Sixth Circuit Holds EFAA Prohibits Mandatory Arbitration of Entire Case and Not Merely Sexual Harassment Claims

Yesterday, a divided Sith Circuit held that a complaint sufficiently plead a hostile work environment claim and unanimously concluded that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “EFAA”) prohibits the mandatory arbitration of the plaintiff’s entire case, including her ADA claims, and not just her sexual harassment allegations under Title VII.  Bruce v. Adams and Reese LLP, No. 25-5210 (6^th Cir. 2-25-26).   As faithful readers may recall, the EFAA created an exception in the Federal Arbitration Act for sexual assault and harassment claims which otherwise would have been subject to a pre-dispute arbitration agreement.  First, the Court’s majority found that the amended complaint sufficiently alleged a hostile work environment claim under Civil Rule 8 without having to describe every single instance of inappropriate or humiliating comments.  Second, because the EFAA prohibits mandatory enforcement of a pre-dispute arbitration agreement with respect to the entire case, and not just the sexual harassment claims, the entire case, including ADA claims, could not be referred to arbitration.   While the Court acknowledge that this could result in the assertion of specious and frivolous sexual harassment claims to avoid arbitration of genuine claims, it believed that this could be consistent with Congressional intent to avoid piecemeal and more expensive litigation of plaintiff claims. 

According to the Court’s opinion, the plaintiff worked as a legal assistant in the Liquor Control group of a law firm, where one of the attorneys regularly made inappropriate comments and repeatedly extended invitations to her.  She suffered from a number of mental health issues and was afforded a flexible work schedule.   When the group changed law firms, she joined the new, defendant, law firm, was accepted to law school and was promoted to paralegal.  While the attorney was no longer regularly in the office, he still made inappropriate comments when he saw her.  Also, the new law firm insisted on her keeping a regular work schedule.  She was subjected to corrective action for late arrivals, even after she explained it was because of medication, and ultimately fired her while she was attempting to have her physician communicate with the firm.  She filed suit under the ADA and Title VII.  The law firm moved to dismiss the sexual harassment claim and to compel the ADA claim to arbitration under her pre-dispute arbitration agreement.  The trial court denied both motions and the law firm appealed.  A divided Sixth Circuit affirmed.

The Sexual Harassment Claim

The Sixth Circuit agreed that if the sexual harassment claim failed to satisfy Rules 8 and 12(b)(6), it could be dismissed and the ADA claim sent to arbitration.  However, the Court found that the complaint sufficiently alleged an actionable sexual harassment claim.  

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”  . . . “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”  . . . . Under this standard, “a short and plain statement of the claim” sufficient to “give the defendant fair notice of what the . . . claim is and the grounds on which it rests” is enough, and a complaint “does not need detailed factual allegations.”

 . . . .

To invoke the EFAA’s safe harbor, a plaintiff must “allege[] conduct constituting a sexual harassment dispute,” 9 U.S.C. § 402(a), and a sexual harassment dispute is one “relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law,” id. § 401(4). The EFAA, however, does not itself define what it means for a plaintiff to “allege” such a dispute.

The Court declined to decide whether the EFAA standard of “alleging” a sexual harassment dispute means that the claims must satisfy the Rule 12(b)(6) standard or a lower standard.   The Court’s majority held that the plaintiff was not required to allege facts that would satisfy Title VII’s burden shifting standard. “For our purposes the question is simply whether Bruce’s complaint “allege[s] sufficient ‘factual content’ from which a court, informed by its ‘judicial experience and common sense,’ could ‘draw the reasonable inference’” that Bruce was subjected to a hostile work environment.”

In evaluating whether the complaint sufficiently stated a claim for hostile work environment, the Court did not consider the allegations against the lawyer at the initial law firm and only considered the allegations which involved the defendant law firm.  The defendant law firm employed neither the attorney nor the plaintiff when the earlier alleged harassment occurred and, thus, could not be vicariously liable for it.   That being said, the Court’s majority found the complaint sufficiently alleged a hostile work environment against the defendant employer:

[Her] complaint outlines a consistent pattern of sexualized jokes and comments directed at her by [the attorney] throughout her employment with [defendant]. Although [he] was not always in the office at [defendant], he “continued sexually harassing [her] when he was in the office” by “making sexual comments and jokes to and about [her], as well as making inappropriate comments about [her] appearance, clothing, and private life.” [After giving several explicit examples of his inappropriate comments], [t]his conduct affected [her] ability to work as a member of the Liquor Group, as she “went out of her way to avoid” [him], and “hardly spoke to him” by late 2022. . . .

Viewed in the light most favorable to [her] and drawing all inferences in her favor, these facts plausibly allege conduct “sufficiently severe or pervasive to alter the conditions of [her] employment and create an abusive work environment.”  . . .  We gather and infer from [her] complaint that [he], who was among [her] supervisors and responsible for her employment at [defendant], consistently and continually directed sexualized comments at her in the presence of other employees at [defendant]. Or in Harris’s terms, [he] “frequen[tly]” and regularly “humiliat[ed]” [her], thereby “interfere[ing] with” her ability to perform her job as a member of the Liquor Group. . . . And it is certainly plausible that a young female paralegal would be humiliated and intimidated, and that her performance would be affected, by persistent suggestions from a supervisor that she keep clients happy by visiting them “in a short skirt,” that she is a “[h]oe,” and that it would be “hot” if she had sex on a desk in the office—not to mention his delivery of an unsolicited $750 “bonus” from his personal funds. . . .

