DOL Formally Restores 2019 White Collar Exemption Levels Under FLSA

Yesterday, the DOL announced that it was formally revising the federal regulations published in the Code of Federal Regulations to restore the 2019 language after subsequent amendments were vacated by a federal court. "The Department’s technical amendment removes from the Code of Federal Regulations the regulatory language from a 2024 rule that was judicially vacated, and republishes the operative regulations, which were established in a rule the department issued in 2019. The restored regulations require that most exempt executive, administrative, and professional employees be paid a salary of at least $684 per week. The regulations also set a total annual compensation threshold of $107,432 for certain highly compensated employees."

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Denies Paid Leave as Reasonable Accommodation and Rejects FMLA Claim Based on Normal Application of Policy

Yesterday, the Sixth Circuit affirmed an employer’s summary judgment on ADA and FMLA claims brought by a Cincinnati teacher who sought three weeks of paid leave to be trained with a guide dog.   Tumbleson v. Lakota Local School District, No. 25-3548 (6^th Cir. 5-13-26).   The Court held that the ADA did not require the employer to provide her with paid leave and she could not show that she had been treated less favorably than others.  Unpaid leave remains a reasonable accommodation under the ADA which the employer can select without having to prove undue hardship.  It also found that she failed to show that her employer violated the FMLA by providing her with only unpaid leave under its existing policies.  Nonetheless, it reserved the right of future litigants to show otherwise with better arguments.

According to the Court’s opinion, the plaintiff’s medical condition was causing her to progressively lose her sight and hearing.  She had been provided with a number of classroom accommodations and a five-day leave to be assessed for a guide dog.   She continued to excel in her teaching duties.   She later sought three weeks paid leave to be trained with a guide dog, but the employer would only provide her with unpaid leave under the ADA since her request did not involve a “personal illness” under its sick leave or FMLA policies and she was not incapacitated or unable to perform her job duties. After taking the leave and obtaining her guide dog, her physician wrote a letter saying the dog was necessary for medical reasons, but the employer refused to change its decision.  This lawsuit ensued.

The Court rejected her disparate treatment claim under the ADA.    While the Court found that denial of paid leave could constitute an actionable adverse employment action under the ADA, she failed to show that she was treated less favorably than similarly situated co-workers outside her protected class.   This analysis matters both at the prima facie and pretext stages.    In this case, the employer denied the paid sick leave request because she did not fit within the “ due to personal illness” definition in the policy, Ohio law or the collective bargaining agreement.  “Yet she does not offer a single example of a nondisabled employee who received sick leave even when the employee’s proposed absence did not qualify for that leave.”  It was not enough to show that the HR Director routinely granted brief leaves of less than 10 days because she herself had also benefitted from this policy in her initial absence.   Thus, the policy had been neutrally applied and not discriminatorily.  She had also failed to request comparator information during discovery.

The Court also rejected her failure to accommodate claim because she was provided with three weeks of unpaid leave. 

The parties dispute only the “reasonable accommodation” part of this framework. The employee must identify an accommodation and prove its reasonableness.  . . .  How do we decide whether an accommodation is “reasonable”? The ADA’s text makes clear that an accommodation must be work related, meaning that it will allow an employee to “perform the essential functions of the” relevant job. 42 U.S.C. § 12111(8). To qualify as “reasonable,” then, an accommodation must alleviate “a key obstacle” that has prevented the employee from being able to perform an essential job function.  . . .  So courts will find a proposed accommodation unreasonable if an employee can perform the essential job functions and if the employee requests an accommodation for non-work-related reasons.  . . . We thus held that an employer did not have to change an employee’s schedule to allow her to avoid heavy traffic because this burden “exist[ed] outside the work environment.”

