Supreme Court Expands Rule 60(b) Relief: Implications for Voluntary Dismissals and Arbitration Challenges
In Waetzig v. Halliburton Energy Services, Inc., the U.S. Supreme Court expanded the scope of Federal Rule of Civil Procedure 60(b), holding that a voluntary dismissal without prejudice under Rule 41(a) constitutes a “final proceeding” eligible for post-dismissal relief. This decision may open the door for plaintiffs to attempt to reinstate voluntarily dismissed claims, raising concerns about litigation finality and increasing risks for corporate defendants.
Case Overview
Gary Waetzig, a former Halliburton employee, sued the company for age discrimination in federal court before voluntarily dismissing his case without prejudice to pursue arbitration. After losing in arbitration, Waetzig sought to reopen his dismissed federal lawsuit and vacate the arbitration award under Rule 60(b), arguing his dismissal was filed in error. The district court granted Waetzig Rule 60(b) relief and vacated the arbitration award, but the Tenth Circuit reversed, holding that a voluntary dismissal without prejudice does not satisfy Rule 60(b)’s definition of a “final judgment, order, or proceeding.” On appeal, the Supreme Court reversed the Tenth Circuit, finding that Waetzig’s voluntary dismissal indeed qualified as a “final proceeding” eligible for Rule 60(b) relief. However, the Supreme Court declined to address whether the district court had jurisdiction over Waetzig’s motion to vacate the arbitration award or whether the district court’s decision vacating the arbitration award was otherwise proper.
Key Takeaways from the Supreme Court’s Decision
1. Voluntary Dismissals as “Final Proceedings” – The court determined that a voluntary dismissal without prejudice pursuant to Rule 41(a) is a “final proceeding” under Rule 60(b) because it removes the case from the docket and terminates active litigation. 2. General Rule for Voluntary Dismissals and Statute – When a plaintiff voluntarily dismisses a case without prejudice under Rule 41(a), the general rule is that the statute of limitations continues to run as if the case had never been filed. If the plaintiff refiles after the limitations period has expired, the claim is typically barred unless a state or federal savings statute applies. Waetzig does not alter this rule; it does not grant an automatic tolling effect to voluntary dismissals. 3. Implications for Statute of Limitations – If a court grants Rule 60(b) relief from a voluntary dismissal, the original case is reinstated rather than refiled as a new lawsuit. This could allow plaintiffs to bypass the statute of limitations issue because the original filing date remains intact. The court in Waetzig does not explicitly address this issue, but the risk arises because Rule 60(b) relief is often granted without regard to whether the statute of limitations has since expired. Defendants may now face arguments from plaintiffs that reopening a dismissed case under Rule 60(b) is permissible even if the statute of limitations would otherwise have barred refiling as a new lawsuit. 4. State “Savings Statutes” – Many states have “savings statutes” that allow a plaintiff to refile a voluntarily dismissed lawsuit within a specified period (e.g., six months or one year), even if the statute of limitations otherwise has expired. Under Waetzig, the availability of Rule 60(b) relief after a voluntary dismissal could allow plaintiffs to argue that they should not be constrained by savings statutes because they are reopening the original case rather than refiling it. Courts may need to address whether Rule 60(b) relief can extend beyond the time limits imposed by savings statutes, further complicating the statute of limitations analysis. 5. Arbitration Finality at Risk – Plaintiffs who dismiss cases without prejudice pre-arbitration may now attempt to vacate arbitration awards by moving to reopen those originally dismissed lawsuits, creating an additional avenue for challenging arbitration results. 6. Broader Interpretation of “Finality” – The Supreme Court rejected Halliburton’s argument that “final” under Rule 60(b) should align with appellate jurisdiction principles requiring a decision on the merits, broadening the interpretation of Rule 60(b).
Strategic Implications and Risk-Mitigation Considerations for Corporate Defendants
1.
Strengthen Language in Arbitration Agreements – Waetzig introduces a potential mechanism to challenge arbitration outcomes, requiring companies to reassess arbitration agreements and ensure dismissals are carefully structured. Defense counsel should consider insisting on stronger arbitration clauses, such as explicit waiver provisions in voluntary dismissals, to potentially limit post-dismissal challenges and reinforce that arbitration is binding and cannot be undone via procedural maneuvers. Consider updating arbitration agreements to include language such as, “Any dismissal of litigation arising from this Agreement, whether voluntary or involuntary, shall be deemed final and irrevocable, and Plaintiff waives any right to seek relief under Federal Rule of Civil Procedure 60(b) or any similar rule.”
2.
Monitor Previously Dismissed Claims – While Rule 60(b) motions generally must be filed within a “reasonable time,” motions under Rule 60(b)(1), (b)(2), and (b)(3)—based on mistake, newly discovered evidence, or fraud—must be filed within one year. Additionally, counsel may wish to argue that any attempt to reopen a dismissed case after the statute of limitations has expired is inherently unreasonable, as it causes prejudice and undue delay.
