Supreme Court Reverses Decision Based on Arguments Never Raised or Briefed by the Parties as Inconsistent with the Adversarial System of Justice

This morning, the Supreme Court issued a per curiam decision of interest to mostly attorneys. Margolin v. Director of the Executive Office for Immigration Review, No. 25-2067 (5-26-26).    I bring it up because this has happened to most of us at one time or another and is extremely frustrating to explain to a client how we get ambushed by a court on issues never raised by our opponent.  The Court reversed the  Fourth Circuit (for the second time in a year) for reversing a judgment on grounds not raised or briefed by any of the parties in the case and not giving the parties an opportunity to file supplemental briefs on the issue.  “Federal courts adhere to the principle of party presentation.  . . .  That principle—the ‘rule that points not argued will not be considered’—distinguishes our adversarial system of justice from an inquisitorial one.  . . .  Because courts are ‘essentially passive instruments of government,’ we rely on the parties to ‘frame the issues for decision’ and decide ‘only the questions presented.’”  In other words, “[f]ederal courts are not ‘roving commissions,’  . . . licensed to ‘sally forth each day looking for wrongs to right. . . ’” 

The Fourth Circuit violated the party presentation principle when it decided “a case different from the one [respondent] advanced.”  . . .  As respondent conceded below, our precedent establishes that Congress, through the CSRA, intended to channel covered claims to the MSPB.  . . . . The parties thus confined their arguments to the narrow question whether respondent’s claims were, in fact, covered. Unsatisfied with rejecting respondent’s arguments on that question, however, the Fourth Circuit sua sponte addressed a much broader one and remanded for further proceedings on that question. The court transformed respondent’s argument that the CSRA did not channel its claims into one that the CSRA might not—in light of current conditions—channel any claims. And the court did so without giving either side a chance to address its theory.  . . .  That “‘drasti[c]’” departure from the principle of party presentation “‘constitute[d] an abuse of discretion.’”  . .  .

 Federal courts are not “roving commissions,”  . . . licensed to “‘sally forth each day looking for wrongs to right,’”  . . .

(bolding added for emphasis).

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

Sixth Circuit Affirms Employer's Summary Judgment on FMLA Interference and Retaliation Claims Where Employee Was on Last Chance Agreement and Never Sought Medical Treatment

Last week, the Sixth Circuit affirmed an employer’s summary judgment on FMLA interference and retaliation claims.  Paris v. McAllister Machinery Co., Inc., No. 25-1726 (6^th Cir. 5-14-26).  The employee could not prevail on the FMLA interference claim because he could not show that he suffered a serious health condition with hospitalization or consulting with a medical provider about his mental distress.   While he could show that his inquiries about taking FMLA leave for his mental distress were protected activities, and were temporally proximate to his termination less than a month later, he could not show that his termination was pretextual when he was already on a Last Chance Agreement and his violation of any policies justified his termination.   Temporal proximity could not satisfy his need to prove the employer’s explanation was pretextual. 

According to the Court’s opinion, the plaintiff employee had a long history of performance problems and was ultimately placed on a Last Chance Agreement in October 2018 to avoid being immediately terminated.  He was then told by his union steward in early December  that he was about to be fired.  His supervisor a few weeks later confronted him about not wearing steel-toes shoes during his shift. He denied the allegation, which prompted the supervisor to try and stomp on his foot to prove his point.  Upset, he called HR and said he needed time off for anxiety, anguish and mental distress.  They discussed him applying for FMLA and he asked for the forms so that he could do so.  However, despite the passage of a month between this event and his termination, he never sought medical care or treatment for his distress and he never submitted a formal request for FMLA leave after receiving the forms upon request.   He was then fired in mid-January 2019 for a variety of infractions over the last few months, including not wearing required protective clothing, overcharging customers,  and general inability to follow proper procedures.