To be sure, and as [defendant] is keen to point out, “occasional . . . offensive utterances” that are not “physically threatening or humiliating” do not render a work environment hostile and discriminatory.  . . .  [Defendant] characterizes [her] complaint as setting forth just “two discrete, one-time comments in a one year period.”  . . .  We agree with [Defendant] that such a complaint would be subject to dismissal because a hostile-work-environment claim premised on three or four instances of harassing comments over an extended period of time is likely to fail unless those comments are sufficiently severe to overcome their infrequency. . . .

But drawing all inferences in [her] favor, [his] conduct was much more frequent. Although [his] office attendance during [her] year at [defendant] was inconsistent, he “continued sexually harassing [her] when he was in the office.”  . . .  His comments were “persistent, ongoing, and continued up until the day  [she] was fired.”  . . .  These allegations are sufficient to allow a plausible inference that Pinson’s comments occurred more than a handful of times.

The majority rejected the argument that plaintiffs need to allege all or most of the incidents of humiliating comments supporting a hostile work environment claim:

[A] demand for a detailed telling of each offensive utterance, however, is more than Rule 8 requires. First, such a standard is “incongruous” insofar as it would “require [[her]], in order to survive a motion to dismiss, to plead more facts than [s]he may ultimately need to prove to succeed on the merits” at summary judgment or at trial.  . . .  Second, the  . . .  argument that the specific contents of each harassing statement are necessary for us to “independently determine” whether they add up to a hostile-work-environment claim,  . . .  would all-but-eliminate any room for “reasonable inference.”  . . .  In so doing, it would impose on hostile-work-environment plaintiffs a heightened pleading standard not unlike Rule 9’s fraud pleading standard.

The EFAA Standard

The Court observed that the majority of courts to have faced the issue have denied to refer entire cases – and not merely the sexual harassment claims – to arbitration based on the language of the EFAA (bolding added for emphasis):

IN GENERAL.—Notwithstanding any other provision of this title, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.

 . . .

The operative word here is “case.” That is because it is “with respect to a case” that an otherwise-valid arbitration agreement is invalid and unenforceable. 9 U.S.C. § 402(a). All data point clearly in the direction of “case” encompassing a plaintiff’s entire suit.. . . We need look no further than the FAA to find a use of the word “case” in accordance with these definitions, as Section 7 provides for the ability to call witnesses “in [a] case” in arbitration. 9 U.S.C. § 7. The use in Section 7 of the preposition “in” means that “case” makes sense only if read to refer to a proceeding. . . .

With this understanding of the meaning of “case” in mind, the EFAA’s text renders an arbitration agreement “[un]enforceable with respect to” a plaintiff’s entire case, or action, and not only with respect to certain claims therein. 9 U.S.C. § 402(a). And the cases the EFAA shields are those that “relate[] to the sexual assault dispute or the sexual harassment dispute.” “Relate” means “[t]o have some connection to; to stand in relation to.” . . . When a plaintiff files a case that includes a sexual harassment claim, that case certainly has “a connection with” and “reference to” the claim. Thus, we hold that a plaintiff’s case, such as Bruce’s, that contains a plausibly alleged claim of sexual harassment, therefore “relates to” a “sexual harassment dispute,” and arbitration may not be compelled under the FAA. 9 U.S.C. § 402(a).

The Court rejected the employer’s argument that FAA has traditionally resolved arbitrability on a claim-by-claim basis because of this “case” language from the EFAA.   It also rejected “the practical concern that plaintiffs will abuse the EFAA to avoid arbitration of non-sexual-harassment/abuse claims.”  “[T]he sole function of the courts—at least where the disposition required by [a statute’s] text is not absurd—is to enforce it according to its terms.”

Congress might indeed view the rule we adopt here as advancing its intent because a construction of the EFAA that required plaintiffs with both sexual-harassment and other claims to proceed separately in arbitration and court would discourage such plaintiffs from accessing the court system, on the pain of the increased costs and time-commitment in bringing two parallel actions in different fora. Because A&R has not demonstrated that the effects of our holding will contravene Congressional policy, much less sufficiently so that we could disregard the law’s plain text, we are not swayed.

The dissent pointed out, while acknowledging that the complaint also alleged that comments were continuous,  that only three discrete instances of inappropriate comments were made while the attorney and plaintiff worked for the defendant employer and this was insufficient to allege a hostile work environment claim.  He would not have drawn an inference that these were indicative of a “consistent pattern.”  He described her allegations as conclusory and “threadbare.”

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.