3.
Document Plaintiff Representations Regarding Dismissal – Consider documenting evidence that a plaintiff dismissed their case knowingly and voluntarily to reduce the chance of a successful Rule 60(b) motion. If a plaintiff voluntarily dismisses a case, defense counsel may request plaintiff confirm in writing that they understand the dismissal is final and that they are choosing to forgo litigation, rather than seeking a stay or alternative resolution. Additionally, in jurisdictions with savings statutes that permit refiling within a limited period (e.g., six months or one year), defendants may wish to ensure that any written acknowledgment from plaintiff explicitly states that they are aware of and voluntarily assuming the risk of any applicable statute of limitations consequences.
4.
Include Protections in Stipulation of Dismissal – To reduce the risk of plaintiffs attempting to reopen a case under Rule 60(b), counsel should consider including language in the Stipulation of Dismissal that plaintiff waives the right to reopen the case or otherwise seek relief under Federal Rule of Civil Procedure 60(b).
The Supreme Court’s decision in Waetzig expands the scope of Rule 60(b) relief, creating new risks for defendants by enabling plaintiffs to revive voluntarily dismissed claims, even in scenarios where statute-of-limitations concerns might otherwise arise. While the decision creates uncertainty, defendants can address potential exposure through updated litigation strategies, stronger arbitration agreements, and carefully structured dismissals designed to protect against future challenges.
Federal Judge Denies Bid to Stay Preliminary Injunction Blocking President Trump’s DEI-Related Executive Orders
On March 3, 2025, a federal judge in Maryland refused to halt a preliminary injunction blocking key parts of two of President Donald Trump’s executive orders (EO) seeking to eliminate “illegal” diversity, equity, and inclusion (DEI) programs and initiatives in the federal government and in federal contracting.
Quick Hits
A federal judge maintained a preliminary injunction blocking key provisions of President Trump’s executive orders aimed at DEI initiatives, finding that the government had failed to show a reason to halt the injunction pending appeal.
The judge rejected the Trump administration’s argument that the preliminary injunction prevents the executive branch from implementing its policies, noting that such policies must still comply with the United States Constitution, particularly in this case, free speech and due process rights.
The Trump administration is appealing the preliminary injunction ruling, indicating that the constitutionality of the EOs will continue to be litigated, potentially reaching the Supreme Court of the United States.
U.S. District Judge Adam B. Abelson denied the Trump administration’s motion to stay the preliminary injunction issued on February 21, 2025, in the case brought by a coalition of DEI advocates. The judge found the Trump administration had failed to show a stay was warranted, given the plaintiffs’ likelihood of successfully establishing on the merits that the enjoined parts of the EOs violate free speech and are unconstitutionally vague.
In seeking a stay of the preliminary injunction, the Trump administration argued that it had demonstrated a likelihood of success on the merits and that the plaintiffs had only alleged speculative harms; that the injunction harmed “intra-executive policy implementation by enjoining the President’s policy directives to federal agencies”; and that the preliminary injunction improperly prevented federal agencies from enforcing antidiscrimination laws.
However, Judge Abelson said that he had already considered and rejected the government’s argument regarding its likelihood of success on the merits and that the policy goals of the executive branch must still comply with the Constitution.
“As the Court explained in its memorandum opinion granting the preliminary injunction, the executive branch is obviously entitled to have policy goals and to pursue them,” Judge Abelson said in the decision denying the stay. “But in pursuing those goals it must comply with the Constitution, including, as relevant here, the Free Speech Clause of the First Amendment, and the Due Process Clause of the Fifth Amendment.”
Judge Abelson stated that the blocked provisions of the EOs seek to “punish, or threaten to punish, individuals and institutions based on the content of their speech,” thereby discriminating against viewpoints disfavored by the administration, likely in violation of the First Amendment. Judge Abelson observed that the provisions appear to target “purely private persons” and leverage funding to regulate the speech of “individuals and institutions that happen to contract with (or receive grants from) the federal government.
In addition, Judge Abelson noted, the provisions likely violate the due process clause of the Fifth Amendment because they are so vague that they do not sufficiently explain what is and is not prohibited.
Specifically, the preliminary injunction blocked three provisions of the EOs: (1) a provision that required federal agencies to terminate “equity-related grants or contracts,” (2) a provision that required federal contractors and subcontractors to certify for purposes of False Claims Act (FCA) liability that they do not operate unlawful DEI programs, and (3) a provision directing the attorney general to enforce civil rights laws against DEI programs in the private sector.
The National Association of Diversity Officers in Higher Education, the American Association of University Professors, Restaurant Opportunities Centers United, and the Mayor and City Council of Baltimore—filed the lawsuit on February 3, 2025, challenging EO 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” issued on January 20, 2025, President Trump’s first day in office, and EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued on January 21, 2025.
