Appeals Court Remands Age Discrimination Discharge Claim for Trial Based on Decisionmaker Comments About Retirement Plans and Proximity to Retirement Age

Last month, the Cuyahoga County Court of Appeals reversed an employer’s summary judgment on an age discrimination claim on the basis that the decisionmaker’s comments about the plaintiff’s repeated retirement equivocations constituted direct evidence of discrimination when he was laid off shortly after the comments were made.  Selzer v. Union Home Mortgage, 2026-Ohio-38.   While the mere use of the word, “retire” is insufficient by itself to constitute evidence of age discrimination, the frequent inquiries about the plaintiff’s retirement plans and consideration of his proximity to retirement age as a factor in his selection for the reduction in force, and comments by decisionmakers, etc. was sufficient to create an disputed issue of material fact about the reasons for his termination. 

The plaintiff was laid off in a reduction in force at the age of 64.  He alleged that his age was a factor because the employer retained a 31 year old in the same position hired five months earlier.   The trial court granted the employer summary judgment and the Court of Appeals reversed on the grounds that he presented sufficient evidence to show that his age may have been a factor in his termination. 

To support his argument that he had presented sufficient evidence to survive the employer’s summary judgment motion, the plaintiff

points to frequent comments inquiring as to his retirement plans; the comments were made by numerous UHM employees who had supervisory authority over [him]. [He[ further points to an email from  . . . a vice president with UHM who was involved in the decision to terminate [him], in which [she] stated that [he] “keeps saying he will retire but hasn’t.” According to UHM senior vice president of mortgage operations  . . . , the purpose of [that] email containing this statement was to “communicate the reasons that [[he] was] being included on the termination list.”

[Plaintiff] argues that other courts have concluded that an employer’s consideration of an employee’s potential longevity with the company “is nothing more than a proxy for age” and therefore constitutes direct evidence of age discrimination . . . .  

We reiterate that in this context, “‘[d]irect evidence is evidence that, if believed requires the conclusion that unlawful discrimination was at least a motivating factor in the employer’s actions.’”  . . . In determining whether an employer’s statements constitute direct evidence of age discrimination, courts must consider the following four factors:

(1) whether the statements were made by a decision-maker or by an agent within the scope of his employment; (2) whether the statements were related to the decision-making process; (3) whether the statements were more than merely vague, ambiguous or isolated remarks; and (4) whether they were made proximate in time to the act of termination.

 . . .

This court has held that the use of the word “retire” by itself is not sufficient direct evidence of age discrimination.  . . .  Here, however, the record contains evidence that [his] supervisors frequently asked him about his retirement plans, and moreover, a UHM representative testified in her deposition that [his] proximity to retirement was a factor UHM considered in [his] termination. The comments were made by UHM decision makers in the scope of their employment, the comments were related to the decision-making process, and they were made close in time to the decision. Further, considering the pattern of [his] supervisors inquiring about and commenting on his retirement plans, the statement in [that] email was not isolated or ambiguous.

Viewing the evidence in the light most favorable to [the plaintiff] as we are required to do pursuant to Civ.R. 56, Selzer has created a genuine issue of material fact such that reasonable minds could disagree as to whether [he] suffered age discrimination. Therefore, the trial court erred in granting summary judgment in favor of UHM.   . . . 

(bolding added for emphasis).  The Court declined to rule on the arguments about whether the evidence was sufficient to show a circumstantial burden of proof or pretext.

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.

Interesting FLSA and FMLA Issues Arise in 2026 as well as Remote Workers Working Hours

Earlier this month, the Department of Labor issued a few interesting opinion letters which will be of interest to both employers and employees.  One involved the FMLA and the others the FLSA.  In FMLA2026-2, the DOL instructed that FMLA time off includes time travelling to and from the medical provider office, which should not have been necessary to explain.  In FLSA2026- 2, the DOL confirmed that the regular rate must include the generous safety/punctuality bonus when calculating overtime pay.  In FLSA2026-4 (1/5/26), the DOL explained that the federal exemption for commissioned workers in section 7(i) only requires that the pay be more than the federal minimum wage, but that the employer could still be in violation of similar exemptions under state  law if the pay was not sufficiently higher than the higher state minimum wage and that tips only count towards the pay if the employer utilizes the tip credit.  Finally, in September, the federal district court in Columbus issued an opinion on when a work-from-home employee’s working hours begin and end each day. 