Ohio Court Finds Former Employee In Contempt for Refusing to Remove Employer's Confidential Information From Website

Last week, the Cuyahoga County Court of Appeals affirmed a contempt order against a former employee who posted confidential and trade secret information of his employer on his website for pecuniary gain in violation of a prior non-disclosure agreement and in violation of an agreed/consent order entered by the trial court after a preliminary settlement conference.  Combs v. Sherwin-Williams Co., 2026-Ohio-562.  The plaintiff argued that his attorney did not have authority to agree to the terms of the consent order, but the court of appeals disagreed.   Refusing to consider his substantive challenges to the order because the TRO and PI were not final orders at that time, the Court found that the employee had failed to show why he should not be held in contempt for violating the agreed/consent order. 

According to the Court’s opinion, the plaintiff filed a complaint against the employer alleging, among other things, breach of contract and tortious interference.  The employer filed similar counterclaims as well as conversion, unjust enrichment, theft of trade secrets and conversion.   In particular, the employer alleged that the plaintiff’s severance agreement contained non-disclosure terms that he violated by posting its trade secrets and confidential information on a personal website for personal monetary gain.   After he refused to remove the information, it filed for a temporary protective order, which he opposed, largely on the grounds that the information was not confidential.   The attorneys and court held a conference, where an interim order was entered agreeing to at least temporarily remove the employer’s information pending an evidentiary hearing on the merits, and scheduled settlement conference.   

However, the plaintiff refused to remove the information and, after initially opposing the employer’s motion for contempt,  his attorney withdrew representation.  The plaintiff continued pro se.  Another settlement conference was held (after much drama) and the case again was not resolved. An evidentiary hearing was held on the motion for contempt and TRO.   The trial court found the plaintiff to be in contempt of the order, granted both a TRO and preliminary injunction and the plaintiff appealed.  The Court of Appeals refused the appeal of the TRO and PI because they were not final orders, but affirmed on appeal the contempt order.

An “agreed order” or “consent order” is based upon the agreements reached by the parties and is considered a contract between those parties as well as an order of the court. . . . Moreover, courts have held that “‘[i]t is beyond question that a duly authorized attorney may enter into an agreed judgment entry[,] the terms of which will be binding on his or her client.’”

In opposing the contempt motion, the plaintiff had focused entirely on the merits of the allegations – challenging that the information was confidential and trade secret – and not on whether he was bound by his former attorney’s in-court agreement:

[Plaintiff] claims that he was excluded from the status conference and his “coerced attorney[’s]” approval of the order should not be akin to his consent. However — despite numerous filings and the opportunity to offer testimony and present evidence at the show-cause hearing — [he] presented no evidence that he was unaware of his counsel’s strategy for the status conference or the May 1, 2025 order issued thereafter. Nor did [he] offer any evidence to establish that he did not approve of or agree to that strategy or the conditions set forth in the order. Without any testimony or evidence indicating that his attorney was not authorized to enter into such an agreement at the status conference or that [he] had no knowledge of the May 1, 2025 order, we decline to find that [he] was not bound by its terms. Since [he] did not challenge the allegation that he “blatantly disregard[ed]” the terms of the May 1, 2025 order by failing to remove any information from his website or otherwise rebut [the employer’s] initial showing of contempt, the trial court did not abuse its discretion when it found [him] in contempt of court.

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.

When Enough Is Enough: Sixth Circuit Affirms Dismissal When Employer's Actions and Belief Were Sufficient

Yesterday, the Sixth Circuit affirmed an employer’s summary judgment dismissing a workplace harassment and retaliation claim.  Hamm v. Pullman SST, Inc., No. 25-1617 (6^th Cir. 2-12-26).   The plaintiff alleged that he was harassed by his co-workers and the construction superintendent and then was fired in retaliation for complaining.  The Court found that the employer’s actions to respond to his complaints were sufficient based on the information provided and his repeated failure to accept alternative work assignments gave the employer an honest belief that he was not interested in continuing his employment, justifying his termination. 

According to the Court’s opinion, the plaintiff was hired by the construction manager and reported to the superintendent.  After a few months, he mentioned that he was bi-sexual to a co-worker, who told others.  Starting in November, he was called derogatory names by his co-workers and the superintendent.   He finally reported to the manager in mid-February that unnamed co-workers were calling him homophobic slurs, but did not mention that he was bi-sexual.   Thinking it was merely a personality conflict, the manager spoke to the crew and the problem was resolved for a couple of weeks.  However, when it started again, he complained again to the manager in mid-March about two co-workers and the superintendent referring to him with homophobic slurs.  The manager said he would take care of it, still without any knowledge that this was a sexual harassment complaint because of the vagueness of the complaint.  The plaintiff claimed that the mistreatment continued, culminating in him leaving the worksite never to return on April 29 because of an anxiety attack.

He finally formally reported the problem on April 29 to HR, which conducted a thorough investigation.  Everyone – including the allegedly neutral witnesses – denied his allegations, except for the superintendent losing his temper with him on April 29.  Instead, he was described as lazy.   The superintendent was formally warned.  All of the supervisors were required to submit to anti-harassment training and the employees were required to re-read and re-sign the anti-harassment policy.  Nonetheless, the plaintiff refused to return to work and began a medical leave for his anxiety.  Throughout the month of May, he was offered five different re-assignments to different work locations, but he objected to all of them for reasons other than his medical leave or anxiety.  While he never technically refused, he never accepted them either and had secretly recorded at least one of job offers.   After twice extending his medical leave, he inquired about returning to work and was told that his employment had been terminated.