Since that lawsuit was filed, at least three more federal court challenges have been filed targeting the EOs and President Trump’s January 20, 2025, EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which outlined the federal government’s new policy to only “recognize two sexes, male and female.” The suits raise similar constitutional claims, contending that the EOs are vague, violate free speech and due process, exceed the executive branch’s authority, and usurp legislative functions.
Next Steps
Judge Abelson’s denial of the Trump administration’s stay motion keeps in place the preliminary injunction blocking parts of the EO 14151 and EO 14173, meaning that entities affected by the orders will continue to have a reprieve, at least in the short term. However, the Trump administration is appealing the preliminary injunction decision, and the case and other challenges to the EOs are likely to be decided in the federal courts of appeal, and, potentially, by the Supreme Court of the United States.
Iowa Governor Signs Law Making State the First to Remove Gender Identity Protections From Civil Rights Code
On February 28, 2025, Iowa Governor Kim Reynolds signed legislation making the state the first to remove antidiscrimination protections for gender identity from its civil rights code.
Quick Hits
Iowa Governor Reynolds signed a bill into law that removes “gender identity” as a protected class under the state’s civil rights code.
The law further defines gender as binary, requires birth certificates to indicate sex, and restricts teaching about “gender theory” from kindergarten through sixth grade.
The enactment further amends the law to specifically state that “separate accommodations are not inherently unequal.”
Senate File (SF) 418, which takes effect on July 1, 2025, removes “gender identity” as a protected class in the Iowa Civil Rights Act, which prohibits discrimination in employment, wages, public accommodations, housing, education, and credit practices. The new law makes it more difficult for transgender individuals to bring claims alleging discrimination or harassment in state court. Furthermore, the amended law states that “separate accommodations are not inherently unequal.”
The governor’s signature came one day after state lawmakers approved the legislation on February 27, 2025. The legislation was fast-tracked through the state legislature, passing both the Iowa House and Senate in less than a week after it was introduced on February 24, 2025.
“It is common sense to acknowledge the obvious biological differences between men and women. In fact, it is necessary to secure genuine equal protection for women and girls,” Governor Reynolds said in a statement.
In recent years, Iowa has enacted laws that prevent doctors from administering gender-affirming care to individuals under the age of eighteen, ban transgender students from using school bathrooms that do not correspond with their sex at birth, and prohibit transgender students from participating in girls’ high school sports and women’s college athletics.
SF 418 makes several other key changes to Iowa state law regarding sex and gender, rejecting the idea of gender identity as separate from biological sex. Specifically, the law defines “sex” in statutes as “the state of being either male or female as observed or clinically verified at birth” and defines “female” and “male” based on reproductive systems that produce ova and sperm, respectively. The law further asserts that the term “gender” should be considered synonymous with sex and not “gender identity, experienced gender, gender expression, or gender role.”
The law also requires birth certificates to include a designation of the sex of the person, and it removes a provision allowing for a new birth certificate to be established based on a notarized affidavit by a licensed physician stating that the person’s sex designation has changed due to surgery or other treatment.
Additionally, the bill impacts school curricula, prohibiting schools from providing any program, curriculum, test, survey, questionnaire, promotion, or instruction related to “gender theory” or sexual orientation to students in kindergarten through sixth grade.
Next Steps
Iowa is now the first state to remove protections for gender identity from its civil rights code. The Iowa law comes amid a new push at the federal level since President Trump took office to define “sex” as binary and immutable, including with EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.”
The administration has further sought to limit the Supreme Court of the United States’ holding in Bostock v. Clayton County, Georgia, in which the Court held that the firing of an employee because of the employee’s sexual orientation or gender identity constituted unlawful sex discrimination under Title VII of the Civil Rights Act of 1964.
Amid the changes in federal guidance and state law, employers should remember that Bostock remains good law and states, “The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” (Emphasis added.)
What Is an Executive Order and How Do they Work?
What Is an Executive Order and How Do they Work? During his first two weeks in office, President Donald Trump signed nearly 40 executive orders, covering a wide range of policy areas from immigration to public education. Many of these orders were immediately challenged in court, raising concerns about their constitutionality and impact. But how […]
OFCCP Reportedly to Reduce Staff by 90% and Continue Veterans and Individuals with Disabilities Enforcement Efforts
According to Washington Post and Bloomberg press reports, on February 25, 2025, OFCCP Acting Director Michael Schloss submitted a memorandum to Acting Secretary of Labor, Vincent Micone, outlining OFCCP’s plan to significantly reduce its workforce and focus the agency’s efforts on enforcing contractor compliance with veterans and individuals with disabilities obligations in the wake of President Trump’s revocation of Executive Order 11246.