In Opinion FMLA2026-2  (1-5-26), the inquiry asked about how much time off the FMLA would require when the medical provider indicated that the employee needed time off for 45-minute medical appointments, but the employee claimed that s/he needed 1 hour travel each way from home to the office of the medical provider.  “For the reasons set forth below, an employee may use FMLA-protected leave that counts against his or her FMLA entitlement to travel to or from a medical appointment for a serious health condition.” Additionally, a health care provider need not provide an estimate of an employee’s travel time to or from an appointment for the medical certification to be complete and sufficient under the Act. “

In Opinion FLSA2026- 2 (1-5-26), the inquiry involved whether the regular rate (used to calculate overtime pay) must include the safety/punctuality bonus (up to $9.50/hour) on top of the $12/hour wage contractual rate when calculating overtime anytime it is earned.    The answer was yes.  “[T]he rule for determining the regular rate of pay is to divide the wages actually paid by the hours actually worked in any workweek[.]”

In FLSA2026-4 (1/5/26), the inquiry involved the commissioned employee’s exemption under section 7(i) when state minimum wage exceeds federal minimum wage.   The DOL explained “an employee of a qualifying retail or service establishment paid more than one and one-half times the federal minimum wage satisfies the minimum pay standard in section 7(i)(1). “  Therefore, “the exemption currently requires that the employee’s regular rate exceed $10.875 per hour ($7.25 × 1.5)—or, for practical purposes, that the employee’s regular rate be at least $10.88 per hour—for any workweek in which the employer claims the exemption.”  That being said, this does not answer whether using the federal minimum wage could violate the state law which requires employers to pay a higher minimum wage.

Moreover, although tips are not commissions under section 7(i), in some circumstances, a portion of an employee’s tips would be compensation for purposes of determining whether an employee is primarily paid by commission under section 7(i)(2).  This would depend on whether employer utilizes the tip credit or not. 

In Lott v. Recker Consulting, LLC, 798 F. Supp. 3d 778 (S.D. Oh 2025), the Court addressed  when the workday begins for remote workers.  Plaintiffs claimed that they were not paid for time spent logging and clocking in before work and end of lunch and logging out each day – entitling them to unpaid overtime, etc.  The Court decided that

the workday starts at the moment a remote worker opens and begins operating a program or application they use as part of the principal work activities they are employed to perform. By the same token, the workday ends at the moment the employee closes out of the last such program or application. In the Court's view, this better reflects the relationship between the employee and the computer in terms of job performance.

The Court rejected the argument that the workday began as soon as the employee turned on his or her computer. 

In short, the question is not when an employee has powered on or logged into their computer. Rather, the question is when they have configured that computer to perform the tasks they are employed to perform—or stated differently, when they have loaded the first application that they use to perform their job.

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.

Cuyahoga Court Enforces Cognovit Note Against Employee for Employer's Training Expenses

 In October, I reported that the Cuyahoga Court of Appeals had enforced an employer's hiring bonus agreement and required the former employee to repay it when he had resigned before completing training and within 18 months of being hired.   In November, the Cuyahoga County Court of Appeals affirmed enforcement of a $10K cognovit note signed by an employee agreeing to repay training costs incurred by the employer if she resigned within two years of being hired.  Overdrive Espresso, L.L.C. v. Finein, 2025-Ohio-5226.  The Court concluded that it could not "say that this transaction, arising out of employment contract, was a consumer transaction as defined under R.C. 2323.13(E)."  Because her remaining defenses went to enforceability of the note and not to its creation or calculation of the underlying debt, they were invalid. 