The Court declined to address a number of potential issues and others the parties chose to not dispute, including whether this constituted harassment prohibited by Title VII, whether the periodic comments were sufficient to create a hostile work environment, etc.

The Court rejected the argument that the employer was automatically liable for any comments by the superintendent because the plaintiff failed to produce any evidence that the superintendent took or could take any tangible employment actions, making him a supervisor whose actions would bind the employer. Instead, the superintendent was treated as a co-worker.

Employers are only held liable for co-worker harassment if it was negligent – i.e., it knew or should have known about the harassment and unreasonably failed to stop it. 

Or, as our own caselaw puts it, the employer’s response must “manifest[] indifference or unreasonableness in light of the facts the employer knew or should have known.”  . . .  If, then, an employer takes “prompt and appropriate corrective action” after learning of the harassment, employees cannot tie the harassment to the employer.  . . .

The Court concluded that the plaintiff failed to show manifest indifference by the employer.  The manager took immediate and effective action in response to his first (February) vague complaint (which had not identified any specific individuals because he had not wanted to get anyone in trouble).   The manager’s action about the second (March) complaint were still deemed sufficient since the plaintiff still had not provided information indicating that this was a sexual discrimination issue.   The HR Department conducted an immediate investigation which failed to corroborate his allegations and was not required to believe him, particularly when none of his own witnesses corroborated his allegations.  Moreover, the employer took action in any event to prevent future harassment, including training and counseling.  When the manager learned the details of the problem in early May, he immediately agreed to reassign the plaintiff and approved the medical leave and extensions.  He also offered the plaintiff alternative assignments which addressed his stated objections.

The Court rejected the plaintiff’s arguments that he had never actually refused the alternative work assignments.  However, based on his own secret recordings of the conversations, it was clear he had raised objections and never actually accepted the job offers.  Thus, the employer had an honest belief that he had rejected them:

And during the call with [the manager] (that [the plaintiff] secretly recorded), [the plaintiff] said he was “not at all” good at this type of work.  . . . [His] response to this offer came as close to an express denial as it could. All this said, we agree that [he] did not expressly deny most of the jobs. For example, he did not say “No” to driving to Toledo or Cincinnati. Rather, he asked a question: “Isn’t that a hike?”  . . . .  And he did not say “No” to the overhead demolition work; he simply said that this work “hurts [his] shoulder.”  . . .  Given his clear reluctance to take these jobs, we doubt that any reasonable jury could rely on this lawyerly argument to prove [the employer’s] pretext.

At day’s end, though, we need not resolve this debate over whether [the manager] made formal offers or whether [the plaintiff] gave formal denials. When an employee claims that an employer’s reason for an adverse action had no basis in fact, the employer does not need to prove that reason in court.  . . . . It just needs to prove that it held an “honest belief” that the reason was true.  . . . . . So, for example, an employer who fires an employee for fraud does not need to establish that the employee committed the fraud—just that it honestly believed the employee did so.  . . . .  And the employee cannot show pretext merely by showing that the reason was false.  . . . .. This rule applies here. Whether or not [the plaintiff] actually declined these many offers, [the employer] at least held an “honest belief” that he did.  . . .  And [his] “own assertions” that he never denied any assignment do not suffice to overcome this honest-belief rule.

The Court also rejected the plaintiff’s argument that he was not required to accept the alternative assignments because he was on medical leave.  He never once raised his medical leave or his anxiety as a reason that he rejected the five possible re-assignments.  Instead, he “raised concerns that the worksite was too far away, or too high in the air, or too demanding on his shoulders, or too late in the day given other appointments.” Moreover, the assignments were offered before he extended his medical leave.

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.

Political Beliefs Will Not Save Title VII Claims Without Comparator or Replacement Evidence

Last month, the Sixth Circuit affirmed summary judgment for an employer despite claims that the receptionist  had been fired, at least in part, for expressing her political beliefs about law enforcement officers.  Hightower-Mathis v. NextCare Michigan Providers, PLLC, No. 25-1623 (6^th Cir. Jan 16, 2026).  The plaintiff receptionist made comments to police officers seeking treatment at the clinic, which made them uncomfortable providing personal information to the clinic.    She was fired after they complained and an investigation.  She admitted that she was fired for the disputed comments and not because of her race or gender, dooming her Title VII claims. 

According to the Court’s opinion, the terminated medical clinic receptionist alleged that she had been fired on account of her race and gender after she had been fired for making unprofessional comments to a police officer who was there seeking medical treatment.  She admitted to making small talk with the officer when he checked in, including asking whether he had ever killed anyone (which was confirmed by her co-worker).  The officer then texted his supervisor about her rude comments to him about his uniform and asking if he was going to kill anyone tonight.   His sergeant then immediately came to the clinic and she allegedly asked him if he was going to beat up anyone tonight (which she denied).  He asked to speak with her supervisor, the clinic manager, who he immediately called to report her comments.  She, in turn, emailed her supervisor about the “grumpy old man” who was complaining about her because she had been joking with his police officer and asked to leave early to move her car with unregistered tags so that he did not give her a ticket.   She and her co-worker were asked by the Clinic Manager for statements about the incident.   The Police Chief called the next day to demand her termination or he would cancel the department’s contract with the clinic.  She was then fired for unprofessional conduct.