The memorandum has not been made public, but according to the reports, it includes the following points:
As part of the reduction, OFCCP will close 51 of its 55 offices, and reduce its staff from 279 employees to a “limited field presence” of 50 employees, who will conduct compliance reviews.
As restructured, OFCCP will “focus its mission” on enforcing protections under the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”) and Section 503 of the Rehabilitation Act.
The OFCCP division responsible for conducting statistical analyses would be eliminated as those “skillsets are no longer needed” for OFCCP’s future VEVRAA and Section 503 compliance efforts.
A five-person policy division will review and suggest changes to OFCCP’s regulations “designed to reflect the removal of EO 11246” and the agency’s focus on VEVRAA and Section 503.
42 OFCCP employees have already chosen to participate in the federal government’s resignation program, and OFCCP will need additional funding for separation incentives and other severance pay in order to conduct the additional planned personnel cuts.
Iowa Becomes First to Remove Gender Identity Protections
Iowa Becomes First to Remove Gender Identity Protections. Iowa Removes Gender Identity Protections in Landmark Vote In a historic and controversial decision, Iowa lawmakers on Thursday became the first in the U.S. to approve a bill removing gender identity protections from the state’s civil rights code. The legislation has sparked massive protests, with critics arguing […]
Supreme Court Expresses Skepticism Over Higher Burden in Majority Discrimination Cases
The Supreme Court of the United States recently heard oral arguments in a case to determine whether employees who are part of a majority group must meet a higher standard to prove discrimination.
Quick Hits
The Supreme Court heard oral arguments in a discrimination case brought by a straight woman alleging sexual orientation discrimination.
The oral arguments occurred shortly after President Donald Trump issued several executive orders to stop “illegal” workplace diversity, equity, and inclusion (DEI) programs and reshape how federal policy defines sex discrimination and gender.
The court is likely to decide this case before its term ends in late June 2025.
On February 26, 2025, the Supreme Court of the United States heard oral arguments in a lawsuit claiming a state agency in Ohio discriminated against a straight employee because she is straight.
The Supreme Court is expected to decide whether an employee who is part of a majority group must also meet the “background circumstances” rule in proving discrimination. The background circumstances rule is a heightened evidentiary standard applied in some circuit courts of appeal and stands in contrast to claims brought by employees who are part of minority groups, who are able to rely on evidence surrounding their own employment circumstances to prove discrimination. Four circuits have adopted the background circumstances rule. Two other circuits have rejected the background circumstances rule. Five other circuits do not apply the background circumstances rule, treating discrimination claims from majority group plaintiffs like claims from minority group plaintiffs. The Supreme Court is expected to resolve the circuit split.
Background on Case
A heterosexual woman served as the Ohio Department of Youth Services’ administrator of the federal Prison Rape Elimination Act (PREA). She applied and interviewed to be the department’s bureau chief of quality. The department terminated her employment as PREA administrator and offered her another job that amounted to a demotion with less pay, which she took. The department later hired a gay man to serve as PREA administrator and a gay woman to be bureau chief of quality. The heterosexual woman filed a discrimination lawsuit, alleging discrimination in violation of Title VII of the Civil Rights Act of 1964.
The district court granted summary judgment to the Ohio Department of Youth Services, finding the plaintiff failed to present evidence demonstrating discrimination in the department’s hiring practices or policies. The employee appealed, and on December 4, 2023, the U.S. Court of Appeals for the Sixth Circuit found she did not produce sufficient evidence to prove discrimination against a majority group. The appellate court noted her performance evaluation shortly before the demotion was “lukewarm” and sometimes “critical.” Thus, the agency could have demoted her based on lackluster performance, rather than discrimination.
Oral Arguments
Xiao Wang, the attorney for the plaintiff, said the background circumstances rule is inconsistent with Title VII. “It’s a difficult and more demanding burden on majority-group plaintiffs,” he said.
Ashley Robertson, an attorney representing the U.S. Department of Justice, supported overturning the Sixth Circuit’s ruling. “That heightened standard [in the background circumstances rule] risks screening out cases with merit,” she said. “Even if an employer generally treats a group well, if a plaintiff has evidence that the employer discriminated against her, she should be able to proceed.” A court “should not, based on its own independent sense of which group experiences more discrimination or not, draw its own conclusions absent evidence,” Robertson argued.
T. Elliot Gaiser, an attorney representing the Ohio Department of Youth Services, said the plaintiff didn’t meet the requirements to make a prima facie case and “could not establish that anybody was motivated by sexual orientation or even knew her sexual orientation … Every circuit has said that, if the employer isn’t even aware of the protected trait, it’s not possible to infer that they were motivated by that protected trait.”
Justice Elena Kagan pushed back on this argument, however, stating that the justices were determining whether a majority group plaintiff has an extra burden that a minority group plaintiff does not, as opposed to other elements of discrimination claims.
