plaintiff had not shown “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.”

Resolving a circuit court split, the Supreme Court reversed the Sixth Circuit and unanimously held that “this additional ‘background circumstances’ requirement is not consistent with Title VII’s text or our case law construing the statute.” Reviewing the statute and prior Supreme Court precedent, the Court emphasized that Title VII’s disparate-treatment provision does not distinguish between majority-group plaintiffs and minority-group plaintiffs and makes it unlawful to discriminate against any individual. The “background circumstances” rule disregards this standard, the Court found, by requiring majority-group plaintiffs in reverse discrimination cases to provide additional evidence that would not otherwise be required of minority-group plaintiffs to make out a prima facie case.

Supreme Court Holds ADA and Rehabilitation Act Discrimination Lawsuits Against Public Schools Also Do Not Face Heightened Standard of Proof 

In another case assessing the standard of proof in discrimination cases, in A.J.T. v. Osseo Area Schools, ___ U.S. ___ (June 12, 2025), the U.S. Supreme Court unanimously held that students bringing ADA and Rehabilitation Act lawsuits against public schools do not face a higher standard of proof than plaintiffs bringing discrimination lawsuits against other institutions. The case involved a student who required scheduling accommodations to deal with severe epilepsy and cognitive deficits. When school administrators denied the student’s requested accommodations, the student and her parents sued the school district, alleging disability discrimination. The Eighth Circuit granted summary judgment to the school district because, it held, the plaintiffs had not shown that school officials acted with “bad faith or gross misjudgment.” That standard, which was set forth in Monahan v. Nebraska, 687 F.2d 1164 (8th Cir. 1982), in a case under the Individuals with Disabilities Education Act (IDEA), “applies uniquely in the educational services context and requires a more demanding showing compared to other sorts of disability discrimination claims,” the Eighth Circuit stated.

The Supreme Court reversed, noting that in 2004 Congress amended the IDEA to explicitly state that it should not be “construed to restrict or limit the rights, procedures, and remedies,” available under the ADA, Rehabilitation Act, and other applicable laws. Disabled students “face daunting challenges on a daily basis,” the Court stated. “We hold today that those challenges do not include having to satisfy a more stringent standard of proof than other plaintiffs to establish discrimination under Title II of the ADA and Section 504 of the Rehabilitation Act.”

Supreme Court Assesses Whether Disabled Retirees are Qualified Individuals under the ADA

In another decision regarding the ADA, Stanley v. City of Sanford, ___ U.S. ___ (June 20, 2025), the Supreme Court considered whether an employee who retires due to disability is a “qualified individual” under the ADA. The plaintiff in the case challenged the employer’s health insurance policy, which provided two years of health insurance benefits to employees who retired due to a disability compared to benefits to age 65 for employees who retired after 25 years of service. The plaintiff, who retired with less than 25 years of service due to a disability, filed suit under the ADA when her benefits expired, claiming her employer discriminated against her because of her disability. The Eleventh Circuit dismissed the case, and the plaintiff appealed to the Supreme Court.

Like the court below, the Supreme Court focused on the language of Title I of the ADA, which prohibits discrimination against “qualified individual[s]…who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” Because the plaintiff filed suit when she was retired and no longer held a job or was seeking a job, the Court held that she was not a “qualified individual” under the terms of the ADA and upheld the dismissal. The decision resolves a split among the circuit courts, with the Second and Third Circuits holding that disabled retirees are covered by the ADA, and the Sixth, Seventh, and Ninth Circuits holding they are not.

Seventh Circuit Affirms Denial of Benefits for Insufficient Evidence of Disability 

Oye v. Hartford Life and Accident Insurance Co., __ F.4th __ (7th Cir. June 12, 2025) involved denial of a claim for long-term disability benefits under ERISA by an employee who claimed her fibromyalgia prevented her from working. The district court found that the extensive medical evidence did not support the plaintiff’s claim and granted judgment to the insurer. The plaintiff appealed and the Seventh Circuit affirmed the district court’s judgment. 