The courts found that she could not even prove a prima facie case of discrimination.  Not only could she not identify any replacement, she could not identify anyone who had engaged in similar conduct and not been fired.   She never complained about harassment and admitted in her deposition that she was fired because of her alleged comments to the police officers, which was investigated by her employer, and not because of her race or gender.  The courts did not address whether she was able to prove pretext because she did not produce sufficient evidence to carry her prima facie burden of proof.

 

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.

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.

Sixth Circuit Rejects ADA Accommodation and Interactive Process Claims When Request to Sit Every 10 Minutes Was Unreasonable on its Face

Earlier this month, the Sixth Circuit Court of Appeals affirmed an employer’s summary judgment on an ADA claim on the grounds that the requested accommodation was unreasonable on its face, meaning that the employer did not have to even engage in the interactive process or grant the requested accommodation.   Bowles v. SSRG II, LLC, No. 25-5329 (6^th Cir. 12-17-25).   The newly-hired  fast-casual restaurant cashier had requested the right to sit for five minutes every time that she had to stand for 10 minutes because of arthritis in her knees.  The undisputed facts showed that the essential functions of the job required multi-tasking and spending the majority of time standing and walking.  There were no “standalone register-only” positions.

According to the Court’s opinion, the plaintiff was hired for a cashier position.  This required her to take orders for dine-in and carry-out, fill drink orders, stocking the drink station and refrigeration station, expediting food orders, delivering items to eat-in customers, clean tables, vacuum, etc. in a fast-paced environment.   “Those features made multitasking essential.”  During the application process, she had disclosed her disability and that she would need to periodically sit if required to stand for long periods of time and was hired anyway. 

During her orientation, the plaintiff disclosed that she would need to sit when needed or to sit and work. HR delayed her start date pending medical documentation, which initially indicated only that she would need a chair because of her arthritis.  HR then requested to know how long she could stand and how often she would need to sit, etc.   The plaintiff responded that she could only stand for 10 minutes at a time and then would need to sit for 5 minutes.   HR responded that there were no sitting positions.

The Court rejected the employee’s failure to accommodate claim for failing to specify a reasonable accommodation:

[Her] claim stumbles from the start, as she did not satisfy her initial burden of showing that her proposed accommodation—being able to sit for five minutes after every ten minutes of standing—is objectively reasonable, accounting for the essential requirements of the cashier/service-team member role  . . . .

 . . .

Juxtapose these critical job duties with what [she] requested: the ability to sit in one location for a duration of five minutes—presumably in front a cash register—after standing for ten. [Her] request would necessarily change the nature of the cashier/service-team member position. For a third of her shift, [her] job would be isolated to manning the cash register, regardless of whether there was a customer waiting at the register. And during those periods, [she] would be unable to tackle numerous duties, from greeting a customer at the door to rushing an order out to a hungry patron to cleaning up a spill at the drink station, just to name a few, any of which could occur at a moment’s notice in the setting of a fast-casual restaurant. This collection of duties is why [the employer] requires both multitasking and mobility from its team members.

The plaintiff attempted to argue that she was only hired to be a cashier and not to multi-task.

The problem for [the plaintiff] is that there is no evidence that she was hired for a standalone register-only position. In fact, no such position existed at the restaurant. The only position identified in the record is the cashier/service-team member role. And its written job description and the deposition testimony presented at summary judgment show that the role was far more than a limited, register-centric job. True, both [the restaurant’s] employees as well as [the plaintiff] referred to the position colloquially as the “cashier” role. But the position’s name, either formal or informal, is far less meaningful than its critical functions. As we engage in the “highly fact specific” inquiry into what is an essential function,  . . .a job title alone tells us very little, . . .

The Court also rejected her argument that her earlier requests to sit periodically should have been given more weight than her last, more specific request.   It distinguished other cashier cases where the plaintiff’s station was stationery, rather than fluid. 

 . . . requiring a duration of five minutes of sitting after standing for ten is what makes [her] request facially unreasonable. Meeting those terms would alter essential functions of the cashier/service-team member position while foisting added duties on co-workers when [she] manned the cash register. Perhaps, as [she] emphasizes, she could perform some tasks during her time standing. But that misses the point. The nature of the job—working in the front of the house at a fast-casual restaurant— necessarily means that a given task could crop up at any time. In one minute, the kitchen might have prepared a food order to run out to a customer. The next, a customer might finish her meal, leaving a messy table behind. And a minute later, the beverage station or refrigerator may need restocking. Had [the employer] granted [her] accommodation, all of those tasks would go unattended by [her] while she sat at the cash register, despite her position’s essential requirements and the restaurant’s needs.