During oral arguments, most of the justices appeared to agree that federal law does not require plaintiffs to meet a higher bar just because they are members of a majority group. “We’re in radical agreement today on that, it seems to me,” Justice Neil Gorsuch said. Justice Amy Coney Barrett said the plaintiff “would have the exact same burden and be treated the exact same way under Title VII” if she was gay or straight. The oral arguments did not mention the new Trump administration or the recent executive orders.
Next Steps
If the court rules in favor of the plaintiff, as signaled by the oral argument, it may become easier for employees in majority groups to bring discrimination claims.
In anticipation of a ruling, employers may wish to review their policies and employee training to ensure they reflect that the law protects all employees against discrimination based on sex, race, color, national origin, and religion, regardless of whether the employee falls within the majority or minority group.
In addition, the Trump administration has targeted programs that promote diversity, equity, and inclusion (DEI), as the Trump administration considers many of these programs to be discriminatory toward employees in majority groups. Therefore, employers also may wish to conduct an attorney-client privileged assessment of all DEI initiatives.
E.M.D. Sales: A Reminder That California Stands Out from the Crowd
While welcome news to most employers, those in California are unlikely to be impacted by the U.S. Supreme Court’s recent ruling in E.M.D. Sales, Inc. v. Carrera, 220 L. Ed. 2d 309 (2025). In E.M.D. Sales, the Court rejected the argument that employers must prove an overtime exemption under the Fair Labor Standards Act (FLSA) by clear and convincing evidence. The standard, the Court said, should be no greater than by a preponderance of the evidence. But this ruling does not change the burden for California employers under state law.
E.M.D. Sales
The plaintiffs in E.M.D. Sales claimed they were improperly classified under the FLSA asoutside salespersons exempt from overtime. Exemptions are considered a defense to overtime claims, and the burden to prove the defense is on an employer. The District Court sided with the plaintiffs, holding that the employer had not proved by “clear and convincing” evidence[1] that they were properly classified. This aligned with precedent in the Fourth Circuit, which affirmed the lower court’s ruling. When the case made its way to the U.S. Supreme Court, however, the Court instead sided with precedent from the Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuits, holding an employer must only satisfy the lower (and easier to meet) “preponderance of the evidence” burden of proof.
The plaintiffs argued that the higher, “clear and convincing” standard was appropriate because the FLSA focuses on the public’s interest in a well-functioning economy, the FLSA rights at issue were not waivable, and the employer generally has control over the evidence while impacted employees may have fewer resources. The Court was unpersuaded. In its 9-0 decision, the Court explained that, as can be evidenced by Title VII cases, a law’s focus on important public interests, the fact that the employer controls much of the evidence, and the non-waivability of rights do not require a heightened standard of proof.
Takeaways for California Employers
The E.M.D Sales holding, coupled with the Court’s ruling in Encino Motorcars, LLC v. Navarro, 579 U.S. 211, 230 (2016), which rejected the notion that FLSA overtime exemptions should be narrowly construed, may provide good news for employers who face claims they misclassified workers under the FLSA. Unfortunately for California employers however, most misclassification claims are brought under California state law and not the FLSA such that these decisions are likely to have little practical application.
The California Supreme Court has maintained that state law overtime exemptions should be “narrowly construed” and applied only to employees who “‘plainly and unmistakably’” fall within the exemption’s language.[2] This, together with the quantitative prong of California’s duties test, which requires employers to prove that their exempt employees are actually engaged in exempt duties more than 50% of their working time, effectively means that the burden of proof for employers under California law is greater than it would be if the case were filed under the FLSA. Stated differently, while the E.M.D Sales decision should be good news to most employers outside of California, it has little to no practical application to California employers.
The E.M.D Sales decision is another reminder that California stands out from the crowd—and often to the employers’ detriment. California employers are advised to have competent California legal counsel at the ready to help guide them through the prickly and unique brambles of California employment law.
[1] The “clear and convincing” standard means that the evidence is highly and substantially more likely to be true than untrue. By contrast, the “preponderance of the evidence” standard means more than 50%, or enough evidence to tip a scale slightly for a fact to be more probable.
[2] See, e.g., Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 794 (1999); Peabody v. Time Warner Cable, Inc., 59 Cal. 4th 662, 667 (2014).
U.S. Supreme Court Hears Oral Argument in Reverse Sex Discrimination Case
On February 26, 2025, the United States Supreme Court entertained oral argument in Ames v. Ohio Department of Youth Services, a case that centered on whether a plaintiff who is a member of a majority group must meet a higher burden—namely, showing supporting “background circumstances”—in establishing a prima facie case of discrimination under Title VII.