Reviewing the medical evidence, the Seventh Circuit agreed with the district court’s finding that the letters from the plaintiff’s treating physicians were unpersuasive. The court reasoned that the letters did not explain why the plaintiff’s medical conditions would cause serious functional limitations and seemed inconsistent with the same physicians’ clinical notes. In contrast, the court found, the reports from the insurer’s consulting physicians tied each of their conclusions to portions of the plaintiff’s medical records. Describing the standard of proof in a claim for benefits, the Seventh Circuit stated that the plaintiff has the burden of proving entitlement to the benefits, and “any gaps in the record cut against her claim.” The court concluded that “the district court’s decision easily satisfies these standards.”

D.C. Circuit Rejects NLRB’s Denial of a Negotiating Impasse

In Troy Grove v. National Labor Relations Board, __ F.4th __ (D.C. Cir. June 13, 2025), the D.C. Circuit refused to enforce the NLRB’s finding that the employer violated its duty to bargain in good faith when it declared an impasse in contract negotiations. The sticking point in the negotiations involved a contractual provision, to which the union would not agree, allowing the company to withdraw from a multi-employer pension fund. 

Rejecting the Board’s conclusion that the company and the union were not at impasse, the D.C. Circuit stated that “[t]he Board’s decision is not supported by substantial evidence and its legal analysis is irrational.” In support of its conclusion, the court reviewed the bargaining history in the case, including the fact that the parties met face-to-face at least 26 times over a five-year period without reaching an agreement. In addition, even after declaring that they were at impasse, the company did not implement its “last, best, and final” proposal to cease contributing to the pension fund and continued to bargain with the union. Thus, the court found, the Board’s ruling was not supported by the “substantial evidence” standard required in such cases, and was, in fact, “not supported by any evidence.” Citing its prior holdings, the court concluded: “A union official’s denial that an impasse exists, combined with a new negotiating proposal that does not meet the employer’s position, does not rebut an impasse.”

First Circuit Finds ERISA Preempts State Law Claims for Termination to Avoid Paying Severance Under ERISA Severance Policy

Orabona v. Santander Bank, __ F.4th __ (1st Cir. June 16, 2025) involved a bank loan officer who was terminated from employment for violating the company’s client privacy policy and was therefore not eligible for severance benefits under its ERISA Severance Policy. The plaintiff filed claims under state law alleging that the bank terminated her employment to avoid paying her severance benefits under the policy.

Affirming summary judgment for the employer, the First Circuit held that all of the plaintiff’s claims were statutorily preempted by ERISA, “which states that ERISA ‘shall supersede any and all State laws insofar as they may now or hereafter relate to any’ ERISA plan.” The court examined plaintiff’s claims and found that they fell squarely within the scope of ERISA. “The Supreme Court, this court, and our sister circuit courts have held that state law claims were ‘related to’ ERISA,” the court stated, “where the employer is alleged to have taken actions to prevent the employee from receiving ERISA plan benefits.”

Eighth Circuit Reverses NLRB for Disregarding Subjective Evidence That Was Relevant to Allegations a Company Manager Threatened or Interrogated an Employee 

In Starbucks Corp. v. National Labor Relations Board, __ F.4th __ (8th Cir. June 17, 2025), the Eighth Circuit reversed the NLRB because it applied an incorrect legal standard to allegations a company manager violated Section 8(a)(1) when she allegedly threatened and interrogated an employee during a conversation about a union organizing campaign. The court stated that an “alleged threat or interrogation is not viewed in a vacuum” and must be examined in light of “the totality of the circumstances.” The Eighth Circuit held that the NLRB erroneously disregarded as “immaterial” evidence of “[t]he actual intent of the speaker or the effect on the listener.” Rather, the court emphasized the importance of weighing such subjective evidence when determining whether a reasonable employee would objectively be coerced not to exercise their right to engage in concerted activity because of the employer’s conduct.

Here, the manager did not raise her voice during the meeting, which the employee described as “calm” and mere “venting.” The employee did not claim to feel “chilled from speaking” or from supporting the union, and she did not face any discipline or adverse consequences following the meeting. In fact, the court stated, the record did not reflect any instances of other employees feeling threatened, interrogated, or chilled from speaking. Further, the employee opined that the manager’s statements about the impact of unionization on wages at another store were not “relevant” to her. Based on all these factors, the Eighth Circuit reversed and remanded the case to the Board.