In Case You Missed It This Summer

I've been busy this summer and am catching up (for my dear readers) with important decisions from the Supreme Court and Sixth Circuit. 

 In June, the Supreme Court held that retirees are not  “qualified individuals” under the ADA when they neither hold nor desire a job whose essential functions they can perform with a reasonable accommodation.   Stanley v. City of Sanford, 145 S. Ct. 2058  (2025).  The plaintiff was hired in 1999.  The employer’s policy of providing medical benefits until age 65 changed in 2003 to only two years when an employee retired with a disability before age 65 and before achieving 25 years of service.  The plaintiff retired due to a disability prior to age 65 and after only 19 years of service. The ADA statute “made it unlawful to ‘discriminate against’ someone who ‘can perform the essential functions of’ the job she ‘holds or desires." The Court construed "those [present tense] verbs to suggest that the statute does not reach retirees who neither hold nor desire a job at the time of an alleged act of discrimination.”  In addition, the suggested reasonable accommodations in the statute involve current employees or applicants, not retirees.  Finally, the retaliation provision protects any individual, not just qualified individuals, suggesting different standards would apply.

In August, the Sixth Circuit Court of Appeals affirmed the employer’s summary judgment on a sexual harassment, retaliation and racial discrimination claim.  Bivens v. Zep, Inc.  147 F.4th 635 (6^th Cir. 2025).   The plaintiff had been asked on a date by a client.  When she reported it to her supervisor, the client was reassigned away from her to avoid a repeated uncomfortable situation.  Later, the Company laid off sales employees, including plaintiff, with territories below a financial threshold.  She could not identify anyone who was hired to take over her territory.   The Court held that employers are not automatically liable for their clients’ or customers’ behavior without some evidence of an intent to discriminate or harass, which was completely absent in this case.   Ellerth liability assumes an agency relationship between the employer and the harasser and that is generally absent when the alleged harasser is a customer. 

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 badge swipes and 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 failed to take the plaintiff’s complaint of retaliation seriously or to compare her misconduct to other employees before terminating her employment.

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 Supreme Court Reminder That Acts of Agents Do Not Always Impose Vicarious Liability

Last week, the Ohio Supreme Court reversed the lower court judgments imposing vicarious liability upon a real estate broker for the fraudulent actions of its real estate agent without requiring the plaintiff to prove that the agent was acting within the scope of her agency.  Auer v. Paliath, Slip Opinion No. 2014-Ohio-3632.  In Auer, the plaintiff alleged and the jury found the defendant agent and broker to be liable for fraudulently inducing the plaintiff to purchase five properties (for which the agent and broker received sales commissions) and hire the agent’s personal rehabilitation business to maintain them.  The properties were never maintained as promised and the plaintiff lost her $430K investment.   The lower courts concluded that the broker was vicariously liable as a matter of law because Revised Code § 4735.21 imposed liability as a matter of law since the agent could not sell the properties and collect funds without the broker’s consent.  “In essence, the court of appeals’ decision holds that a broker is always liable as a matter of law for the tortious conduct of rogue agents whenever the broker receives a portion of the agent’s sales commission.”   The Court rejected this “bright-line rule” and held that “in order to impose vicarious liability, a jury first has to make a factual determination that the agent was acting within the scope of her agency when she committed the torts at issue.” 

Whether the agent’s actions were authorized by the broker is always a factual question to be resolved by a jury.   In this case, the agent’s fraud was arguably to further her rehabilitation business, not to further the business of the broker.  Accordingly, the trial court should have left it to a jury to decide whether the broker should also be held liable for the agent’s fraud.   

The dissent concluded that the omission of a few words from the jury instruction was harmless error.

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.