Background
Plaintiff Ames, a heterosexual woman, began working at the Ohio Department of Youth Services (the “Department”) in 2004. In 2014, she was promoted to Administrator of the Prison Rape Elimination Act. In April 2019, Plaintiff applied for another promotion, but was not selected. Shortly thereafter, Plaintiff alleges that her supervisor suggested that Plaintiff retire. In May 2019, Plaintiff was demoted, which resulted in a significant pay cut, and the Department hired a 25-year-old gay man for the position. Later that year, a gay woman received the promotion Plaintiff had applied for. Plaintiff sued the Department alleging discrimination based on sexual orientation and sex under Title VII.
The U.S. District Court for the Southern District of Ohio granted summary judgment in favor of the Department, concluding Plaintiff failed to establish a prima facie case. The court invoked the “background circumstances” doctrine, which provides that members of a majority group must show “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority” to establish a prima facie case. The court also ruled that Plaintiff lacked evidence of pretext for her sex discrimination claim.
The Sixth Circuit affirmed. In his concurrence, Judge Kethledge criticized the background circumstances test, noting a circuit split that should be resolved by the Supreme Court. In addition to the Sixth Circuit, several circuits, including the Seventh, Eighth, and Tenth Circuits, follow the background circumstances test. The Supreme Court agreed to hear the case.
Oral Argument
Unexpectedly, on February 26, 2025, at oral argument, Justice Gorsuch observed that all advocates seemed to be “in radical agreement” with regard to the question presented: that as applied by the Sixth Circuit, the background circumstances doctrine is an improper bar to plaintiffs establishing a prima facie case. However, the advocates disagreed as to whether the Court should give guidance as to what is necessary to establish a prima facie case.
Justice Barrett asked whether abandoning the background circumstances requirement would “throw open” the door to Title VII cases. Petitioner’s counsel responded that the floodgates would not be flung wide open, as that doctrine applies at the summary judgment stage, and plaintiffs will have already needed to have surmounted several barriers, including filing a case with the EEOC and meeting the plausibility standard at the pleading stage.
It is also noteworthy that the Assistant to the EEOC Solicitor General, arguing as amicus curiae in support of reversal, added that the EEOC had already rejected the background circumstances rule, and applies the same evidentiary standard to all plaintiffs in discrimination cases under Title VII. Urging the Court to overturn the background circumstances rule, she argued that “any plaintiff that can produce evidence from which a jury could infer discrimination should go to trial.”
Last, after conceding that he was not arguing in support of using the background circumstances doctrine, Respondent’s counsel argued that the Court should still affirm the Sixth Circuit’s ruling because Petitioner had failed to establish that any adverse action against Ames was motivated by her sexual orientation.
Notably, in questioning the Assistant to the EEOC Solicitor General, Justice Alito suggested that the background circumstances test may have been “based on an intuition about the way in which most employers behave.” Justice Alito intimated that, while possibly “sound” in 1973, the year that McDonnell Douglas was decided, this intuition, presumably that members of a majority group are unlikely to be discriminated against by their employers, may “no longer [be] sound today.”
Implications
Justice Gorsuch’s statement that the advocates were in “radical agreement” that a heightened burden should not be applied to majority group plaintiffs is telling indeed. If this heightened burden is abandoned, there is meaningful potential for an increase in the filing of Title VII “reverse discrimination” cases. Notably, a number of reverse discrimination cases are already pending.
DEI in the Spotlight: Wage and Hour Implications
With the nation’s heightened focus on DEI programs and policies, U.S. employers should carefully evaluate the legal risks associated with their DEI-related wage and hour practices.
Many employers across a broad range of industries—including financial services, technology, media, healthcare, retail, and professional services—utilize compensation-related incentives to support their DEI efforts. Practices that are likely to be scrutinized by those targeting an employer’s DEI initiatives include:
Diversity referral bonuses. Over the last decade, a number of leading employers have included as a component of their overall DEI efforts a program providing special bonuses to employees who successfully refer diverse candidates. To the extent such bonuses exceed those paid to employees for referring non-diverse candidates, they will likely be among the “low hanging fruit” for challenges.
Compensation tied to achievement of DEI-related goals. By the early 2020s, a number of companies had conditioned significant portions of their executive and management bonuses to achievement of individual and collective DEI-related goals and/or metrics. The risks inherent in these programs depends in large measure on the nature of the underlying benchmarks.
Paying for time spent in employee resource groups. Many employers have recognized and sponsored employee resource groups (sometimes called ERGs or affinity groups), where employees with shared characteristics, interests, or identities meet to foster a sense of community and support, often focusing on DEI initiatives. Federal and state law may, depending on the circumstances, require employers to count time spent by nonexempt (i.e., overtime-eligible) employees in ERG meetings, events, and other activities as “hours worked” and to pay them for that time—potentially at an overtime rate. If an employer is not required to pay nonexempt employees for the time spent in such activities, but does so anyway, it may invite legal challenges if it does not pay for time spent by such employees in other activities that are not required to be paid (e.g., voluntary after-hours gatherings unrelated to the employees’ job responsibilities).