The Court agreed that he could not prevail on an FMLA interference claim because he had never sought medical treatment of any kind for his mental anguish.   Without such treatment or medical consultation, he could not prove that he had a serious health condition and was entitled to take FMLA leave.  No jury could rule in his favor on such a claim, entitling the employer to summary judgment as a matter of law.

The Court also agreed that he could not prevail on his FMLA retaliation claim, but for different reasons than the trial court.  The Court agreed that his inquiries about taking FMLA leave and requesting the FMLA forms constituted protected conduct and that his termination approximately a month later could support a causal connection between the two (i.e., temporal proximity).  However, he could not show that the employer’s explanation for his termination – poor performance and violation of company policy in violation of his Last Chance Agreement – was pretextual.  He had been told by the union before his protected conduct that he was about to be fired for violating the Last Chance Agreement. The employer specified a number of incidents and violations which took place in the few months before his termination that violated his Last Chance Agreement.  “We agree with [the employer] that a single violation of [its] policies following [the plaintiff’s] entry into the LCA would have constituted a valid, nondiscriminatory reason for his termination.”

[He] then failed to carry the burden of showing that any of [the employer’s] reasons were “in reality a pretext to mask discrimination.”  . . . . He failed to do so because he provided no evidence that [its] termination was pretextual.  . . .  And temporal proximity alone cannot support a showing of pretext.  . . .  There is no genuine issue of material fact as to whether [its] termination of [his] employment was pretextual, and [it] was entitled to judgment as a matter of law on [his] FMLA retaliation claim.

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

Sixth Circuit Does Not Require Clear and Convincing Evidence for Each Preliminary Injunction Element Unless Required by Statute

Yesterday, the Sixth Circuit reversed the denial of a preliminary injunction sought by an employer against a former employee who allegedly absconded with trade secret information for the benefit of his new employer, a competitor. PCC Airfoils LLC v. Daughterty, No. 25-3794 (6h Cir. 5-19-26).    The Court found that the employer need not prove each element of its claim by clear and convincing evidence in order to obtain preliminary injunctive relief.  “Rather than requiring clear and convincing evidence for each preliminary injunction factor, a court should consider all four factors to determine whether, taken together, they clearly weigh in favor of granting injunctive relief.”

According to the Court’s opinion,  a long time employee who had designed turbine airfoils was promoted to director in 2020 and then demoted a year later during a restructuring.  Frustrated, he later resigned to become a director at a competitor.  He did not have a non-compete agreement.  After his resignation, the employer discovered that he had prepared to print four confidential documents two days before leaving and that he had not left those documents in his office upon his departure.    The employer alleged that he “printed several documents containing trade secrets on his way out the door,”  but it could not prove that he actually printed them.   It sued him and his new employer to prevent him from disclosing trade secrets or working on similar products for the competitor.   The trial court denied the requested injunction on the grounds that the employer had failed to prove each element by clear and convincing evidence.

When faced with requests for a preliminary injunction, district courts consider four factors: (1) the plaintiff’s likelihood of success on the merits; (2) the risk of irreparable harm to the plaintiff in the absence of an injunction; (3) the risk that an injunction will harm others; and (4) the broader public interest. . . .

 . . . Courts, generally speaking, should engage with all four factors in a sliding-scale inquiry. A strong showing as to one factor may “outweigh[]” a weaker showing as to another factor. Winter, 555 U.S. at 23–24. After weighing the four factors against one another, a court may grant a preliminary injunction only if a plaintiff has made “a clear showing that [it] is entitled to such relief.” Id. at 22. All of this means that a movant does not need to establish a quantum of proof, whether a preponderance or clear and convincing evidence, with respect to each factor to be eligible for preliminary relief.

Two qualifications exist. If the plaintiff has “no likelihood of success on the merits,” there is nothing left to balance and the plaintiff’s request for a preliminary injunction must fail regardless of its showing on the other factors. Higuchi Int’l Corp. v. Autoliv ASP, Inc., 103 F.4th 400, 409 (6th Cir. 2024) (quotation omitted). Likewise, a court must reject a plaintiff’s request for a preliminary injunction if it fails to show any risk of irreparable injury.