Further, even if an employee needs some accommodation, the employer “need not provide the” specific accommodation that the employee wants.  . . .  Rather, the employer has “discretion” to choose from among alternative reasonable accommodations if they all will permit the employee to perform the job.  . . .  The employer thus may pick an accommodation that is “less expensive” or “easier” to implement when given the choice between two reasonable accommodations.  . . .  We have held, for example, that a police department could provide an officer a “desk job” even though the officer preferred an “on the street” job with various restrictions.  . . . . And we have held that a clothing store could provide a warehouse employee with “leave time” even though the employee preferred a transfer to another warehouse role. . . .

This law forecloses [the plaintiff’s] failure-to-accommodate claim. At the outset, it is not obvious that [her] proposed accommodation—that [the school] provide her with paid leave to attend the Leader Dogs training—qualified as a reasonable one. At the time that [she] requested leave, she continued to be an excellent teacher who did a “wonderful job” in the classroom.  . . . . And we see little record evidence to suggest that the lack of a guide dog stood as an “obstacle” that stopped her from completing any “necessary function” of her teaching role.  . . .  Yet we need not decide this issue because [the employer] ultimately gave her an accommodation that allowed her to complete the guide-dog training: unpaid leave.

If [the school’s] unpaid-leave accommodation were reasonable, then, that fact would preclude [her] failure-to-accommodate claim because the ADA did not give her the right to her preferred accommodation.   . . .  Even if we assume that [she] needed a guide dog to work as a teacher, [its] accommodation met our reasonableness test.  . . .  There is no dispute that unpaid leave allowed [her] to attend the Leader Dogs training and bring home Henry. [She] also “offers no evidence linking” paid leave “to the performance of her job.”  . . .  Her doctor’s letter, for example, says nothing about whether that leave should be paid or unpaid. So [the employer] (not[the plaintiff]) had the “ultimate discretion” to choose between the paid-versus-unpaid alternatives because both allowed [her] to perform her job.  . . .  [bolding added for emphasis]

[Plaintiff] responds that unpaid leave was only “partially responsive” to her request because this accommodation required her to go three weeks without pay and caused some financial difficulties for her family.  . . . . But these financial difficulties arose “outside the work environment” and so do not go into the reasonableness calculus.  . . . [Her] financial difficulties are thus “beyond” [the employer’s] “duties to accommodate under the ADA.”  . . .  Indeed, her argument has no stopping point. The ADA says that giving an employee a “part-time” schedule can qualify as a reasonable accommodation. See 42 U.S.C. § 12111(9)(B). Under [the plaintiff’s] view, if this employee did not have the financial means to work only part time, the ADA would require the employer to provide full-time pay for the part-time work. The rule requiring an accommodation to be for work-related reasons avoids this result.  . . . . [bolding added for emphasis]

The Court rejected the plaintiff’s argument that the employer was required to show that paid leave would be an undue hardship.  “That fact is true but irrelevant.”

True, an employer need not provide a reasonable accommodation if it “would impose an undue hardship on the” employer’s operations. 42 U.S.C. § 12112(5)(A). In other words, even if paid leave were the only reasonable accommodation, Lakota would not have to provide that leave if it would cause this hardship . . .  But we need not reach this hardship question because we resolve the appeal on a distinct element. The record proves that two different accommodations—paid leave and unpaid leave—were both reasonable. In that scenario, Lakota had the “ultimate discretion” to choose the “less expensive” option even if the more expensive one would not have posed an excessive hardship.  . . .  In sum, because unpaid leave allowed [the plaintiff] to obtain her guide dog, [the employer] met its obligation to provide a reasonable accommodation. The ADA required nothing more. [bolding added for emphasis]

The Court also rejected her FMLA claim.  “Although the FMLA requires employers to grant leave, it does not require them to pay the employee while off work. Rather, the FMLA presumptively allows employers to treat the required leave as unpaid.”

That said, the law gives employees the right “to substitute any of [their] accrued paid vacation leave, personal leave, or medical or sick leave” for FMLA leave.  . . .  But it then makes clear that “nothing in [the FMLA’s general rules] shall require an employer to provide paid sick leave or paid medical leave in any situation in which such employer would not normally provide any such paid leave.” Id. To obtain paid leave, then, the employee must satisfy “the additional requirements in an employer’s paid leave policy[.]”