Paid diversity internships and fellowships. Structured diversity-focused internship and fellowship programs—typically designed to provide students or recent graduates from underrepresented groups with career, mentorship, and professional development opportunities, as well as exposure to the day-to-day operations of the workplace— became more widespread in the last 20 years. In addition to the risk of discrimination claims tied to programs that limit eligibility based on race or other protected categories, companies and organizations that compensate participants in these programs but that do not similarly compensate other types of interns or fellows may be exposed to disparate treatment or disparate impact claims.
As with all policies and programs related to DEI, it’s the right time for employers in every industry to pressure-test their wage and hour practices to evaluate possible risk and to consult with counsel to mitigate those risks as the legal and regulatory landscape continues to evolve under the new Administration.
Florida Court Rules That the Florida Constitution Requires Employers to Accommodate Off-Duty Medical Marijuana Use
A Florida state court recently held that an employer violated the Florida Civil Rights Act by failing to accommodate an employee’s off-duty, off-site medical marijuana use to treat his disabilities.
The court granted summary judgment in favor of the former employee, whom the employer had placed on unpaid administrative leave after he tested positive for marijuana during a random drug screening.
Quick Hits
A Florida state court ruled that employers must accommodate off-site medical marijuana use, granting summary judgment in favor of a former employee who had been placed on unpaid administrative leave after testing positive for marijuana.
Although the use of marijuana is still prohibited under federal law, the employee, an emergency medical technician, was licensed by the state of Florida, and his CBA allowed employees to report the use of prescription medications authorized under both federal or state law upon testing positive on a drug test.
Florida employers may want to review their drug-free workplace policies for language regarding marijuana usage and consider removing policy language indicating that they will not accommodate the off-duty use of medical marijuana.
Background
Angelo Giambrone was employed by Hillsborough County, Florida, as an emergency medical technician (EMT) for the county’s fire department. During a random drug screening, Giambrone tested positive for marijuana. Following the positive test, Giambrone presented his employer with a valid medical marijuana card. According to the lawsuit, Giambrone takes medical marijuana for anxiety, PTSD, and insomnia.
According to the lawsuit, Giambrone v. Hillsborough County, the county placed Giambrone on unpaid administrative leave because it refused to accommodate Giambrone’s use of medical marijuana. The sole reason for Giambrone’s suspension was the positive random drug test. There was no evidence that Giambrone used marijuana at work, possessed marijuana on work premises or during work hours, showed up to work impaired, or had any complaints or suspicion of impairment while on the job. The county also reported him to the EMT licensing board, which eventually dropped its investigation into Giambrone based on his status as a medical marijuana cardholder.
Giambrone filed a lawsuit in Florida state court, alleging disability discrimination for failing to accommodate his use of medical marijuana under the Florida Civil Rights Act. He alleged wrongful termination and breach of contract for failure to accept his state-issued medical marijuana card as a justification for a positive drug test. In opposition, the county argued that a medical marijuana card does not exempt Giambrone from complying with federal law and the county’s drug-free workplace policy.
In granting Giambrone’s motion for summary judgment, Circuit Court Judge Melissa M. Polo concluded that the Florida State Constitution requires employers to accommodate the off-site use of medical marijuana. However, Judge Polo reminded employers in her opinion that the Florida Constitution does not have a duty to accommodate on-site use of medical marijuana.
Judge Polo was not persuaded by the county’s argument that it did not have a duty to accommodate medical marijuana because marijuana is still illegal under federal law. This was in part because Giambrone’s EMT license was controlled by the state of Florida. Judge Polo further distinguished a case cited by the county, Ortiz v. Department of Corrections, where the Florida State Department of Corrections was not required to accommodate a correctional officer’s medical marijuana use because it directly conflicted with a federal firearm possession law, a condition not at play in Giambrone’s case. Furthermore, the opinion noted that language in Giambrone’s collective bargaining agreement allowed employees to report the use of prescription medications authorized under both federal or state law upon testing positive on a drug test. The county has appealed the decision.
Key Takeaways
In light of this decision, Florida employers may want to consider entering into an interactive disability accommodation process with job applicants or employees who are medical marijuana cardholders. However, Florida employers can rest easy knowing they still do not need to allow their employees to show up to work under the influence of medical marijuana, or possess marijuana on company property. The opinion serves as a good reminder to Florida employers to handle medical marijuana issues carefully and to consider focusing on reasonable suspicion testing and training.
How Honest is Honest Enough in Your Job Application? (UK)
In 2019 a Mr Easton applied for a role with the Home Office to work in the Border Force. As part of that process he was required to fill in (without guidance) a blank box headed “Employment History” which he completed with details of prior roles held and the years in which each had begun and ended. While that information was true as far as it went, Easton’s taking that approach had the side-effect of obscuring that in 2016 he had been dismissed for gross misconduct and then been unemployed for three months, both matters which he accepted in cross examination in the Tribunal that the Home Office could well regard as relevant.