Measured by these requirements, the district court erred in requiring [the employer] to establish “clear and convincing evidence” with respect to each of the four factors in order to be eligible for preliminary relief.  . . .  While a court should “consider” all four factors, it is a sliding-scale inquiry that turns “as much on the equities of a given case as the substance of the legal issues it presents.”  . . .  The necessary showing for any one factor turns on the strength of the plaintiff’s showings for the other factors. Because generalizations are dangerous when it comes to equity, and because the Supreme Court has cautioned that the clear and convincing evidence standard applies in only a few rare circumstances, . . .  a court may not require every plaintiff to meet a heightened standard of proof for every preliminary injunction factor to qualify for injunctive relief. The district court erred in reaching a contrary conclusion.

 . . . .

 . . . Requiring a “clear showing” to obtain a preliminary injunction—because it is an extraordinary form of relief—is not the same thing as requiring “clear and convincing evidence” to establish each of the four factors to establish eligibility for this relief.

Instead of creating a heightened standard of evidentiary proof for each factor individually, the “clear showing” phrase clarifies that, on balance, the four preliminary injunction factors must clearly weigh in the plaintiff’s favor to qualify for injunctive relief.

The Court agreed that an unpublished Sixth Circuit had applied the clear and convincing evidence standard to all four factors, but was not bound by that precedents or later decisions that relief on it.  The Court also agreed that Ohio state court apply the clear and convincing standard to all four elements, but the federal court procedural rules apply to claims brought in federal court, even if the substantive law is governed by Ohio law.  Further, there was no substantive statute requiring use of a higher standard of proof.

Ohio’s rules of equity generally apply the clear and convincing evidence standard to the four preliminary injunction factors.  . . .  Because one of his claims seeks relief under an Ohio statute, [the defendant employee] contends that Ohio’s preliminary injunction rules should apply. But a federal court applies federal procedural rules, even when deciding cases under state law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). The preliminary injunction inquiry falls on the procedural side of the line,  . . . requiring us to apply federal, not Ohio, rules. And we treat the preliminary injunction considerations as equitable factors to be weighed, not elements to be proved by clear and convincing evidence.

 . . . .

The clear and convincing evidence standard thus had no role to play in this case. Indeed, as it pertains to the plaintiff’s likelihood of success on the merits, it seems particularly odd to require the plaintiff to prove its case by a higher standard than will be required at trial even before the parties have had the benefit of discovery.  . . .  . . . .

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.

DOL Formally Restores 2019 White Collar Exemption Levels Under FLSA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 . . .

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

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

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

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

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

 . . .

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

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

 . . .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

New Federal Government Initiatives Affect Legal Enforcement

While making changes in employment laws has not been a priority for the Trump Administration in 2026, that does not mean that there is nothing new to watch.  First, ICE announced last month that certain clerical errors in completing I-9 forms which formerly could be corrected in the future now constitute substantive violations which could result in substantial fines. Second, OSHA announced last week an increased enforcement of workplace heat hazards, starting immediately.  Finally, affirmative action requirements for veterans and the disabled remains fully in place due to the underlying statutes, but the Trump Administration has again proposed moving enforcement from OFCCP (which would be defunded) to the Office of Civil Rights. 

Last month, ICE issued enforcement guidance for employers explaining how ICE conducts I-9 form inspections and the ramifications for employers with sloppy records and/or failure to correct technical and other failures.    It is happily well written.  It confirms that employers have 3 days to produce I-9 forms requested by ICE.  “An employer may receive a monetary fine for all substantive violations and uncorrected technical or procedural failures.”  Following an inspection, the employer will receive one of three types of notices which reflect the outcome of the audit.   It also includes a list of “substantive paperwork violations,” (i.e., missing or incomplete fields) which now include the failure to fully complete certain areas of the I-9 form, such as the employee’s date of birth, the date the employee signed the form, incomplete information about the translator (if any), date of hire, date of employer certification, etc.  It also lists examples of technical failures and a description of how fines are calculated.