According to the Court's opinion, the employee was hired in April 2022 and the employer incurred $10K to obtain specialized training for her.  Accordingly, she was required to sign a cognovit note promising to repay within 30 days that $10K training expense plus 10% interest and collection costs  if she was terminated before April 2024 or a judgment would be confessed against her in court.  She resigned in December 2023 and had not repaid the training expense before February.  A complained was filed and an answer filed on her behalf pursuant to the cognovit agreement admitting to the allegations and confessing judgment.  Judgment was entered in favor of the employer the same day (as is typical). She failed to file a timely employee and, instead, employee sought relief from judgment, which was denied.  The Court of Appeals affirmed. 

Motions for relief from judgment under Civil Rule 60 are evaluated only for abuse of discretion. 

 “‘A cognovit promissory note is a special type of commercial paper by which a debtor authorizes a creditor, in the event of the debtor’s default on his payment obligation, to obtain an immediate judgment against him without prior notice or an opportunity to be heard.’”  . . .  “‘The purpose of a cognovit note is to allow the holder of the note to quickly obtain judgment, without the possibility of a trial.’” . . . As such, “when a debtor signs a cognovit note, the debtor relinquishes the possibility of notice, hearing, or appearance at an action to collect in the event of nonpayment on the note.”

As a result, Ohio courts have determined that in such cases where the party had never had the opportunity to be heard in a cognovit note proceeding, their burden is lessened when moving for relief for judgment under Civ.R. 60(B).  . . .  “Therefore, ‘a movant who files for relief from a judgment taken upon a cognovit note need only establish (1) a meritorious defense and (2) that the motion was timely made.’”

Under Civ.R. 60(B), the “‘moving party need only to allege a meritorious defense; it need not prove that it will prevail on that defense.’”  . . .  Although proof of success is not required, “the moving party still needs to allege operative facts with enough specificity to allow the trial court to decide whether a meritorious defense exists.”  . . . And the “movant must provide evidentiary material supporting his or her Civ.R. 60(B) motion.”  . . . These evidentiary materials “‘must present operative facts and not mere general allegations to justify relief.’” 

This court has recognized that “[t]he defenses available to the maker of a cognovit note are extremely limited. The ‘defense of non-default’ is certainly one.”  . . . . But “the defense of non-default is not the only meritorious defense recognized by courts as being available to a cognovit judgment debtor seeking Civ.R. 60(B) relief[;] in general, a judgment on a cognovit note will ‘not be vacated for reasons which do not encompass such matters of integrity and validity.’”  . . . For instance, other meritorious defenses may include “‘improper conduct in obtaining the debtor’s signature on the note; deviation from proper procedures in confessing judgment on the note; and miscalculation of the amount remaining due on the note at the time of confession of judgment.’”  . . . In short, “a meritorious defense is one that goes to the integrity and validity of the creation of the debt or note, the state of the underlying debt at the time of confession of judgment, or the procedure utilized in the confession of judgment on the note.”

The Court rejected the employee's argument that this transaction was a consumer rather than a commercial transaction.  

R.C. 2323.13(E) provides that “[a] warrant of attorney to confess judgment . . . arising out of a consumer loan or consumer transaction, is invalid and the court shall have no jurisdiction to render a judgment based upon such a warrant.” As such, in cases where a note arises out of a consumer loan or consumer transaction a common pleas court lacks jurisdiction to enter a cognovit judgment against the defendant.  ... 

         . . . 

 R.C. 2323.13(E)(2) defines a “consumer transaction” as “a sale, lease, assignment, award by chance, or other transfer of an item of goods, a service, franchise, or an intangible, to an individual for purposes that are primarily personal, family, educational, or household.”  . . .. 

             . . . .  

