Employment & Labor Insider

The 2024-25 term of the U.S. Supreme Court is over. Two decisions at the end of the term directly addressed employment law issues, and two others will have an indirect impact on employers. Here is what you need to know:

No. 1: Expect more “reverse discrimination” claims. In Ames v. Ohio Dep’t of Youth Services, a straight woman alleged that she was passed over for a promotion and then demoted, in both cases because she was not gay. Colin Finnegan of our Kansas City Office has more details about the Court’s decision here.

Before the SCOTUS decision was issued, a number of circuits were requiring plaintiffs in Title VII “reverse discrimination” cases to prove more than plaintiffs in “traditional discrimination” cases. Specifically, the “reverse discrimination” plaintiff had to show, in addition to the usual, that there were background circumstances indicating that the defendant was the “unusual employer that discriminates against the majority group.” In Ames, the Supreme Court unanimously said that this was not required by Title VII and that the statute provides the same protections to -- and imposes the same burdens of proof on -- everyone.

As a result, employers can expect an increase in discrimination claims brought by "majority group" employees alleging that they were treated less favorably than similarly situated "minority group" employees – and more of those claims are likely to get to the summary judgment stage, or even trial.

The lesson: Be sure you are applying the same qualification and disciplinary/discharge standards to everybody, regardless of protected category, and that you can prove it if necessary.

No. 2: Don’t expect that ADA decision to be a lot of help. In Stanley v. City of Sanford, Florida, the Court majority decided that the Americans with Disabilities Act does not apply to individuals who are not employed or currently seeking employment. The City provided health insurance benefits until age 65 for anyone who retired with at least 25 years of service, and to anyone who retired earlier because of a disability. However, in 2003, the City amended the policy to say that employees who took disability-related retirement before the 25-year point got only 24 months of coverage. The plaintiff retired due to a disability before she had 25 years of service, and she sued, contending that the 2003 policy violated the ADA.

I struggled with the Court's decision for two reasons:

First, at least in the abstract I think offering lesser benefits to someone because they have a disability should violate the ADA, even if the beneficiary is no longer able or willing to work. In my view, they "earned" it when they were still working. 

However, I do not see how the 2003 policy can be considered discriminatory. (The lawsuit was dismissed at the earliest stage, so the courts had to assume that the plaintiff's allegations were true. And the only issue before the lower courts was whether the ADA applied at all to a retiree who wasn't trying to come back to work.)

But a person who worked for the City less than 25 years (whether disabled or not) is not similarly situated to a person who has worked for the City for 25 years or more. Employees with disabilities who have at least 25 years of service are presumably eligible for the health insurance through age 65. Employees without disabilities who retire with less than 25 years of service presumably don't even get the 24 months of coverage, so they are worse off than employees who retire early because of disabilities. 

In any event, the Supreme Court majority said that the ADA does not apply to “discrimination against retirees who neither hold nor desire a job whose essential tasks they can perform with reasonable accommodation.” So, the decision is a win for employers.

But maybe not that big a deal. Four members of the Court (Justices Neil Gorsuch, Samuel Alito, Elena Kagan, and Sonia Sotomayor) agreed that the ADA could apply to discrimination in retirement benefits if the policy is challenged when the change takes effect, when the change first affects the plaintiff, or when the plaintiff first becomes subject to the change (as long as the plaintiff was able to work with or without a reasonable accommodation or was seeking work at the time). The plurality acknowledged that even the plaintiff in this case might be able to revive her ADA claim with an amended complaint.

Overall, I don’t think this decision will have that much of a real-world impact on employers, apart from possibly resulting in more early challenges to changes in retirement-related benefits.

No. 3: Accommodate employees who ask to “opt out” of certain training or employment requirements that violate their religious beliefs. Mahmoud v. Taylor was not an employment case. It was a case involving public school parents in Maryland who wanted to receive prior notification about classes and required reading on certain LGBTQ-related subjects, and wanted to be able to opt out on behalf of their kids. The Court majority ruled that the parents were entitled to a preliminary injunction, meaning that they have to be accommodated in these ways “until all appellate review in this case is completed.”

The case was decided on constitutional grounds, which would not apply in private sector workplaces. But it is clear that the current Court majority favors accommodation of sincerely-held religious beliefs, even (especially?) if those beliefs swim against the tide. Employers can and should continue to insist that all employees be treated with courtesy and respect, and they should comply with any applicable (and valid) state and local laws. But it should be possible to do this while accommodating employees with traditional religious beliefs.

Benjamin Rowley of our Chicago Office has a good discussion about how employers should be handling these issues in the current legal environment.

No. 4: Be careful what you ask for: no more universal injunctions. David Phippen will have a more comprehensive bulletin soon about the Court’s decision in Trump v. CASA, Inc., in which the majority decided that universal injunctions, also known as “nationwide” injunctions, should almost never be issued. (The case involved a challenge to the Trump Administration’s Executive Order on birthright citizenship, but the Court did not rule on the validity of the Order.)

I’m not convinced that the end of most universal injunctions is going to be a boon for employers. For example, in late 2016, a federal court in Texas issued a preliminary nationwide injunction stopping the Obama Administration from putting into effect significantly higher salary thresholds for certain exemptions from the minimum wage and overtime requirements of the Fair Labor Standards Act. That was good for employers, right?

After the Court’s decision in the CASA case, plaintiffs will still be able to challenge federal regulatory action under the Administrative Procedure Act, and they may be able to get universal injunctions blocking any type of federal action by filing class action lawsuits.

The CASA plaintiffs have not let the grass grow under their feet. Last Friday, they refiled their challenge to the Trump Administration’s birthright citizenship Executive Order as a class action. 

Happy Fourth, everybody!