Last week, OSHA updated its National Emphasis Program for indoor and outdoor heat hazard prevention which provides additional guidance to avoid citations and expands the list of targeted industries.  This will be particularly important during heat waves.    Among other things, OSHA will conduct random inspections of targeted industries during heat waves to ensure compliance.  This initiative began in 2022.  The OSHA new release explained “OSHA identified industries with high rates of heat-related illness and industries with employers that have received heat-related citations or hazard alert letters.” The target lists includes farming, various manufacturers, sawmills, metal production and processing foundries, grocery and related product merchant wholesalers, department stores, air transportation, general freight trucking, couriers, messengers, and delivery services, warehouses, landscapers, community food and housing, automotive repair and maintenance, construction, greenhouses and nurseries, and restaurants.

Trump’s proposed budget again intends to defund OFCCP entirely, which will require amendments to the underlying statutes for Section 503 and VEVRAA, as well as the applicable regulations, which assign enforcement to OFCCP.  This was also proposed in last year’s budget, but was not adopted by Congress.   Employers should remember that although Executive Order 11246 (women and minorities) was rescinded in January 2025, the affirmative action obligations for the disabled and veterans remain fully in place.

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.

Franklin County Appeals Court Affirms Employer’s Summary Judgment on Sex, Race, Harassment and FMLA Retaliation Claims

Last month, the Franklin County Appeals Court affirmed an employer’s summary judgment on FMLA retaliation and sex and race discrimination allegations following the plaintiff’s demotion. Fields-Arnold v. Cent. State Univ. Bd. of Trustees, 2026-Ohio-826. The Court found that the plaintiff waived certain arguments about direct evidence, race discrimination and hostile work environment by failing to provide any substantive argument before the trial or appeals courts.  The plaintiff also failed to show replacement outside the protected class or to show that the employer’s explanation for her demotion was pretextual, dooming her sex discrimination and FMLA retaliation claims.  While she was not given a specific reason at the time of her demotion, she admitted that her job performance had previously been criticized and she failed to dispute the reasons given in the employer’s summary judgment motion.

According to the Court’s opinion, the plaintiff was encouraged by the university president to apply for a certain promotion, which she eventually received.  However, in their first post-promotion meeting, their relationship soured when she requested a higher salary than offered.  Although she prevailed in receiving a $5K increase, the president allegedly said that she talked too much and reminded him of his wife.   He later criticized her performance in a few meetings and she was demoted back to her prior position a few months later.  In the meantime, she had applied for and, after submitting additional documentation, FMLA leave. She was replaced by a white female and resigned the following year after filing this lawsuit.   The court of claims granted summary judgment on all claims to the employer.

The Court found that she had abandoned her race discrimination claim by failing to make any substantive arguments in her appellate brief when challenging the trial court’s rejection of this claim for failing to show pretext.  Indeed, she apparently only used the word “race” three times in her entire brief.

Similarly, it rejected any claims of direct evidence of sex discrimination because she never raised this argument in opposing the summary judgment brief at the trial court level.  Moreover, the three alleged comments were not directly related to the issue of her demotion, and thus, were not direct evidence since it still required an inference as to the speaker’s intent. 

[His] comments, while disrespectful and perhaps based on stereotypes, do not satisfy the requirements to constitute direct evidence of discrimination. “ ‘Direct evidence is proof which speaks directly to the issue, requiring no support by other evidence.’ ”  . . .  It “ ‘does not require a factfinder to draw any inferences in order to conclude that the challenged employment action was motivated at least in part by prejudice against members of the protected group.’ ”

In addition, she failed to identify anyone outside her protected age or sex class who was similarly situated, failed to meet the employer’s performance expectations and was treated better than her. 