Here, the cognovit note arose out of an employment contract between [plaintiff] and [employer], wherein [she] agreed to reimburse [it] for the total expense of training costs in the amount of $10,000 if she voluntarily quit or breached the contract within two years of signing the employment agreement. The agreement, which was signed by both parties, provided, in relevant part, that ““[s]imultaneous with the execution of this Employment Agreement, the Employee [Finein] shall execute and deliver to the Company [Overdrive] a written Cognovit Promissory Note for the Training Cost . . . .” The note was executed for the agreed upon training cost of $10,000. 

[She[ does not direct us to any authority holding that a cognovit note arising out of an employment contract is considered a consumer transaction. Rather, it is clear from the contract that the primary purpose of the training received by [her] was not personal, but as a condition of her employment with [the employer]. This is further evidenced by the fact that [the employer] sought to protect its investment by requiring [her] to remain employed for a period of two years. Thus, we cannot say that this transaction, arising out of employment contract, was a consumer transaction as defined under R.C. 2323.13(E).

The Court concluded that the remaining defenses did not go to the validity of the note, but rather, to its enforcement which could not be challenged at this point:

[Her] remaining claims challenge the enforceability of the cognovit note under New York law and federal law. [She] also challenges whether the amount owed on the note adequately represents the training costs incurred by [the employer]. None of these defenses allege improper conduct in obtaining the debtor’s signature on the note; a deviation from proper procedures in confessing judgment on the note; or a miscalculation of the amount remaining due on the note at the time of confession of judgment.  . . .  As discussed above, “a meritorious defense is one that goes to the integrity and validity of the creation of the debt or note, the state of the underlying debt at the time of confession of judgment, or the procedure utilized in the confession of judgment on the note.”  . . . Since none of [her] remaining claims amount to a meritorious defense to a cognovit note, the trial court did not abuse its discretion in rejecting these claims. 

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.

Gray v State Farm Was Amended to Clarify Cat's Paw Theory and Breaks in Causation

 In August, I posted about an interesting Cat’s Paw theory case, Gray v. State Farm Mutual Auto. Ins. Co.,  (6^th Cir. 2025), where the Sixth Circuit reversed an employer's summary judgement due to possible selective enforcement of a time card fraud policy by a manager in retaliation for the plaintiff's prior protected conduct. 

As I briefly explained:

In July, the Sixth Circuit reversed an employer’s summary judgment on a retaliation claim where the plaintiff claimed that she was investigated and then fired in retaliation for assisting a co-worker assert her rights under the ADA and be transferred away from her discriminatory supervisor.  Gray v. State Farm Mutual Auto. Ins. Co., 145 F.4th 630 (6^th Cir. 2025).   When her co-worker’s discriminatory supervisor filled in for the plaintiff’s supervisor shortly after the protected conduct, he launched an unprompted and unprecedented investigation into the plaintiff’s time cards by comparing them to her computer use.  No other employee was investigated – despite similar discrepancies -- and the plaintiff was ultimately fired for time card abuse.  

The Court agreed that the evidence aligned with its precedent holding that “employees can establish prima facie causation by showing that their employer began scrutinizing them more heavily shortly after they engaged in protected activity, and then used its findings to justify termination.” The plaintiff was able to show that the discriminatory supervisor knew of her assistance to her co-worker and his retaliatory intent under a “cat’s paw” theory of vicarious liability. 

While the employer may have avoided direct liability under an honest belief theory, the supervisor’s actions could not. A “supervisor does not have to lie in order to be biased. As we have repeatedly recognized, a supervisor can cause an employee’s termination by reporting true yet selective information.”  Moreover, although “an employer can escape liability by conducting ‘an in-depth and truly independent investigation’ into an otherwise biased report,  . . . when a supervisor reports true but selective information, an investigation will always confirm the supervisor’s allegation.”  In this case, the employer and HR failed to take the plaintiff’s complaint of retaliation seriously or to compare her misconduct to other employees before terminating her employment.