The Court also refused to assign the “reasonableness” of the request to a jury determination:

While there undoubtedly are cases where disputes of fact arise over what a job entails and whether an accommodation would interfere with core functions of that job, in the end, disputes over both issues involve a mixed question of law and fact.  . . .  And it is appropriate for us to resolve these mixed questions at summary judgment when there are few evidentiary disputes over the material facts. . . .  That is the case here. There is no evidentiary dispute as to the essential functions of the cashier/service-team member position. Nor is there a dispute over the nature of [her] proposed accommodation. As a result, we follow the well-trodden path of determining as a matter of law whether [her] proposed accommodation is a facially reasonable one.

The Court also rejected her allegation that the employer failed to engage in the interactive process.  Rather than address the employer’s request for medical information, it concluded that no interaction was required when the requested accommodation was unreasonable on its face:

a viable interactive-process claim presupposes the existence of a reasonable accommodation. And with [her] having presented a facially unreasonable request to [the employer], her remaining claim necessarily fails.

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.

Ohio Enacts E-Verify Workforce Integrity Act for Non-residential Construction Employers Beginning in March 2026

 Last week, Governor DeWine signed into law House Bill 264, the E-Verify Workforce Integrity Act,  which requires most non-residential construction contractors to utilize e-verify to confirm the legal work status of employees at Ohio Revised Code §§4151.01 et seq.  The Act prohibits employers from continuing to employ individuals whose legal work status has not been confirmed by e-verify.  The Attorney General shall enforce the provisions, and can receive anonymous complaints, but will not base an investigation on race, color or national origin.   Notably, there is no deadline to utilize e-verify  (but employers are required under federal law to complete I-9 forms within 3 days of hire) and the Act does not address the use of day laborers.  Violating employers can be fined and barred from state contracts for a period of time.  Knowing violations can result in the revocation of any required license to conduct business.   Covered employers must maintain their records for at least three years.  The Act becomes effective on March 19, 2026.

Key terms of the legislation include:

·       Sec. 4151.02. (A) Except as provided in division (C) of this section, no nonresidential construction contractor, subcontractor, or labor broker shall fail to verify the employment eligibility of each employee hired to perform work on a nonresidential construction project through the e verify program. A nonresidential construction contractor shall use e-verify to confirm the identity and legal working status of each employee employed by the nonresidential construction contractor. A subcontractor shall use e-verify to confirm the identity and legal working status of each employee employed by the subcontractor. A labor broker shall use e-verify to confirm the identity and legal working status of each employee employed by the labor broker.

·        (B) A nonresidential construction contractor, subcontractor, or labor broker shall keep a record of the verification required by division (A) of this section for three years after the date of hire or one year after the date the employee's employment is terminated, whichever is later.

·       (C) A nonresidential construction contractor, subcontractor, or labor broker is not required to comply with division (A) of this section if both of the following apply: (1) The nonresidential construction contractor, subcontractor, or labor broker has previously verified an employee's employment eligibility using e-verify. (2) The employer is not required to verify or reverify the employee's eligibility to work under section 101(a)(1) of the federal "Immigration Reform and Control Act of 1986," 8 U.S.C. 1324a(b). Sec. 4151.03.

·       No nonresidential construction contractor, subcontractor, or labor broker shall continue to employ an individual after receiving a notice of final nonconfirmation for that individual from the e-verify program. For purposes of this section, a final nonconfirmation occurs when the contractor, subcontractor, or labor broker receives a case result indicating that an employee's employment eligibility could not be confirmed and instructions that the contractor, subcontractor, or Sub. H. B. No. 246 136th G.A. 3 labor broker should close the e-verify case associated with the employee.

·       (C) "Employee" means any individual who performs services for a contractor, subcontractor, or labor broker who satisfies both of the following conditions: (1) The individual is subject to the contractor's, subcontractor's, or labor broker's direction and control, not only as to the result accomplished but also as to the details of how the work is performed; (2) The individual receives compensation in the form of wages, salary, or any other form of remuneration in exchange for services rendered.

·       (E)(1) "Labor broker" means any individual or entity who hires an employee and supplies the employee's labor to a nonresidential construction contractor or a subcontractor, regardless of tier, through the use of a contract. (2) "Labor broker" does not include any governmental entity or labor organization as defined in section 3517.01 of the Revised Code.

·        (F) "Nonresidential construction contractor" means any individual or entity that has responsibility for the means, method, and manner of construction, improvement, renovation, or repair on a nonresidential construction project with respect to one or more trades and who offers, identifies, advertises, or otherwise holds out or represents that the individual or entity is permitted or qualified to perform or have responsibility for the means, method, and manner of construction, improvement, renovation, repair, or maintenance with respect to one or more trades on a nonresidential construction project.

·       (G) "Nonresidential construction project" means the construction or renovation of any building, highway, bridge, utility, or related infrastructure, but does not include any of the following: (1) An industrialized unit, manufactured home, or a residential building as defined in section 3781.06 of the Revised Code; (2) A building or structure that is incidental to the use of the land on which the building or structure is located for agricultural purposes as defined in section 3781.06 of the Revised Code; (3) A mobile home as defined in section 4501.01 of the Revised Code.