The Court also rejected her appeal dismissing her hostile work environment when the trial court found that three alleged comments over a four month period were insufficiently pervasive or hostile.   As with her direct evidence argument, she failed to even mention “hostile work environment” when opposing the employer’s summary judgment motion at the trial court. 

As for her FMLA retaliation claim, the trial court had found that it failed because she received all of the FMLA leave she requested and her demotion did not deter her from seeking additional FMLA leave.  The Court’s majority reversed that determination, but found she still could not prevail because she failed to present evidence showing that the university’s dissatisfaction with her performance was pretext for retaliation. She admitted that the university president had criticized her performance to her face several times and did not try to show that those and other criticisms lacked a factual basis or were insufficient to motivate her demotion, etc.   Therefore, the fact that she was not told at the time of her demotion the specific performance reasons for it, she had previously been informed about dissatisfaction with her performance and failed to show those and other criticisms were pretextual.

Even if an employer approves an employee’s FMLA requests, the employer could still go on to impose an adverse employment action against the employee for exercising her rights under the FMLA. . . .  And that is exactly what [plaintiff] alleged in her complaint—that she was demoted because she took FMLA leave. We find the court of claims erred in concluding [she] “failed to identify an adverse employment action that was taken against her because she used FMLA leave.”

. . . .

Although [Plaintiff] did not receive specific examples of her unsatisfactory performance at or around the time of the demotion  . . . , she was aware of Dr. Thomas’s dissatisfaction before the demotion occurred. In her deposition, [she]recounted two meetings where [he] criticized her performance. . . .

While [her] deposition testimony reflects her general belief that she satisfied the job duties as listed in the job description  . . . , she did not contest the specific assertions [he] made about her purportedly unsatisfactory work. 

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 Appeals Court Entertains New Questions About Shortening OCRA Limitations Period By Contract

Last month, the Cuyahoga County Court of Appeals reversed an employer’s summary judgment dismissing the former employee’s OCRA sex discrimination and retaliation complaint as untimely under the shortened limitations period in her employment agreement.  Toth v. Rocket Mtge., L.L.C., 2026-Ohio-926.    The Court found that the trial court had failed to assess whether Michigan or Ohio law applied and whether the most recent amendments to Chapter 4112 would affect the enforceability of the shortened limitations period if Ohio law applied.

According to the Court’s opinion, the plaintiff alleged that she had always worked from home in Cuyahoga County and had been terminated in September 2021 on account of her sexual orientation and prior complaints.  She filed a Charge of Discrimination with the OCRC in May 2023 and her lawsuit in February 2024.   The employer moved to dismiss and converted it to a summary judgment motion on the grounds that her offer letter required her to report and visit its Detroit headquarters and employment agreement contained a Michigan choice of law and venue provision and contained a provision limiting her to bringing claims within one year.   The trial court agreed that the complaint was untimely and dismissed it. She appealed.  While agreeing that such shortened limitations periods have traditionally been enforced, when reasonable, the Court of Appeals reversed and remanded it to the trial court to make choice of law and venue findings.

The relevant employment agreement provided that claims must be filed within one year in the county where the employee was employed:

Limitation Period and Venue. You must assert any claim against the Company or its current or former employees, officers, owners, or agents, within 1 year after your claim arises or within the applicable statutory limitations period provided by law, whichever occurs first. Your failure to do so shall act as a bar to any claim that you may have. Claims must be asserted in the state court located in, or the federal court that has jurisdiction over, the county in which you are or were employed by the Company.

The Agreement also provided that the Agreement would be interpreted under Michigan law.

Assuming that the trial court believed the limitations period was enforceable whether Ohio or Michigan law applied, it dismissed the claims as untimely without conducting a choice of law analysis.   The appeals court found this to be premature and engaged in an extensive discussion about choice of law principles.   While the agreement required it to be interpreted in accordance with Michigan law,  this provision “does not evidence an intent to subject tort claims or other types of claims between the parties to Michigan law.”   Employment discrimination claims are more like tort claims.  This means that Michigan law may not be applicable since its choice of law provision only applied to contract interpretation and not statutory or tort claims.

