In case you missed it, these are a few brief summaries of recent court decisions involving employment law.
Supreme Court
Rehab Act Damages. A divided court held that individuals pursuing private entities under the Rehabilitation Act of 1973 and the Affordable Care Act (ACA) are limited to recovering damages which are generally available in breach of contract actions between private Cummings v. Premier Rehab Keller PLLC, 142 S. Ct. 1562 (2022). A legally blind and deaf patient requested that a physical therapy practice provide an ASL interpreter for her sessions. The practice refused and offered alternative accommodations. The patient sought treatment elsewhere and brought suit against the practice – not under the Americans With Disabilities Act’s (ADA) public accommodation provisions – but under the Rehab Act and ACA, which applied to the defendant practice because it received reimbursement from the federal government through Medicare and Medicaid. The Supreme Court had previously held such actions are governed by the Constitution’s Spending Clause and can only support damages that are generally available for breach of contract actions, which do not include punitive damages. In this case, the plaintiff only sought recovery for emotional distress damages, which are also not generally available in breach of contract actions.
Jurisdiction Over Arbitration Awards. While the Federal Arbitration Act (FAA), 9 S.C. §1 et seq. gives federal courts the power to hear disputes over arbitration, the court had previously ruled that the FAA does not create federal question jurisdiction. Accordingly, federal courts – as courts of limited jurisdiction – must examine the underlying complaint to find federal question or diversity jurisdiction before entertaining petitions to compel arbitration under §4. In this case, an employee sought to vacate through state court an adverse arbitration award concerning her federal and state discrimination claims. Badgerow v. Walters, 142 S. Ct. 1310 (2022). The employer, citing federal question jurisdiction, removed the case to federal court and sought to confirm the award. Federal courts have the power under §§ 9 and 10 of the FAA to vacate and confirm arbitration awards. However, the Court held that the “look-through” authority to find the underlying federal question only applied to petitions to compel brought under §4 and not to petitions to vacate or confirm brought under §§ 9 or 10. Unlike §§ 9 and 10, §4 specifically explains that petitions may be filed with the federal court which would have jurisdiction “save for [the arbitration] agreement.” Sections 9 and 10 merely refer to filing the petition in the court where the award was made; they do not specifically refer to the question of jurisdiction. The omission of a reference to jurisdiction in §§ 9 and 10 was deemed deliberate by Congress. Moreover, the Court found that a federal question was not implicated by the dispute underlying the arbitration award because arbitration awards are creatures of contract. Analogizing arbitration agreements and awards to other types of contracts, the Court explained that merely because settlement agreements sometimes resolve disputes over federal law, this does not make a breach of the settlement agreement a federal question. Rather, breach of the agreement remains a state law issue.
Sixth Circuit
ADA. A divided court reversed an employer’s summary judgment on the failure-to-accommodate claim of an ER nurse. King v. Steward Trumball Memorial Hospital, 30 F.4th 551 (6th Cir. 2022). After calling off each shift for two weeks because of her asthma, the plaintiff alleged that she formally requested medical leave on May 19, only to be told that she was ineligible under the Family and Medical Leave Act (FMLA). While she tried to have the employer’s erroneous payroll calculation corrected, she was terminated on June 2 for failing to timely seek medical leave. Even after the payroll records were corrected, she was still not eligible for FMLA Nonetheless, she was then retroactively given only two weeks of non-FMLA medical leave, but was not reinstated. The Court concluded that a request for a temporary medical leave was reasonable and could be retroactively applied. The employer had a history of granting retroactive applications of leave requests and could not deem her request to be indefinite (and thus, unreasonable) when it was disputed whether she was given the chance to express the duration of her alleged May 19 request. The employer failed to engage in the interactive process after being put on notice of her leave request and failed to accommodate her when it terminated her employment despite her eligibility for a temporary non-FMLA leave of absence. Finally, the employer could not suffer an undue hardship when the duration of her leave request was within the scope of its own policies. Notably, the Court agreed that her calling off work every shift for two weeks was not a request for a medical leave of absence.