·        (H) "Subcontractor" means any individual or entity who enters into a contract with a nonresidential construction contractor or another subcontractor, regardless of tier, to perform work on a nonresidential construction project.

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.

Ohio Court of Appeals Refuses to Enforce Non-Compete or Award Damages and Dismisses Counterclaims.

On Monday, the Warren County Court of Appeals upheld the dismissal of both the employer and contractor’s claims involving the enforcement of a non-compete clause and abuse of process claims. Reliant Serv. MJF, L.L.C. v. Brown, 2025-Ohio-5364.   The Court treated the non-complete clause involving the independent contractor as though he were an employee of the employer contracting business.   It found that the clause was unenforceable because it was overly broad in prohibiting all competition and in failing to show any protectible interest such as an investment in training the contractor or in confidential information.  In its breach of contract claim, the employer also failed to show that its level of business with that customer (or any other customer) had declined as a result of the allegedly unfair competition.  The court also refused to award the individual damages for the amount of lost income he suffered while the TRO was in effect because he was limited to the amount of bond required for the TRO and failed to challenge the low amount with evidence.  It also found that he could not prevail on his counterclaims because the employer was permitted to file a lawsuit, even if it lost on the merits of its claim. 

According to the Court's opinion, the plaintiff employer ran a construction staffing business where it would supply individuals to complete the “punch lists” for newly constructed homes (i.e., drywall repairs, painting, etc.)  It hired the defendant individual/independent contractor in 2013.  He already had 25 years of experience as a handyman and did not receive any training to perform his assignments.  The employer had a large customer and a few smaller ones.   In 2013, it required its employees and contractors to sign a non-compete form which prevented them from competing or providing services to identified customers, including Ryan Homes.  The defendant signed that form and began performing assignments, including for Ryan Homes.   When another court found the form unenforceable, the employer required the contractors to sign an independent contractor agreement which contained a different non-compete clause preventing any competition for one year.    The defendant also signed that agreement, but the employer mysteriously back dated it to 2013. 

The defendant formed his own contracting/handyman business in September 2021 and began performing work for his new business for Ryan Homes as well as for the employer.  He then resigned from the employer in October 2021.  The employer discovered his competition with Ryan Homes and filed suit in March 2022 and obtained a TRO against the competition and was only required to post a $1K bond.   While the magistrate initially enforced the non-competition agreements, the trial court in December ultimately dissolved the TRO and preliminary injunctions, but also rejected the counter claims for abuse of process and tortious interference.   The court also refused to award damages of $115K which the defendant claimed to have lost as income while the TRO and PI were in force and limited the defendant to the $1K bond.  Both parties appealed and the Court of Appeals affirmed.

First, the courts refused to treat the non-compete form and independent contractor agreement clause as integrated.  The employer argued that the defendant should at least be enjoined from working for Ryan Homes because it was specifically identified on the non-compete form.  However, the magistrate and trial found that the clause replaced the form and the employer had failed to appeal that finding.    In any event, the courts concluded that the clause was overly broad because it contained no geographic restrictions.  The employer’s business was concentrated in four counties, but the clause prevented all competition, even outside that area.   

A noncompete covenant is reasonable if (1) its restrictions are not greater than what is required to protect the employer, (2) it does not impose an undue hardship on the employee, and (3) it is not injurious to the public. Id. at 26. In determining the validity of a noncompete covenant, each case must be decided on its own facts. Id. at 25. A plaintiff seeking to enforce a noncompete covenant must establish, by clear and convincing evidence, each of the three elements above.  . . .

In determining whether a noncompete covenant is reasonable, a court should consider the following factors: (1) the absence or presence of limitations as to time and space, (2) whether the employee represents the sole contact with the customer, (3) whether the employee is possessed with confidential information or trade secrets, (4) whether the covenant seeks to eliminate competition which would be unfair to the employer or merely seeks to eliminate ordinary competition, (5) whether the covenant seeks to stifle the inherent skill and experience of the employee, (6) whether the benefit to the employer is disproportional to the detriment to the employee, (7) whether the covenant operates as a bar to the employee's sole means of support, (8) whether the employee's talent which the employer seeks to suppress was actually developed during the period of employment, and (9) whether the forbidden employment is merely incidental to the main employment.

 . . . The Contract's noncompete clause is a statewide, if not worldwide, limitation from employment with any of [the employer’s] home-builder clients for a period of one year. A one-year time period for a noncompete covenant is generally reasonable.  . . . However, in the circumstances of this case, where [the defendant] only performed work for [the employer’s] client, Ryan Homes, in Ohio's four southwest counties, the lack of any geographic limitations makes the noncompete clause unduly restrictive. . . . .

Further, the employer failed to show a protectible interest.  The clause was not tailored to prevent the misuse of confidential or trade secret information.  Further, while such clauses are enforceable to prevent unfair competition and to protect an investment in employees, they are not enforceable to prevent fair competition.  There was no evidence that the employer had invested in any special training of the defendant.  Rather, he was hired because of his extensive prior experience and the employer could not prevent him from using his previously acquired skills to compete against it.   