In this case, the trial court failed to conduct a choice-of-law analysis to determine whether [the plaintiff’s] statutory employment-discrimination claims were properly brought under R.C. 4112.052 or instead governed by Michigan’s analogous employment-discrimination statute. The trial court’s failure to perform this analysis is significant. Without this threshold determination, the trial court could not definitively say whether the one-year contractual-limitations period contained in [her] Employment Agreement was enforceable.

Materially different considerations apply to the enforceability question depending on which state’s substantive law governs [her] claims. If Ohio law governs [her] employment-discrimination claims, the trial court will have to consider how recent amendments to R.C. Ch. 4112 — known as the Employment Law Uniformity Act (“ELUA”) — affect the enforceability of the statute-of-limitations clause, if at all. Prior to the ELUA, this court upheld contractual provisions shortening the limitations period for employment-discrimination claims brought under R.C. Ch. 4112.  . . . . However, the ELUA materially altered the statutory scheme. Among its most consequential changes, the ELUA (1) imposed an administrative-exhaustion requirement, mandating that claimants first file a charge of discrimination with the OCRC and exhaust administrative remedies before initiating a civil action for damages, see R.C. 4112.052(B)(1)(a), and (2) established a two-year statute of limitations for employment-discrimination claims, which tolls during the pendency of the OCRC process, see R.C. 4112.052(C)(1). Ohio courts have not yet assessed the impact, if any, of these changes on the enforceability of contractual limitations periods. But see Logan v. MGM Grand Detroit Casino, 939 F.3d 824, 828-829 (6th Cir. 2019) (holding that the contractual provision setting a six-month limitations period was unenforceable as applied to the plaintiff’s federal-discrimination claims brought pursuant to Title VII which, like the ELUA, imposes a mandatory administrative process and includes a limitations period directly in the statute). (bolding added for emphasis).

On the other hand, if Michigan law governs [her] employment discrimination claims, as the Michigan Supreme Court recently explained, contractual provisions in employment agreements that impose reduced limitations periods are enforceable only if they are reasonable.  . . .  Under Michigan law, the reasonableness of a contractually shortened limitations period is assessed by considering three factors: (1) whether the reduced limitations period in the contract affords the claimant a sufficient opportunity to investigate and file an action; (2) whether the time limitation is so short as to effect a practical abrogation of the right of action; and (3) whether the action would be barred before the loss or damage can be ascertained. . . .

The appeals court rejected the plaintiff’s argument regarding venue and the trial court had never ruled on it. “We do, however, note that on remand if it is determined that venue is not proper in Cuyahoga County but is proper in Michigan, then the Michigan court has authority to make the choice-of-law determination, using that law that applies to that forum.”

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 Sends Stern Warning About AI Hallucinations in Briefs

 From time to time, a client will mention that she is using AI to answer her employment law questions.   Supposedly, AI will replace lawyers at some point in the future.  That may be, but we are not there yet.   Last week, the federal Sixth Circuit Court of Appeals lowered the boom on two law firms that relied on AI to help write their appellate briefs without double checking their accuracy.  They also did not help their cause by challenging the Court's authority to question the validity of their legal skills after it discovered citations to non-existent cases, fabricated quotes from court decisions, fabricated citations to the record, etc.   The Court gave them the chance to explain themselves and to provide copies of the court decisions they cited and/or quoted and they apparently refused.  Accordingly, the Court ordered them to pay their opponents' legal fees for the entire appeal, double their opponents court costs and $15,000 each.   Whiting v. City of Athens, Tenn., No. 24-5918/5919 (6th Cir. 2026). 