The Court then held a re-hearing and amended its decision and dissent in December.   Gray v. State Farm Mutual Auto. Ins. Co., 159 F.4th 1024 (6th Cir. 2025).   Here is some of the additional text that was then added to its decision (emphasis added):

A simple example illustrates why. Imagine a workplace where five employees were engaged in the same pattern of misconduct. If a supervisor made a true but selective report of wrongdoing against one of the five employees because of that employee's race, they would be attempting to use the company's human resources as the "conduit" for their bias. See Romans v. Michigan Dep't of Hum. Services, 668 F.3d 826, 835 (6th Cir. 2012). If human resources then opened an independent investigation into that one employee, it would confirm the biased report, but it would not necessarily negate the supervisor's bias in singling out one employee based on race. That's why the Supreme Court "declined to adopt [] a hard-and-fast rule" that "an independent investigation has a claim-preclusive effect" or "somehow relieves the employer of 'fault.'" Staub, 562 U.S. at 420-21.

              . . . 

Our decision today does not impose a bright-line rule that a supervisor's true-but selective report will always be the proximate cause of any subsequent adverse employment action. Rather, we simply echo Staub's holding that a subsequent investigation that does nothing more than confirm a supervisor's true-but-selective report is by itself insufficient to break the chain of proximate causation.  . . . . An employer can still negate causation by establishing that "the employer's investigation result[ed] in an adverse action for reasons unrelated to the supervisor's original biased action."  . . . . . Put another way, an employer will not be liable if its investigation uncovers a superseding "cause of independent origin that was not foreseeable" from the supervisor's biased action . . .

We have previously held that the existence of a superseding cause is a question of fact.  . . .

Here, the undisputed record shows that [the manager] reported [the plaintiff] for "manually changing" her time entries and identified three discrepancies as proof of that fact. [The employer’s] HR employee,  . . . , thereafter conducted her own investigation that revealed additional discrepancies beyond the three identified by [the manager], including instances where [the plaintiff] reported working while she was not in the building. [The employer] claims that it fired [her] based on these additional out-of building discrepancies. On summary judgment, the question that we must answer is whether [her] termination based on these additional discrepancies was so "unrelated" to [his] original report and so "not foreseeable" by him that no reasonable factfinder could find proximate causation.

We hold that this question cannot be answered as a matter of law. [The manager] reported generally that [the plaintiff] was "manually changing" her time, not that she had done so only in the three instances that he identified. He also falsely informed [HR] that [she] had previously been reprimanded for similar conduct, suggesting that his report concerned a broad pattern of timekeeping issues. And he suggested in his report to HR that an investigation of [her] would uncover additional timekeeping errors. Given that [his] report and [her] termination both related to [her] timekeeping entries, a reasonable jury could find that the former improperly influenced—and was a proximate cause of—the latter.

Our decision in Romans does not counsel otherwise. Romans does not stand for the proposition that an independent investigation always breaks the chain of causation. Nor could it after the Supreme Court's rejection of that argument in Staub. It instead held that the independent investigation broke the causal chain because of the particular facts at issue in that case. There, the decisionmaker expressly disclaimed reliance on an allegedly biased report and conducted a separate investigation into the plaintiff's alleged misconduct.  . . . . The separate investigation found that the plaintiff had "violated four work rules, only one of which was related to [the allegedly biased] report, and each of which would have individually supported a termination."  . . . Therefore, Romans falls comfortably within the scenario delineated in Staub where an independent investigation "results in an adverse action for reasons unrelated to the supervisor's original biased action."  . . .

By contrast, here, [the employer] relied on [the manager’s] report and opened an investigation that confirmed his allegations. [It] then took the adverse action that [his] report was "designed and intended" to produce by firing [her] for timekeeping discrepancies.  . . . . So a jury could conclude that [its] investigation took into account [his] biased report and failed to determine that the adverse action was justified apart from his recommendation.  . . . . Romans supports rather than undermines this analysis.

The  dissent continued to elaborate why the  independent investigation by HR, which uncovered additional and more sever timekeeping violations, should have resulted in summary judgment as breaking the cat’s paw causation. 