An employer's legitimate interests in utilizing a noncompete covenant include "prevent[ing] the disclosure of a former employer's trade secrets or the use of the former employer's proprietary customer information to solicit the former employer's customers."  . . .  Another legitimate purpose of a noncompete covenant is the retention of employees in which an employer has invested time and other resources.  . . .  However, this case did not implicate trade secrets or confidential information. Moreover, the record plainly shows that [the employer] did not invest time and money in training [the defendant], and did not play any role in [his] development as a skilled and professional punch-list contractor. Rather, [he] worked as a handyman providing handyman and punch-list services for 25 years prior to his employment with [it]. Stated differently, [his] knowledge and skills were not developed or improved while he was a[n] . .  independent contractor. Noncompete covenants that prevent an employee from using his or her general skills and experience in the marketplace weigh against enforcement.  . . .  In addition, while the record indicates [he] dealt directly with Ryan Homes in scheduling work as a[n]independent contractor, he was not the sole contact with Ryan Homes.

Nonetheless, the Courts found that the defendant was not unduly harmed because the clause had never been enforced to prevent him from using his skills in other contexts, such as a handyman or in other commercial construction.

Despite an employer's interests, enforcement of a noncompete covenant cannot cause undue hardship on a former employee.  . . . "To be sure, any person who is prevented from practicing his profession or trade for a period of time in an area in which it has been practiced, suffers some hardship.  However, the Raimonde test requires more than just some hardship."  . . .  "The public's interest in determining the reasonableness of a noncompete [covenant] 'is primarily concerned with . . . promoting fair business competition.'"   . . .  In highly competitive industries, enforcement of noncompete covenants are often found to not adversely affect the industry or harm the public in limiting the public's options in obtaining goods and services. Id.

[The Defendant] is providing the same type of punch-list services for Ryan Homes now as he did for it when he worked as a[n] independent contractor. The forbidden employment is therefore not merely incidental to the main employment under the ninth Raimonde factor. Although the Contract's noncompete clause prevents [him] from working for or with [the employer’s] home-builder clients for a period of one year, it does not act as a complete bar to his sole means of support or stifle his inherent skills and experience. Fenik testified that [the employer] does not prevent current and former independent contractors from providing general handyman services or landscaping to residential property owners or from working in commercial construction. Fenik stated that many individuals working for [it], in fact, do side work on the weekends or if they have an opening in their work schedule. [The defendant’s] testimony revealed that during the nine months the preliminary injunction was in effect, he did not seek any alternative handyman employment or work in commercial construction. Moreover, although the record shows [he] worked mostly, if not exclusively, for Ryan Homes as a[n]independent contractor, he never inquired of [the employer] if he could work for its other home-builder clients during the nine-month preliminary injunction. The Raimonde test requires more than just some hardship. [He] did not show that he could not readily obtain a position or establish a non-competing practice.  . . .  Thus, the fifth and seventh Raimonde factors weigh in favor of enforcing the Contract's noncompete clause.

In addition, as for the employer’s breach of contract claim – which was tried in 2024, it failed to show that it had suffered any financial losses.  It sought a percentage of the fees which the defendant had earned from  Ryan Homes.  However, it continued to receive the same amount of business from Ryan Homes before and after the period when the defendant competed against it.  Any business he took was from other competitors, not the defendant: “there is no evidence this business would have gone to [the employer].”

The Court also affirmed the dismissal of the defendant’s counterclaims.  It refused to find that the act of filing a lawsuit can constitute tortious interference merely because the employer could not meet the clear and convincing evidence standard of evidence:

Turning to [his] argument, [the employer’s] mere resort to filing a civil lawsuit against [him] and seeking a preliminary injunction does not constitute a tortious interference with a business relationship. To hold otherwise would have a chilling effect on valid lawsuits seeking to enforce contractual provisions such as a noncompete covenant. Moreover, [he] has failed to articulate any damages resulting from [its] alleged tortious interference with a business relationship. Here, [he] was out of work for several months as a result of the magistrate's decision granting [the employer] a preliminary injunction. Thus, [his] claimed loss of income was not caused by [its] filing of the lawsuit and seeking of a preliminary injunction, but by the magistrate granting the preliminary injunction.

The Court rejected the abuse of process claim on similar grounds:

We find there is no genuine issue of material fact regarding [his] abuse of-process counterclaim because [he] failed to present evidence establishing [the employer’s] ulterior motive. That is, there is no summary judgment evidence that [it] had an ulterior motive in seeking injunctive relief. Here, [it] filed a lawsuit against [him] and sought injunctive relief specifically to prevent [him] from competing directly with it. These are not "ulterior purposes" that [it] aims to accomplish but are clearly the stated and primary goals of these proceedings. Furthermore, as plainly shown by its December 12, 2022 decision dissolving the preliminary injunction, it is well within the trial court's jurisdiction to grant or deny a preliminary injunction. . . The trial court, therefore, did not err in granting summary judgment in favor of [the employer] on [his] abuse-of-process counterclaim.

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.