AI has a record of hallucinating facts, quote and laws.  Failing to double-check your AI in litigation is remarkably stupid because you can be sure that your opponent will call you out even if the Court's law clerks do not.   In real life, clients that rely on AI do not have an opponent to correct their mistakes until they have been sued for their mistake.   Short cuts may make sense in the short term, but you can be sure that it will cost you in the long run.   In other words, pennywise and pound foolish.     

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 FLSA Complaint Which Failed to Describe Substantial Duties Performed During Uncompensated Lunch Breaks

Last week, a unanimous Sixth Circuit affirmed the dismissal of a FLSA overtime compensation collective action complaint involving automatic unpaid lunch breaks and the denial of an informal request to again amend the complaint.   Westerling v. East Tennessee Children’s Hospital Ass’n, No. 25-5744 (6^th Cir. March 10, 2026).   The Court concluded that the plaintiff’s amended complaint failed to allege that he performed any substantial or compensable duties for his employer during his lunch breaks simply by monitoring his radio.   The Complaint did not, for instance, allege that he was frequently interrupted by substantial duties, which could have been compensable.  The Complaint also failed to describe how other employees performed substantial or compensable work during their uncompensated lunch breaks.  The Court also affirmed the denial of request to amend the complaint again because the plaintiff had failed to make a formal motion or attach a proposed complaint which might have cured its existing deficiencies. 

According to the Court’s decision, the named plaintiff security guard alleged that he was not completely relieved of duties during his lunch break because he had to monitor his radio for emergency calls or events.  However, the hospital employer automatically deducted 30 minutes for a lunch break every day.  Accordingly, he alleged that he was owed unpaid overtime.  Nonetheless, the district court found that he had failed to allege a plausible FLSA claim and dismissed the complaint.  It also denied his belated request to amend his complaint (for a second time) to allege that he had been regularly interrupted during this lunch break because he failed to attach a proposed amended complaint to a motion to amend which would have plausibly cured the current defective pleading.  The Court of Appeals affirmed. 

The Court observed that employers are not required to pay employees for lunch breaks unless

the time is “spent predominantly for the employer’s benefit.” . . . “But as long as the employee can pursue his or her mealtime adequately and comfortably, is not engaged in the performance of any substantial duties, and does not spend time predominantly for the employer’s benefit, the employee is relieved of duty and is not entitled to compensation under the FLSA.”

The complaint fails to plausibly state a FLSA overtime claim. In the complaint, [the plaintiff] alleges that, during meal breaks, he was required to monitor his radio and “respond if some event arose.”   . . . But “monitoring a radio [during a meal break], and being available to respond if called, . . . is not a substantial job duty.”  . . .  It is thus not compensable. If [his] lunch breaks were frequently interrupted because he was responding to calls, that could be compensable.  . . . . But the complaint does not tell us that [he] was frequently interrupted. Instead, it just makes the conclusory assertion that [he] “was not completely relieved of his duties during his daily meal breaks” and that “he did not receive bona fide meal break periods.”  . . .  The complaint must include more to cross the line from possibility to plausibility.  . . . . [He] needed to describe the work he did rather than assert the conclusion that he performed work.  . . .  He did not do so. As a result, the complaint fails to plead sufficient facts showing that his meal periods were compensable time under the FLSA.

The Court also rejected the argument that the general collective allegations that other employees performed work during their unpaid lunch breaks could cure his failure to allege that he performed substantial work during his unpaid lunch breaks. “But the complaint says as little about the work done by other Children’s Hospital employees during meal breaks as it does about [his] work. So even if we could attribute allegations surrounding their work to [him], there would be little, if anything, to supplement.”

Finally, the Court found that the district court did not abuse its discretion in denying an informal request to again amend the complaint to cure the factual deficiencies when the plaintiff failed to make a formal motion or attached a proposed complaint which would have cured the deficiencies.  “A district court does not abuse its discretion when denying leave to amend where the plaintiff “neither moved formally to amend nor proffered a proposed amended complaint.”

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 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.