The Court observed that there were questions about whether the plaintiff even qualified for FMLA leave because, despite the serious health condition, she could still teach and it was her desire to attend training in Michigan that she sought leave.   The plaintiff did not address these issues, so the Court chose not to address them.    Instead, it rejected her argument that she was entitled to paid leave under the school’s policy when it did not normally provide such leave in similar circumstances.

To obtain paid leave under the FMLA, [the plaintiff] needed to show that [the employer] “normally provide[d]” this leave for those in her “situation[.]” Id. § 2612(d)(2)(B). But [the HR Director] testified that the guide-dog training did not fall within “the definition of sick leave” in the Ohio Revised Code, the collective bargaining agreement, or the school board’s sick-leave policy.  . . . . The district court thus held that [she] did not qualify for paid leave under the FMLA because she did not qualify for it under [the employer’s] sick-leave policy.

The Court rejected the argument that because the policy and statute did not define “due to personal illness” that this meant that it must be interpreted to incorporate guide dog training.  The Court instead agreed with the District Court that “due to personal illness” should be given its ordinary meaning.   While the symptoms of her serious medical condition could constitute a personal illness,  obtaining training when she was not incapacitated arguably could not.  Because, again, the plaintiff failed to argue this issue [that she required the training because of her serious health condition], thus giving the employer the opportunity to respond, the Court refused to raise the issue on its own initiative.   Nonetheless, it pointed out that this was an issue which could be argued in the future by other litigants. 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Two Unanimous Supreme Court Decisions. Federal Courts Retain Jurisdiction Over Claims Stayed Pending Arbitration.

This morning, the Supreme Court issued two unanimous decisions of interest to employees and employers.  In the first, the Court held that the Federal Aviation Administration Act does not preempt state law negligent hiring claims against truck drivers, trucking companies and brokers where the plaintiff had been injured by a big rig in a traffic accident.   Montgomery v. Caribe Transport II, LLC, No. 24-1238 (5-14-26).   In the second, the Court held that federal courts retain jurisdiction over lawsuits filed alleging federal or diversity questions (like employment discrimination) which were stayed pending arbitration so that the federal court can confirm or vacate the later arbitration decision. Jules v. Balazs Properties, No. 25-83 (5-14-26).   In this case, the arbitrator ruled in favor of the employer and awarded $34.5K in sanctions against the employee.  “[A]federal court that has previously stayed claims in a pending action under §3 of the Federal Arbitration Act (FAA . . .  has jurisdiction to confirm or vacate a resulting arbitral award as to those claims under §9 and §10.  . . .  Because a federal court in this scenario has jurisdiction over the original claims and does not lose that jurisdiction while the case is stayed pending arbitration, it retains jurisdiction to determine whether the arbitral award re solving those claims is valid and should be confirmed.”  In other words, a “court with the power to stay the action under §3 has the further power to confirm [or vacate] any ensuing arbitration award.”

According to the Court’s decision in Jules, the plaintiff worked for the employer hotel and brought a lawsuit alleging employment discrimination under federal and state law after he was fired during the pandemic.  The case was stayed pending arbitration pursuant to an agreement he had previously signed.  The arbitrator ruled in favor of the employer on all claims and issued the employer an award of $34,500 in sanctions (when the plaintiff refused to ultimately participate in the arbitration hearing), which it sought to confirm and enforce in the stayed federal court proceeding.  The plaintiff argued that the federal court no longer had jurisdiction because there was allegedly no longer any federal question or diversity jurisdiction.

After an arbitral award has issued, federal courts may confirm, vacate, or modify such an award under §9, §10, or §11. Un der §9, a court must confirm an award upon request “unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11.” The grounds for vacatur and modification are limited.

 . . .