 

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 Upholds Termination for Time Card Fraud Despite Cat's Paw Theory or Suspicious Timing

Yesterday, the Sixth Circuit Court of Appeals affirmed an employer’s summary judgment for terminating an employee for time-card fraud despite his arguments about failure to accommodate, retaliation and a cat’s paw theory that was remarkably similar to an earlier decision in   Gray v. State Farm Mutual Auto. Ins. Co., 159 F.4th 1024 (6^th Cir. 2025) (finding possible selective enforcement of time card fraud policy in cat’s paw retaliation case).   Shears v. FirstEnergy Corp., No. 24-3915 (6^th Cir. 1/5/26).  The Shears Court rejected the plaintiff’s assertion for the first time on appeal that his misconduct was caused by brain fog from his known disability and should have been accommodated.  The Court rejected all retaliation claims, regardless of the suspicious timing, because there was insufficient evidence of pretext, such as comparators receiving better treatment, knowledge by the initiating manager of prior protected activity or deviation from policy, etc.  The employer also conducted several reasonable investigations, entitling it to the honest belief defense.   Unlike the Gray case, there was apparently insufficient evidence presented to the trial court about selective investigation of time card fraud.

According to the Court’s decision, Plaintiff was diagnosed with Type 2 diabetes in 2012 and had been granted an accommodation to work only days from 2012 to March 2019. In  January 2019, he  assisted co-workers with sexual harassment complaints against his manager.  There was no evidence that the manager was aware of this.  During a work emergency, his manager assigned him to work nights again despite his complaints until he mentioned his diabetes and was requested to provide medical documentation.  He did in April and was immediately returned to day shift.  Afterwards, his manager investigated and discovered time card discrepancies ranging from 36-106 minutes during March 2019.  These were investigated and confirmed by his director, HR and a separate safety committee.  Plaintiff was interviewed several times and apparently never claimed retaliation or different scrutiny. He was fired in May 2019.   

The trial court granted summary judgment to the employer.  Employer was granted summary judgment.  The employer articulated a legitimate basis to terminate him for time card fraud, and the plaintiff never disputed that he had had not entered the plant at times he had reported being at work. The employer was also entitled to the honest belief defense because it had conducted several reasonable investigations to confirm the facts and given him the opportunity to respond. 

The courts rejected his reasonable accommodation claims.  First, he had failed to show any unreasonable delay in March when the employer was entitled to medical documentation and immediately provided his requested accommodation once he produced it and abandoned this theory on appeal.  It also rejected his new argument that his discrepancies were caused by brain fog from his known diabetes because “a failure-to-accommodate claim requires proof that the employer denied a reasonable accommodation—not that it disciplined or discharged an employee whose disability allegedly contributed to the underlying conduct.”  It found that he failed to prove this theory and found his cited cases distinguishable.  What the Court did not note is that the EEOC Guidance from 2008 had previously provided that an employer is not required to accommodate misconduct caused by a disability unless the employee had put the employer on notice of the need for an accommodation of that issue: 

When an employee does not give notice of the need for accommodation until after a performance problem has occurred, reasonable accommodation does not require that the employer   . . . tolerate or excuse the poor performance; . . . withhold disciplinary action (including termination) warranted by the poor performance . . . .

The Court also rejected the ADA retaliation because he could not show pretext when admitting the time card discrepancies and without similarly situated comparators who were treated better.  His excuses for his actions did not dispute the action and the employer not required to believe his “honest mistake” defense.   He might have prima facie case from the timing of his termination compared to his request to return to the day shift, but he lacked evidence of pretext to rebut the intervening causation factor of his time card fraud.

The Court also rejected his Cat’s Paw Theory because there was apparently no evidence that his manager was aware about his prior protected Title VII conduct in assisting his co-workers sexual harassment allegations.  There were also independent investigations and plaintiff had insufficient evidence that other employees engaged in similar misconduct without being fired or that he had ever alleged such similar misconduct during the employer’s multiple investigations and interviews.   In other words, there was insufficient evidence of selective enforcement by his manager of the time card fraud issues to support a cat’s paw theory.

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.