This Littler Lightbulb highlights some of the more significant employment law developments at the U.S. Supreme Court and federal courts of appeal in the last month.

At the Supreme Court

• Supreme Court Overrules Decades-old Deference to Federal Agencies and Opens Up More Challenges to Regulations

In Loper Bright Enterprises v. Raimondo, __ S. Ct. __ (2024), the U.S. Supreme Court overruled the decades-old Chevron doctrine of judicial deference to a federal agency’s interpretation of an ambiguous statute, holding that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Although the case did not involve a specific employment regulation or agency, it may have a significant impact on employers because of the many employment regulations issued by federal agencies such as the DOL, the EEOC, OSHA, and the NLRB. For more information on the decision and its impact on employers see Littler’s ASAP. For a discussion of other end-of-term decisions impacting agency rulemaking, see Littler’s Insight.

In the Federal Appellate Courts

• Fifth Circuit Rejects NLRB’s Decision and Upholds Management Rights Clause

In Thryv, Inc. v. NLRB, 102 F.4th 727 (5th Cir. 2024), the Fifth Circuit reversed the NLRB’s decision that the company violated the NLRA by laying off six employees without bargaining with the union about the layoffs. The company and the union involved in the case had reached an impasse on a new collective bargaining agreement after the prior agreement had expired, and the company had lawfully implemented its “last best final offer” (LBFO). The LBFO contained a management rights provision that allowed the company to initiate layoffs with 30 days’ notice to employees, and the company complied with all the requirements of the LBFO when laying off the employees. Vacating the NLRB order, the Fifth Circuit stated that although layoffs of employees covered by a union contract are a mandatory subject of bargaining, “[t]his court has long held that employers are permitted to implement management rights clauses (like Article 30) at impasse, and that such clauses in fact privilege employers to take unilateral action on subjects (like layoffs) that would otherwise require bargaining.”

The Fifth Circuit also stated that the NLRB’s remedy, requiring the company to reinstate the employees and “make (them) whole for all the losses incurred as a direct or foreseeable result of the layoffs—a novel, consequential-damages-like labor law remedy,” was “draconian.”

• Eighth Circuit Overturns Jury Trial Win for Plaintiff in ADA Case

The plaintiff in Howard v. City of Sedalia, 103 F.4th 536 (8th Cir. 2024), was a pharmacist who requested to have a diabetic-alert service dog that can detect an impending blood sugar drop accompany her to work in the non-sterile areas of the pharmacy. When her request was denied, the plaintiff filed suit in federal court alleging that the company’s failure to make a reasonable accommodation violated the ADA. Following the court’s denial of the company’s motion for summary judgment, the case went to trial where the plaintiff obtained a jury trial verdict in her favor. The company filed a motion for judgment as a matter of law arguing that the plaintiff failed to show that the service dog accommodation was necessary to access the benefits and privileges of employment and the verdict was against the weight of the evidence. The district court denied the motion, and the company appealed.

On appeal, the Eighth Circuit stated: “Under the controlling regulations, ‘if an adjustment or modification assists the individual throughout his or her daily activities, on and off the job, it will be considered a personal item that the employer is not required to provide.’” (Emphasis in the original). Quoting its recent decision in another ADA accommodation case involving a service dog, the court stated: “Providing a service dog at work so that an employee with a disability has the same assistance the service dog provides away from work is not a cognizable benefit or privilege of employment.” Hopman v. Union Pac. R.R., 68 F.4th 394, 398 (8th Cir. 2023). Accordingly, the court concluded, because the plaintiff did not identify a benefit or privilege of employment that the proposed accommodation would enable her to access, the district court erred in denying the company’s motion for judgment as a matter of law.

• Eighth Circuit Sides with Employer in Another ADA Failure to Accommodate Case

Goosen v. Minnesota Department of Transportation, 103 F.4th 159 (8th Cir. 2024), another Eighth Circuit ADA failure to accommodate case, dealt with a heavy equipment mechanic who sustained an on-the job injury and sought to return to work after an extensive absence for multiple surgeries and rehabilitation.  After a thorough analysis by a Work Analysis Team that concluded the employee could not perform the essential functions and physical requirements of his job and that there were no viable accommodations available, including reassignment to another position, the employer informed the employee it considered him to have voluntarily resigned from his position.  The employee filed suit in federal district court claiming the company discriminated against him because of his disability in violation of the ADA by failing to accommodate him.