 . . . For a federal court to have jurisdiction over an arbitral dispute, it is not enough that the dispute implicates the FAA. That is because the FAA is “‘something of an anomaly’ in the realm of federal legislation.”  . . .  Although the FAA is a federal statute that provides federal standards, it “does not itself create [federal] jurisdiction.”  . . .  Instead, given the FAA’s “nonjurisdictional cast,” a federal court must have an “‘independent jurisdictional basis’” for granting FAA relief.  . . . That could come, for example, in the form of diversity jurisdiction if a dispute under the FAA arises between citizens of different States with over $75,000 at issue.  . . . Or a court may have federal-question jurisdiction if an FAA motion implicates a federal issue (other than one under the FAA).

In light of this, the Court will look through the allegations of a petition to compel arbitration to the underlying substantive dispute to determine whether federal jurisdiction exists.  However, when the parties proceeded directly to arbitration (without being ordered to do so by a federal court), the Court will not look through the petitions to vacate or confirm an arbitration award to determine whether federal jurisdiction exists. 

The plaintiff argued that the petition to confirm the award did not meet diversity jurisdiction (because it was less than $75K) and did not raise a federal question.  The Second  Circuit and Supreme Court rejected this argument out of hand.

To start with,  . . , assessing jurisdiction over a §9 or §10 motion in a case originally filed in federal court does not require “looking through” the filed action. Instead, the court may assess its jurisdiction by looking at the suit that is already before it. As Badgerow explained, “[j]urisdiction to decide [a] case includes jurisdiction to decide [a] motion” within that case, and usually “there is no need to ‘look through’ the motion in search of a jurisdictional basis outside the court.”  . . .

Here, the District Court had original jurisdiction, under 28 U. S. C. §1331, over [the plaintiff’s] federal claims. It was this very jurisdiction that authorized the court to adjudicate the arbitrability of [his] claims under the parties’ contract to begin with, before staying litigation pending arbitration. Nothing in the FAA eliminated that jurisdiction while the parties arbitrated.  . . .  So when the parties returned to court after arbitration with §9 and §10 motions, the court had the same “jurisdiction to decide the case,” and thus “jurisdiction to decide th[ose] motion[s],” that it possessed from the start.  . . .  “The court had federal question subject matter jurisdiction and . . . never lost it.” . . .

 . . .

It is true that, by the time the parties filed the §9 and §10 motions here, the arbitrator had issued an award that marked “a contractual resolution of the parties’ dispute.”  . . .  As [plaintiff] argues, that out-of-court resolution functioned like a release, which could serve as an affirmative defense and be used to “resolve the original claim” filed in court.  . . .  The fact that the arbitral award may “resolve” [his] original claims, however, only underscores why the District Court’s original jurisdiction extends to the parties’ §9 and §10 motions. Those motions required the District Court to assess whether there were grounds to vacate the award.  . . .  They were thus integral to determining whether the award would continue to serve as a valid defense to the original claims that had been stayed, but were still pending, in District Court until the court confirmed the award. . . .

 . . . this Court has held that federal courts have the power to incorporate private settlements into orders of the court when resolving claims that are the subject of those settlements. In Kokkonen v. Guardian Life Ins. Co. of America, 511 U. S. 375 (1994), for example, the Court made clear that a federal “court is authorized to embody [a] settlement contract in its dismissal order” and later “enforc[e]” that “settlement agreement.”  . . .  Similarly, the Court has recognized federal courts’ jurisdiction to embody contracts “arrived at by negotiation between the parties” as consent judgments in certain circumstances.  . . . . Federal courts also routinely resolve disputes over private settlements in class actions, which can be settled “only with the court’s approval.”  . . .  In each scenario, as here, the parties reach a contractual resolution of claims filed in federal court, and the federal court has juris diction to resolve disputes over that private settlement and embody the settlement in a court order resolving the case.

 . . .