As indeed it did, for on its subsequent discovery of Easton’s 2016 dismissal, the Home Office sacked him in 2020 for his alleged lack of honesty in omitting from the application form the details necessary for it to identify any gaps in his employment.
Easton brought a welter of claims against the Home Office including unfair dismissal, victimisation, retaliation for whistle-blowing, and discrimination on grounds of both age and disability. By the time he reached the Employment Appeal Tribunal earlier this month, all his other claims had been abandoned or rejected and the question under appeal had been whittled down to a single issue, though phrased in a number of different ways – (i) did the Home Office have reasonable grounds to believe that his presentation of his employment history had been a deliberate and dishonest attempt to obscure the fact and nature of his 2016 dismissal and the jobless three months? Or, put differently, (ii) had the Home Office adequately considered the possibility that Easton had completed the application form in what he genuinely believed to be an appropriate manner, bearing in mind the absence of instructions on the form as to the detail required? And overall (iii) how could the Home Office reasonably believe him to have answered the question dishonestly simply by virtue of his not providing information it had not asked for?
No-one here suggested that CVs and job application forms attract the same “utmost good faith” obligations as some insurance forms, i.e. any duty to disclose potentially relevant circumstances even if not specifically requested. So from there, the EAT moved to the question of what the form did actually ask for, or rather, what Easton should have realised it was asking for.
Despite getting rave reviews from the EAT for his advocacy skills, Easton fared less well in terms of his actual evidence, parts of which were found to have been eloquently argued but basically untrue. In particular, he advanced simultaneously a number of different and fundamentally incompatible rationales for not adding the give-away details on the form. These included IT failure, the question not being asked, his belief that the Home Office already knew about the dismissal, its being irrelevant to the recruitment anyway, and his having mentioned it at interview, which the Employment Tribunal had found that he didn’t. In the end, once Easton admitted that he had been told by the Home Office pre-application that neither the 2016 dismissal nor the subsequent period of unemployment would necessarily be fatal to his appointment but would be considered case-by-case, he was effectively doomed. He had to have understood from that point that the Home Office would want to know about such incidents, and that that was the purpose of the “Job History” box. His then completing the application form in such a way as to conceal them was enough to allow the Home Office a reasonable basis on which to conclude on a balance of probabilities that that omission was deliberate. As a result, the ET’s original decision that he had been fairly dismissed was upheld.
This case turns on its own facts to some extent, but we can still take some useful pointers from it:
Job candidates are under no general obligation to volunteer information which is not requested.
So if as employer you are looking for details relevant to your assessment of that individual’s suitability for your role, be specific. The EAT said that “the suggestion that it needs to be spelled out to applicants that they should provide sufficiently precise dates to permit the vacancy-holder to understand any gaps has a slight air of unreality about it”, but ignore that – if you want the date of a job change, not just the year, then say so. If you want to know about gaps in employment records, or why your candidate left his last job, or whether he has any unspent convictions, say so.
If the application form comes back without the specific information requested, revert to the candidate and request it again. That kills off the otherwise inevitable argument that if as employer you so badly needed some information that you later sack the employee for not providing it, you shouldn’t have let them start in the first place.
Similarly, if the candidate does provide the requested information and that generates important further questions, ask them before they arrive (particularly in regulated sectors). If the job history reveals a three month gap, for example, was that spent looking for a job, on a pilgrimage, in Broadmoor?
To expand on that, the Home Office’s application form required Easton to tick a box to acknowledge that his application might be rejected or that he could be disciplined if he withheld “relevant details”. That tick was found relevant but not conclusive, since it left the question of what is a “relevant detail” to the job applicant. Here Easton was found to have known that earlier dismissals and periods out of work were seen as relevant, but that would not be the case every time.
But please do keep an eye on the information you seek, since pressing a candidate for details of relevant medical conditions or disabilities can get you into significant trouble if you ask too early, and the application is then refused. In addition, ETs will be very wary about dismissals for purported dishonesty in not disclosing mental health conditions on joining and then having the cheek to seek adjustments later – they may well be sympathetic to a claimant who argues that their condition was under control at the time of the appointment and so did not justify any mention, and/or that they feared not even getting a chance to prove themselves in the job if they told the truth. It may arguably be a form of dishonesty not to disclose such a condition, but there are few good arguments open to the employer for not recruiting them as a result. It might have been entirely legitimate for the Home Office not to have appointed Easton if there had been something in his earlier dismissal or time out of work which particularly bothered it, but it will be a brave employer indeed which argues that had it known of a candidate’s health condition, and despite their passing all the other entry conditions, it would not have hired them. You wince even just thinking about the reception that would get in Tribunal.