The district court granted summary judgment to the employer on the grounds that “no reasonable jury could find either that [the plaintiff] was qualified to perform the essential functions of his former position or that a reasonable accommodation was possible.”  The Eighth Circuit agreed. The court based its conclusion that the plaintiff could not perform the essential functions of his job on the job description, the experience and insight of the plaintiff’s supervisors, the tasks required to complete each job function, and the amount of time mechanics spent accomplishing their job responsibilities. Similarly, the Eighth Circuit found that plaintiff’s work restrictions would limit his ability to do the work in the alternative position he proposed as a reasonable accommodation. Accordingly, the court held, the plaintiff failed to satisfy his burden of showing a reasonable accommodation was available.

• Second Circuit Upholds Dismissal of ADA Claim Regarding Required COVID-19 Vaccine

Sharikov v. Philips Medical Systems MR, 103 F.4th 159, (2d Cir. 2024), involved an employee who was terminated from employment after refusing to comply with the employer’s requirement that all U.S.-based employees provide proof of vaccination against COVID-19 or have requested and qualified for a reasonable accommodation. Following his termination, the employee filed suit in federal district court alleging that the company violated the ADA because it regarded him as having a disability or a record of a disability “based upon the pure speculation, stereotype and generalization that he was infected or may in the future become infected with a deadly, contagious disease.” The district court granted the company’s motion to dismiss finding that the plaintiff “failed to plausibly allege a disability under the ADA because he alleged only that [the company] viewed him as ‘potentially infectious,’ rather than having a current impairment.”

Noting that the company-wide policy applied to all employees, the Second Circuit affirmed the district court’s dismissal of the plaintiff’s claim, holding that “discharging an employee for failing to comply with generally applicable safety policies does not, without more, equate to impermissible discrimination under the ADA.”

• Seventh Circuit Affirms Summary Judgment, Finding Alleged Sexual Harassment Was Not Sufficiently Severe or Pervasive

Following her termination from employment for poor performance, the plaintiff in Anderson v. Mott Street, 104 F.4th 646 (7th Cir. 2024), sued her employer in federal court alleging sexual harassment, sex discrimination, and retaliation under Title VII. The district court granted the employer’s motion for summary judgment on all claims and the plaintiff appealed.

In support of her sexual harassment claim, the plaintiff, who was a restaurant host, asserted that patrons touched her inappropriately, a coworker grabbed her buttocks once and hugged her inappropriately two or three times, the bar manager called her a “bitch,” and the co-owner and general manager told her to wear tight, form-fitting clothes because it looked better on her. First, citing prior Seventh Circuit precedent, the appeals court stated that a company is not liable for the actions of its customers without evidence that the company recklessly permitted the behavior. As to the remaining sexual harassment allegations, the Seventh Circuit concluded that, even construing all material facts in the plaintiff’s favor, the conduct was not “so severe or pervasive as to alter the conditions of employment.” In reaching this conclusion, the court held the factors to be considered include “the severity of the allegedly discriminatory conduct, its frequency, whether it was physically threatening or humiliating or merely offensive, and whether it unreasonably interfered with the employee’s work performance.”

As to her sex discrimination claim, the Seventh Circuit found the plaintiff failed to establish that a similarly situated individual was treated differently, nor could she rebut the employer’s legitimate, non-discriminatory reasons for firing her. Similarly, as to her retaliation claim, the court concluded there was no causal link between plaintiff’s complaints of harassment and the employer’s adverse action – a necessary element of a Title VII retaliation claim.

• Eleventh Circuit Holds FMLA Does Not Cover Father’s Pre-Birth Leave

The main issue in Tanner v. Stryker Corp. of Michigan, 104 F. 4th 1278 (11th Cir. 2024) was whether a father is entitled to FMLA leave prior to the birth of his child. The plaintiff in the case, who had been approved to take FMLA leave following the birth of his child, worked in Florida and traveled to Connecticut, where the baby’s mother lived, in anticipation of the birth, which occurred two weeks later. While in Connecticut the employee used up all his remaining sick leave and paid time off to cover part of his absences. Upon his return to work, following the child’s birth, the employee was terminated for excessive absenteeism under the company’s policy. He filed suit in federal court for interference with his rights under the FMLA and for retaliation for exercising those rights. The court granted summary judgment to the employer and the plaintiff appealed.

The Eleventh Circuit affirmed the district court’s rejection of the plaintiff’s claim that the FMLA must be read to cover pre-birth leave. Although the FMLA provides pre-birth leave to an expectant mother for incapacity due to pregnancy and to a father “if needed to care for a pregnant spouse who is incapacitated,” the court held, the plaintiff did not meet any of those requirements.  The Eleventh Circuit also upheld summary judgment for the company on plaintiff’s retaliation claim finding his excessive absenteeism, in violation of the company’s policy, not his use of FMLA leave following his child’s birth, was a legitimate non-discriminatory reason for his termination.