Under the rule the Court adopts today, this scheme con tinues to work well: The FAA requires a stay, rather than dismissal, so that a court that has granted a §3 stay can superintend the arbitration to the end, including through confirmation or vacatur. On Jules’s theory, however, things would fall apart. Without an independent jurisdictional ba sis (like complete diversity and more than $75,000 at stake) on the face of a §5, §7, §9, or §10 motion, Jules concedes that a court that grants a mandatory §3 stay has little to do but wait until the arbitration concludes and, finally, dismiss the claims. It would be curious for §3 to mandate keeping cases on federal dockets for essentially no reason at all in the cases where federal interests are likely at their highest: those, like this one, involving live federal questions. More plausibly, a court that grants a §3 stay retains jurisdiction to see the case through and provide the FAA’s “procedural protections” along the way.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Affirms Jury Award for Sexual Harassment Where Plaintiff Awarded $179K and Her Attorneys $480K.

Yesterday, the Sixth Circuit affirmed a jury and attorney’s fee award in a sexual harassment case where the jury agreed that the plaintiff had not been fired in retaliation for her complaints, but still awarded her $314 in back pay, awarded her $179K in compensatory damages (for emotional distress) and the trial court awarded her attorneys over $480K in fees (while rejecting the request for $800K in fees).  Griffin v. Copper Cellar Corp., No. 25-5786 (6^th Cir. 5/5/26).   The Court found that the $314 amount was based on the defense’s own arguments and was presumptively entitled to be awarded in a hostile work environment case to make the plaintiff whole.  It found her testimony of emotional distress sufficient to support the compensatory damage award.  Finally, it concluded that her attorneys’ rejection of the offer of unconditional reinstatement and $25K for settlement was ultimately reasonable when it obtained seven times that much at trial.

According to the Court’s opinion, the plaintiff was being grossly and frequently sexually harassed by a restaurant co-worker.  Her employer failed to stop the behavior and was  unsympathetic, even laughing at her.  The employer offered her unconditional reinstatement five weeks later and $25K to resolve her complaint, but it was rejected by her attorneys.  At trial (which had been bifurcated between liability and damages), the employer apparently successfully argued that she had not been fired as alleged and at best would be entitled to no more than $314 in backpay, which is what the jury awarded to her.

The employer challenged the back pay award of $314 because the jury had determined that the plaintiff had never been fired as alleged.  Thus, if she voluntarily resigned, she was not entitled to any back pay.   The Court did not believe that this challenge was timely, but agreed that timeliness had never been raised by the plaintiff or at the trial court level.  In any event, not only did the defense fail to object to ANY award of back pay prior to the final verdict, it actually suggested in closing arguments that $314 was the most that the jury could award.   The defense also had failed to assert prior to the final verdict that only nominal damages would have been appropriate.   The Court ultimately determined that back pay is always a presumptively appropriate remedy in a hostile work environment case. 

Our cases establish that “successful Title VII plaintiffs are presumptively entitled to back pay” sufficient “to make them whole.”   . . . In deciding on an award of back pay, a jury considers “what the claimant would have received but for [the] discrimination.” . . . . We have, moreover, recently upheld awards of back pay on hostile-work-environment claims in cases that, like this one, lacked an express jury finding of discriminatory or retaliatory dismissal . . .  To be sure, an award of back pay typically flows from a jury’s finding of discriminatory, retaliatory, or constructive discharge.  . . .  But we have never held that such a verdict is required as a foundation for an award of back pay. Here, the district court determined that the evidence introduced was sufficient for the jury to find Copper Cellar’s Title VII violations “responsible for [Griffin] leaving her employment,”  . . .  and, therefore, that the award of back pay reflected “what [Griffin] would have received but for” the hostile work environment. . . .  Such an award would not, under our existing precedent, constitute a clear error of law, and thus the district court did not abuse its discretion.

The Court also rejected the argument that the plaintiff was only entitled to nominal damages because simply “being upset” by the co-worker’s behavior was insufficient to justify such a large award.   The Court cited to the plaintiff’s testimony about how upset she was and her physical and mental manifestations.  “All told, a jury considering and crediting [the plaintiff’s] testimony could reasonably find that [the employer’s] hostile work environment caused her substantially more than nominal harm.”  The Court also could not find the award to be excessive in light of the harassment and isolation she suffered. “Though we are not convinced that only a “particularly sensitive” plaintiff would suffer harm from the treatment [she] described, her exact degree of sensitivity is beside the point where, as here, the record is not “devoid of any evidence of intangible emotional loss to justify a large non-economic award.”