ADA. The court affirmed an employer’s summary judgment on an ADA failure-to-accommodate claim when the employee failed to obtain medical information clarifying his sought accommodation as requested by the defendant Stover v. Amazon.com LLC, No. 21-5421, 2022 U.S. App. LEXIS 737, (6th Cir. 1-10- 22). His initial inquiries were deemed too vague to constitute a request for a reasonable accommodation and his failure to support his own clarification with any medical documentation from his physician constituted an abandonment of the reasonable accommodation process. Therefore, the employer was not required to grant his requests.
Discriminatory Hiring/Evidence. The court reversed an employer’s summary judgment in an age discrimination failure-to-hire case, but affirmed dismissal of the plaintiff ’s retaliation Aday v. Westfield Ins. Co., No. 21-3115, 2022 U.S. App. LEXIS 737 (6th Cir. 1/24/22).
The court discussed alternative ways for a plaintiff to prove that an employer’s explanation is pretextual in a failure to hire case and permitted the case to be resolved by a jury based on only two ageist comments from debatable decisionmakers. The Court agreed that the plaintiff had not proven that he was the plainly superior candidate, in part because of the comparative leadership experience and because that he wanted to remotely manage his team from Seattle, far away from any company office. However, when considering what would typically be “stray remarks” from arguable non- decisionmakers that may have indicated an age bias and a discriminatory workplace atmosphere, together with evidence that he had comparable qualifications to the successful candidates, the Court found sufficient evidence of pretext to let a jury decide the outcome. The Court also rejected the argument that the employer's counterclaim was objectively baseless.
Title VII. The court reversed an employer’s summary judgment, finding that considering an employee’s race when making shift assignments in order to ensure a diverse management team could constitute actionable race discrimination and was not a de minimis Threat v. City of Cleveland, 6 F.4th 672 (6th Cir. 2021). “When an employee’s race is a basis for a shift change that denies the privileges of that employee’s seniority, the employer has discriminated on the basis of race in the terms and privileges of employment.” It rejected the argument that a shift assignment was never a material adverse employment action. “The point of our cases is to convey that an employer’s alteration of the ‘terms’ or ‘privileges’ of an employee’s work is actionable only when it is ‘adverse’ and ‘material’ to the work.” Moreover, “to give the de minimis rule too broad a reach would contradict congressional intent by denying proper effect to a statute.” The Court also dismissed the argument that Title VII only reaches employment decisions which cause economic harm when the statute reaches not only discrimination in compensation but also discrimination in other terms, conditions and privileges of employment.
Workplace Harassment. The ourt affirmed an employer’s summary judgment on workplace harassment and retaliation claims where the plaintiff had alleged that the employer’s investigation and response to the harassment claims were inadequate and denied her a promotion in retaliation for her complaints. Doe v. City of Detroit, 3 F.4th 294 (6th 2021). The plaintiff had been subjected to anonymous threats by a coworker. Although the employer interviewed a suspect following the second incident, it did not interview him following any of the death threats. The Court affirmed dismissal of the hostile work environment claims because the employer’s response to each incident was reasonable and the final action – in inadvertently suspending and relocating the suspect – was apparently effective, and thus reasonable, in ending the anonymous harassment. The Court also found no evidence that the plaintiff had been denied a promotion on account of her prior harassment complaints.
FCA/Limitations Accrual. The court affirmed the employer’s judgment on a False Claim Act retaliation claim on the grounds that the lawsuit had been filed five days too late. El-Khalil v. Oakwood Healthcare, Inc., 23 F.4th 633 (6th Cir. 2022). The physician alleged that his employment agreement with the defendant hospital had not been renewed because he had reported to the federal government false Medicare claims being filed by the hospital’s staff. He had appealed the denial of his staff privileges under the medical bylaws. The final step of the process was made to a joint conference committee, which heard oral argument and, after the physician had left for the evening, voted to affirm the denial on Sept. 22, notifying him in writing on Sept. 27. He filed suit against the hospital three years later on Sept.27. The hospital moved to dismiss on the grounds that his lawsuit was untimely. The Court agreed, finding that the decision had been made and verbally announced on Sept. 22 – more than three years before he filed suit. According to the statute, 31 U.S.C. § 3730(h)(3): “Such an action ‘may not be brought more than three years after the date when the retaliation occurred.” Unlike other employment statutes, Congress did not create a discovery rule under the FCA retaliation provision based on when notice is provided. “The statute simply adopts ‘the standard rule’ that the limitations period begins when the plaintiff ‘can file suit and obtain relief.’”
Title VII. The court affirmed an employer’s summary judgment on Title VII sexual orientation and retaliation claims where the plaintiff had been fired for misconduct a year after being hired and after receiving several promotions and raises. Boshaw v. Midland Brewing Co., 32 F.4th 598 (6th Cir. 2022). The Court found it speculative that his sexual orientation was held against him when he received three promotions within eight months of being hired even though he never hid his sexual orientation on his Instagram account and reposted it on his Facebook account after his first promotion. It is not illegal to discriminate against, or request an employee to change, their “spiky” hairstyle or visible body piercings. Further, the passage of three months between his protected activity and his termination was “a firm indicator of a lack of a causal link.” Finally, he could not plead or prove a hostile work environment based on a few isolated and discrete discriminatory actions.
Scope of Arbitration Clause. The court held that the arbitration agreements of the individual employee class plaintiffs – which explicitly mentioned Employee Retirement Income Security Act (ERISA) claims -- did not apply to an ERISA plan on whose behalf the employees brought an ERISA breach of fiduciary duty action against the employer. Hawkins v. Cintas Corp., 32 F.4th 625 (6th Cir. 2022). The plaintiffs alleged that the employer had breached its fiduciary duty to the plan by failing to include passively-managed fund options in the plan and charging the plan excessive fees. “Section 502(a)(2) suits are ‘brought in a representative capacity on behalf of the plan as a whole.’” The court distinguished the arbitration clause, which covered only “claims” and not the plaintiffs’ “rights” to bring a fiduciary duty claim on behalf of the ERISA plan. “Had Plaintiffs brought a claim under § 503(a)(1)(B), or a claim that should have been brought under that section, then it might be the kind of individual claim subject to arbitration under an individual participant’s employment agreement.” Further, the court refused to impute to the plan the employer’s agreement to arbitrate. There was no evidence that the plan itself had agreed to arbitrate its claims or to permit the plaintiffs or the employer to agree on its behalf. “In the absence of a sufficient manifestation of the plan’s consent to arbitrate these claims, we hold that the plan has not consented to arbitration.”
Ohio Supreme Court
The court held that “[a] public official cannot be held strictly liable for the misappropriation of public money when neither the official nor any of the official’s subordinates collects or receives, and therefore does not control, the funds.” State ex rel. Yost v. Burns, No. 2022-Ohio-1326. In construing R.C. § 9.39, the Court found that the charter school’s CEO “is not strictly liable for the embezzled funds, because he did not receive or collect the public money that was misappropriated” by an independent contractor hired and supervised by the school’s board as its treasurer.
Ohio Courts
Disability Discrimination. The Franklin County Court of Appeals reversed in major part an employer’s judgment on a disability discrimination claim brought by a terminated day care worker with a genetic heart condition which made her susceptible to infections. Anderson v. Bright Horizons Children's Ctrs., L.L.C., 2022-Ohio-1031. The Court agreed that the plaintiff could not show that she was “disabled” under Ohio law because O.R.C. §4112.02 – unlike federal law – does not include “operation of a major bodily function” as a disability. The Court also rejected her argument that she had requested a reasonable accommodation with vague statements. However, the Court found sufficient evidence for trial about whether the plaintiff was “regarded as” disabled and had suffered an adverse employment action on account of her heart condition when she had, within the week before her termination (for failing to call off work for several days), disclosed that she suffered from a heart defect which was causing her attendance issues and there was a factual dispute as to whether she was even required to call off after being taken off the work schedule. The Court also revived a claim against the plaintiff 's former supervisor for aiding and abetting the employer's alleged discrimination.
Disability Discrimination. The Franklin County Court of Appeals affirmed a trial court judgment in favor of a plaintiff who alleged disability discrimination and failure to Coomer v. Opportunities for Ohioans with Disabilities, 2022- Ohio-387. The plaintiff had requested to return to her former work schedule in order to control her late afternoon anxiety. Although the employer conceded that this was not a burdensome request, it denied the request on the grounds that it was unpersuaded that the schedule change was necessary prior to exploring other alternatives and because of her recent inadequate productivity. The trial and appellate courts found that changing her work schedule was necessary to control her anxiety and that the employer had constructively discharged her by denying the accommodation.
Restrictive Covenants. The Cuyahoga County Court of Appeals affirmed a trial court’s limited enforcement of a noncompete clause imposed on a burn surgeon. MetroHealth Sys. v. Khandelwal, 2022-Ohio-77. The trial court had refused to enforce any restriction on the surgeon practicing medicine, but shortened the two-year restrictions to one year on the physician acting in a leadership capacity for a competitor within the restricted territory and from soliciting patients, employees or referral sources. “The prevention of ordinary competition is not a legitimate business interest that can be protected by a restrictive covenant.” The evidence established that most patients chose the closest burn center, making competition for patients relatively rare. The trial court had indefinitely enjoined the physician from using proprietary information and left pending tortious interference claims.
Retaliation/Reasonable Accommodation. The Crawford County Court of Appeals affirmed an employer’s summary judgment on claims asserting that the plaintiff had been terminated for requesting a reasonable accommodation. Hall v. Crawford County Job and Family Services, No., 2022-Ohio- 1358. The court held that requesting a reasonable accommodation is not a protected activity under §4112.02(I) which can support a retaliation claim. Rather, denying a reasonable accommodation may be unlawful discrimination, but the request itself is not a protected activity for purposes of a retaliation claim. Further, the Court found that the plaintiff had voluntarily disclosed her disability to her employer and it was justified in requesting a fitness-for-duty examination when she claimed her disability adversely affected her job performance and submitted an FMLA request.
Discrimination/Retaliation. The Franklin County Court of Appeals affirmed the employer’s summary judgment on a discrimination claim, but reversed summary judgment on a retaliation claim, finding sufficient evidence for a trial on whether the plaintiff was subjected to a workplace investigation and potential termination in retaliation for a Charge of Discrimination he had filed two months earlier. Moody v. Ohio Dept. of Mental Health & Addiction Servs., 2021-Ohio- 4578. The plaintiff alleged that he was subjected to discrimination when he was given a paid, three-day suspension for being hours late to work due to a misunderstanding about the work schedule. During a later, unrelated investigation, the plaintiff alleged that coworkers had mistreated patients, but he had never filed formal incident reports about any of those incidents. He was then investigated for failing to timely file those incident reports and threatened with a five-day suspension or termination. He resigned and filed suit. The Court found that a paid three-day disciplinary suspension which did not affect the plaintiff ’s compensation, status or other terms and conditions of employment could not constitute a material adverse employment action for purposes of employment discrimination. However, subjecting the plaintiff to a workplace investigation two months later could constitute an actionable retaliatory action and was sufficiently close in time to his protected conduct of filing a Charge of Discrimination. The Court also found sufficient evidence of pretext when the employer’s explanation was challenged by an independent witness who agreed with the plaintiff that there was no mandatory duty to file a formal incident report for relatively minor infractions which could be adequately resolved by verbally reporting them to the charge nurse.