The plaintiff’s attorneys had requested $800K in fees, but were awarded $480K.  The employer argued that they should not have been entitled to fees when they had rejected a settlement offer of $25K and unconditional reinstatement within weeks.  The Court found no abuse of discretion. 

It is true that “a spurned [settlement] offer might warrant a reduc[ed]” fee award, because “[f]ew, if any, reasonable litigants would call a monetary judgment that comes in well under the money offered to settle the case a success.”  . . .  The problem for [the employer] here is that the $179,000 in damages [she] received was not “well under the money offered.” Id. Quite to the contrary, [her] attorneys convinced a jury to award more than seven times what [the employer] was willing to settle for. Therefore, even ignoring that “a rejected settlement offer” is only one among the “broad constellation of factors a trial court may consider” in awarding fees, this is not a case in which “‘a less favorable recovery after trial’” could justify a reduced fee award.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Employee's Election to Challenge IME Abandoned Reasonable Accommodation Interactive Process

 Earlier this month, the Sixth Circuit affirmed an employer’s summary judgment on a Rehabilitation Act failure to accommodate claim because the employee abandoned the interactive process, and had always disputed that she required any accommodation to perform her job duties.  Morgan v. Ohio Dep’t of Rehab. & Corr., No. 25-3722 (6^th Cir. 4-14-26). Employees who are only “regarded as” disabled are not entitled to a reasonable accommodation.  Further, although she had been given the option of seeking a reasonable accommodation, she rejected that option and elected instead to challenge the IME obtained by the employer.  When she submitted such a medical evaluation, she was immediately reinstated. 

According to the Court’s opinion, the plaintiff suffered from recurring TIAs.  The only accommodation that she sought was intermittent FMLA leave, requiring her to be hospitalized whenever she had a TIA episode.  After almost a decade of renewed FMLA requests, the employer placed her on paid administrative leave pending an Independent Medical Evaluation with a psychologist concerning repeated aggressive, hostile and unprofessional behavior.  The IME concluded that she was not qualified to perform her current job, would require modified duties and further medical evaluation.  The employer then gave the plaintiff four\ options: (1) disability leave; (2) FMLA leave, (3) an ADA accommodation or (4) challenge the IME.  The plaintiff disputed that she was disabled and opted to challenge the IME.  However, she only submitted two days later a return to work without restrictions statement from her treating Nurse Practitioner.    The employer clarified that she required a physician analysis of the IME and ceased her paid administrative leave.   More than a month later, she submitted a medical statement disagreeing with the IME and releasing her to return to work without restrictions.  The employer then immediately reinstated her, but she filed suit at the end of the month, claiming that she had been discriminated against on account of her disability by an alleged failure to provide an accommodation or engage in the interactive process. 

The trial and appellate courts had no trouble disposing of the failure to accommodate claim.  First, she had always denied that she required an accommodation to perform her job duties and was not entitled to an accommodation in a “regarded as” disability claim.     On the contrary, she produced a release to return to work without restrictions.    

If [her] claim is that [the employer] “regarded” her as having a disability that she did not have, her failure-to-accommodate claim is likewise barred. This circuit has held that the fact that an employee does not have a disability obviates an employer’s obligation to provide an accommodation.  . . .  Applying this precedent, if [her] claim is that [the employer] wrongly perceived or had a mistaken belief that she had a disability and treated her adversely, [it] could not at the same time have an obligation to accommodate a disability that she did not have.

Moreover, even if she had an actual disability, any failure of the interactive process was due to her decision to abandon the interactive process and challenge the IME instead of seeking further evaluation or modification of job duties, etc.    She had been given the option of seeking a reasonable accommodation and she had rejected it. 

The Court did not address her loss of paid time off while challenging the employer’s IME because of the alleged “regarded as” disability claim.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney