Third Circuit: Clarification on Anti-Retaliation Protections for Whistleblowers
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AUG 4, 2026 |
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- In Lisenby v. Olympus Corp. of the Americas, the Third Circuit Court of Appeals ruled that the 2009-2010 amendments to the False Claims Act (FCA) anti-retaliation provision protect employees from retaliation for efforts to stop fraud against the government when related to an FCA violation.
- As a matter of precedent, the court found that in order to state a retaliation claim under the “other efforts” prong, a plaintiff’s actions must be connected to the submission of a false or fraudulent claim to the federal government for payment or approval.
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Discussion
In Lisenby v. Olympus Corp. of the Americas, the Third Circuit Court of Appeals ruled that the 2009-2010 amendments to the False Claims Act (FCA) anti-retaliation provision protect employees from retaliation for efforts to stop fraud against the government when related to an FCA violation. Here, the plaintiff worked as the Global Head of Product Development for the defendant which sold medical devices to the federal government, including to the Department of Veteran Affairs (VA). During a two-week period, the plaintiff complained that the defendant was violating FDA regulations for a lack of quality management controls and testing to use products that were safe for clinical use in patients. The complaints were made outside of the plaintiff’s chain of command but to other senior executives, even scheduling meetings with proposed solutions. After one such meeting with the Senior Vice President of Regulatory Affairs, the plaintiff was told his position was being eliminated – even though no other positions were eliminated during this time. The plaintiff then filed claims under the FCA and under Pennsylvania and Florida state whistleblowing laws.
In reaching its ruling, the court found that the FCA contains an anti-retaliation provision that protects employee whistleblowers from retaliation “because of” conduct protected by the Act. For a retaliation claim under the FCA, a plaintiff must allege that he (1) engaged in protected conduct, and (2) was discriminated against because of his protected conduct. There are two categories of protected conduct under the FCA: (1) “lawful acts done…in furtherance of” either “an action [under the FCA]”; or (2) “other efforts to stop 1 or more violations of” the FCA. As a matter of precedent, the court found that in order to state a retaliation claim under the “other efforts” prong, a plaintiff’s actions must be connected to the submission of a false or fraudulent claim to the federal government for payment or approval. The plaintiff must also have held an objectively reasonable belief that his employer was violating, or would violate, the FCA. Protected conduct under the “other efforts” prong requires a plaintiff to hold, in good faith, an objectively reasonable belief that his or her employer is violating, or will violate, the FCA.
In applying its rationale to the plaintiff, the court did not find that the plaintiff believed that Olympus was violating, or would soon violate, the FCA. While the concerns raised to Olympus were about design quality and non-compliant product testing issues, these were not connected to a belief that Olympus was submitting false claims for payment to the federal government. A belief of regulatory violations was not the same as alleged fraud on the government. While the court did not find that this particular plaintiff met the standard for protections under the “other efforts” prong, employers should note that the standard is an objectively reasonable belief that the employer submitted, or would submit, false or fraudulent claims for payment to the federal government.
Action Items
- Review internal complaint and reporting policies and procedures.
- Consult with legal counsel regarding whistleblower complaints.
Third Circuit: Guidance on Telework as a Reasonable Accommodation
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AUG 18, 2026 |
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- In Gardner v. Kutztown University, et al., the Third Circuit Court of Appeals provided additional guidance to employers on evaluating telework as a reasonable accommodation while reaffirming that employers have the right to choose among reasonable accommodations and do not need to grant the employee their preferred accommodation.
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Discussion
In Gardner v. Kutztown University, et al., the Third Circuit Court of Appeals provided additional guidance to employers on evaluating telework as a reasonable accommodation while reaffirming that employers have the right to choose among reasonable accommodations and do not need to grant the employee their preferred accommodation. Here, the plaintiff was an associate professor with an autoimmune disorder who requested an accommodation of teaching remotely during the COVID-19 pandemic. The defendant university had reopened its campus and instituted a policy for in-person teaching. The plaintiff’s request was denied with the university citing a “fundamental alteration” of the academic program if remote teaching was allowed. Accommodations that the university proposed included teaching behind a plexiglass podium, wearing a plexiglass face shield, a separate classroom entrance, limited student capacity, and enhanced air filtering. The plaintiff rejected all accommodations and insisted on remote teaching. The plaintiff then filed claims for violation of her rights under Section 504 of the Rehabilitation Act.
In reaching its ruling, the court found that the plaintiff must show the following under the Rehabilitation Act: (1) she is disabled; (2) she is “qualified” to perform the “essential functions” of her job with or without reasonable accommodations; and (3) she was “nonetheless . . . otherwise prevented from performing [her] job.” The question of whether teaching students and holding office hours in-person are “essential functions” was a question of fact which should be determined by a jury. The court did find, however, that the university’s offer to provide a classroom with limited student capacity, a separate entrance, specialized air filters, and a plexiglass podium was a reasonable means to accommodate the plaintiff’s risk of illness exposure. An employer is required to provide a reasonable accommodation and not one that “is the most reasonable or the employee’s prefer[ence].”
In understanding this ruling, employers in the Third Circuit should note that similar claims will require a fact-specific determination of the essential functions of the job. Evidence beyond a job description may be required. However, employers should also be encouraged that the interactive process should produce an effective reasonable accommodation and not just one that is preferred by the employee. The employer still retains the ability to choose which one to implement. Employers should clearly document the interactive process to support their compliance with the requirement to provide a reasonable accommodation in the event of a claim and to provide fact-specific evidence.
Action Items
- Review and revise policies and procedures regarding reasonable accommodations.
- Review and revise job descriptions and other documentation to define the essential functions of the job.
- Consult with legal counsel when denying a reasonable accommodation or for claims of undue hardship.
- Have appropriate personnel trained on the requirements.
Third Circuit: Legitimate Performance Concerns and Organizational Changes Do Not Demonstrate Discrimination
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JUL 6, 2026 |
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- In Lynn v. The Bank of New York Mellon, the Third Circuit Court of Appeals ruled the plaintiff was unable to prove a case of race discrimination, retaliation, and hostile work environment where the employer had legitimate reasons for termination based on performance and organizational restructuring.
- This ruling highlights the importance of detailed documentation of performance issues and business decisions that result in position eliminations.
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Discussion
In Lynn v. The Bank of New York Mellon, the Third Circuit Court of Appeals ruled the plaintiff was unable to prove a case of race discrimination, retaliation, and hostile work environment where the employer had legitimate reasons for termination based on performance and organizational restructuring. Here, the plaintiff was a black man employed by the defendant as a portfolio manager reporting to a manager in London. The plaintiff received positive performance reviews and stated that he initially enjoyed working with his manager, a white male. In the wake of the Black Lives Matter (BLM) protests, the manager was responsible for arranging conversations within his division to support diversity. Prior to these conversations, the manager told the plaintiff he did not believe in BLM or the concept of white privilege. However, he encouraged the plaintiff to speak freely about his own views and personal experiences. The manager also encouraged the plaintiff to apply to a different director-level role which he then was offered and accepted. His then-current role was eliminated, although he was told he could come back to his former team.
After this move, the plaintiff’s relationship with the defendant deteriorated. He unilaterally inserted a footnote in a slide deck to a presentation accusing his former manager’s division of being “an unsafe environment for black employees to advance and to expand their managerial skills.” His claim was investigated and found to be unsubstantiated. His new team also reported that he demonstrated performance issues, lack of technical skill, aggressive behavior, and an unwillingness to learn. The plaintiff tried to move to another role and failed. He then filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). His poor performance continued and he was placed on a performance improvement plan (PIP). His position was ultimately eliminated as a result of a merger between two teams. The plaintiff then filed claims alleging race discrimination, retaliation, and hostile work environment.
In reaching its ruling, the court found the plaintiff must show the following for a case of race discrimination: (1) “that he is a member of a protected class”; (2) “that he is qualified for the position”; (3) that he suffered an adverse employment action; and it was (4) “under circumstances that give rise to an inference of unlawful discrimination such as might occur when the position is filled by a person not of the protected class.” While he could show that the termination was racially discriminatory, the plaintiff failed to show that the proposed non-discriminatory reasons for the termination were pretextual. He was not replaced after the position was eliminated – his responsibilities were spread to existing employees. In addition, he could not show that his new manager showed racial animus in terminating him when she hired him over a white woman. He also voluntarily left his prior position.
For the retaliation claims, a plaintiff must show that: “(1) [he] engaged in activity protected by Title VII; (2) the employer took an adverse employment action against [him]; and (3) there was a causal connection between [his] participation in the protected activity and the [retaliatory] adverse employment action.” Here, the defendant’s reorganization and the plaintiff’s unsatisfactory job performance were legitimate reasons for termination. The feedback on poor performance was a legitimate, non-discriminatory reason for termination.
As to the hostile work environment claim, the plaintiff must prove: “(1) [he] suffered intentional discrimination because of [his] protected activity; (2) the discrimination was severe or pervasive; (3) the discrimination detrimentally affected [him]; (4) it would have detrimentally affected a reasonable person in like circumstances; and (5) a basis for employer liability is present.” The plaintiff did not provide specific evidence to support this claim, so the court found in favor of the defendant.
This ruling highlights the importance of detailed documentation of performance issues and business decisions that result in position eliminations. While the plaintiff was able to meet some elements of a prima facie case for some claims, the employer’s detailed documentation was able to overcome claims that the termination was pretextual.
Action Items
- Maintain consistent, thorough documentation of performance.
- Document business reasons for reorganizations that result in position eliminations.
- Review adverse actions with legal counsel following a protected complaint.
Fourth Circuit: Unpaid Leave May Not Always Be Reasonable Under ADA
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All Employers with Employees in MD, NC, SC, VA, and WV |
EFFECTIVE
AUG 5, 2026 |
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- The Fourth Circuit held that an employer could not rely on unpaid leave as a reasonable accommodation where an employee with indefinite physical restrictions requested reassignment to potentially available, less physically demanding positions and the employer failed to meaningfully engage in the interactive process.
- Although leave may be a reasonable accommodation in some circumstances, it may not be effective where it does not enable an employee to return to work or perform job duties.
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Discussion
In Dieng v. Orkin, LLC, the Fourth Circuit Court of Appeals held that an employer could not rely on unpaid leave as a reasonable accommodation where an employee with indefinite physical restrictions requested reassignment to potentially available, less physically demanding positions and the employer failed to meaningfully engage in the interactive process.
Here, a pest control technician suffered a knee injury and could no longer perform the duties of his position. His physician later released him to return to work with indefinite physical restrictions, after which the employee requested reassignment to less physically demanding work, including available customer service and sales positions. Despite the employee’s requests, the employer continued the employee on unpaid leave and the employee sued for failure to accommodate under the ADA.
In reviewing the case, the court determined that the employer did not meaningfully engage in the interactive process because the employer did not discuss the employee’s limitations, the work he could perform, or whether light-duty or alternative positions were available.
The court emphasized that unpaid leave is not automatically a reasonable accommodation. While leave may be appropriate in some circumstances, it must be effective in allowing the employee to ultimately return to work or otherwise perform the essential functions of a position. In this case, the employee’s restrictions were indefinite, and continued unpaid leave may not have been an effective accommodation where reassignment to an available position may have been possible.
This case serves as a reminder for employers to participate in a collaborative dialogue during the interactive process to evaluate available accommodations. Employers may need to consider multiple accommodation options, including reassignment to a vacant position, and should gather sufficient information regarding the employee’s restrictions and ability to perform available work.
Action Items
- Engage in the interactive process for every accommodation request, including requests for reassignment.
- Maintain documentation throughout the interactive process.
- Consult with legal counsel on specific accommodation requests.
Fifth Circuit: Title VII Plaintiffs Have No Duty to Mitigate Emotional Distress Damages
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All Employers with Employees in LA, MS, and TX |
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JUL 9, 2026 |
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- The Fifth Circuit held that Title VII plaintiffs are not required to take steps to reduce, or mitigate, their damages for emotional distress, unlike the mitigation duty that applies to backpay.
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Discussion
In Equal Employment Opportunity Commission v. SkyWest Airlines, Inc., the Fifth Circuit Court of Appeals ruled that Title VII of the Civil Rights Act of 1964 does not require plaintiffs to mitigate their damages for emotional distress.
The case arose after a parts clerk at Dallas-Fort Worth International Airport alleged that coworkers, including a maintenance supervisor, subjected her to severe and repeated sexual harassment, including sexually explicit comments, jokes about rape, and pornographic images displayed at work. When she reported the harassment to her supervisor, he told her that taking action would “just put a larger target on her back.” She later reported the conduct to human resources, but the harassment allegedly continued after she returned from a medical leave taken for related health effects, including headaches, nightmares, and vomiting. She eventually accepted an early retirement offer. The EEOC sued on her behalf for sexual harassment and retaliation.
A jury found that the plaintiff was harassed based on her sex and that the airline failed to take prompt remedial action, awarding $2 million in punitive damages and $170,000 in emotional distress damages. The trial court later reduced the total award to the Title VII statutory cap of $300,000 but rejected the airline’s argument that it deserved a new trial. The airline had argued that the plaintiff should have been required to mitigate her emotional distress damages, for example by seeking therapy or medication, and that the court improperly admitted text messages the plaintiff sent to her husband describing the harassment as it occurred.
The Fifth Circuit rejected both arguments. On the mitigation issue, the court reasoned that because Title VII expressly requires mitigation for backpay but includes no similar requirement for compensatory damages, Congress did not intend to impose a general duty to mitigate compensatory damages, and no such duty exists for emotional distress in particular. This holding aligns the Fifth Circuit with the majority of federal courts that have addressed the issue. On the evidentiary issue, the court held that the plaintiff’s contemporaneous text messages were properly admitted because they reflected her mental and physical state at the time of the harassment, which was relevant to whether she subjectively perceived the conduct as abusive.
The Fifth Circuit also affirmed the punitive damages award. The court found that evidence the supervisor actively participated in the harassment, despite having received regular sexual harassment training, supported a jury finding that the airline acted with malice or reckless indifference. The court further found that deficiencies in the airline’s internal investigation, including interviewing only some of the relevant witnesses, failing to ask meaningful follow-up questions, and imposing little or no discipline on the supervisor, undermined the airline’s ability to establish a good-faith defense to punitive damages.
Although primarily concerned with damages awards, this case is a practical reminder that the thoroughness of an employer’s investigation may directly affect its ability to limit liability. Employers should take every complaint seriously and follow through with a comprehensive, well-documented investigation.
Action Items
- Investigate employee complaints promptly.
- Document each investigation, including findings and any corrective action taken.
- Review harassment policies and training programs for compliance.
Fifth Circuit: Probation as an Adverse Employment Action
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All Employers with Employees in LA, MS, and TX |
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JUL 14, 2026 |
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- Putting an employee on probation is an adverse employment action for purposes of a discrimination claim under Title VII where the action affects the terms and conditions of employment.
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Discussion
In Brenyah v. Columbia Hospital Corporation of Bay Area, the Fifth Circuit Court of Appeals said that putting an employee on probation qualified as an “adverse employment action” where an employee’s probationary status affected their job security and seniority. However, the discrimination claim ultimately did not meet summary judgment standards given that the employee failed to show the probationary action was a pretext for discrimination.
Here, a Black nurse born in Ghana, sued her former employer for race/national-origin discrimination under Title VII, among other claims. She alleged coworkers mocked her African accent and food, made disparaging comments about Black employees, and that supervisors mishandled her complaints and instead disciplined her, extended her probation, and eventually forced her resignation. A separate but related incident occurred when, while on medical leave from a car accident, she sought treatment at another hospital owned by her employer while it was on lockdown for Hurricane Harvey and had a tense encounter with security and police, as well as personnel with whom she worked at the other hospital. Following her initial treatment, she was on leave to recover from her injuries. She communicated with her employer about her return to work but ultimately didn’t hear back for eight days about the terms of her return, and she claimed a forced resignation as a result. The district court granted summary judgment to the employer, and the employee appealed.
The Fifth Circuit pointed out that extending the employee’s probation qualified as an “adverse employment action” because she provided evidence that an employee’s probationary status affected their job security and seniority at the employer. However, the employee failed to show this was a pretext for discrimination. The hospital had documented, legitimate performance concerns associated with her time-management and documentation issues. To establish pretext through disparate treatment, an employee must produce evidence of a comparator who was similarly situated to her and the employment actions must be taken “under nearly identical circumstances.” Here, the court said her comparator evidence didn’t show similarly situated treatment; the circumstances were too different to be compared or lacked similar treatment at all. Other employees who she claimed were not written up for extending their shifts had actually extended their shifts far less frequently than her. Moreover, the court said there was no evidence submitted that nurses outside of her protected groups were treated differently under nearly identical circumstances or that the employer intentionally gave her a heavier workload.
This ruling highlights the importance of documenting employee performance consistently. Employers are better positioned to defend themselves when they have documentation of legitimate business actions that are consistently applied across the workforce.
Action Items
- Review performance documentation processes for consistency.
- Have appropriate personnel trained on documenting performance and discipline.
Ninth Circuit: EFAA Opens the Door to Escape Arbitration
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All Employers with Employees in AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and the Northern Mariana Islands |
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AUG 19, 2026 |
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- If an employee learns of information in discovery that would allow them to make a claim under the EFAA, where they didn’t already know that a claim was available, the employee may withdraw from existing arbitration to pursue their rights in court under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA).
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Discussion
In Ding v. Structure Therapeutics, Inc., the Ninth Circuit Court of Appeals said that employees can assert their right to elect to pursue their rights in court under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) despite having initiated and participated in arbitration where they had not yet elected to exercise their EFAA right.
Here, an employee claimed she was hired to perform a CFO role, but the CEO immediately took away her core duties and dismissed her contributions. After she suffered facial injuries in a domestic violence incident, the CEO allegedly made insensitive remarks about her injuries and repeatedly questioned whether she should continue as CFO. Ten days after that incident, the CEO recommended her termination, citing her “domestic situation” and complaints from male Wall Street bankers that she was “too aggressive.” A man with a weaker résumé was hired to replace her.
The employee initially filed a demand for arbitration (as her employment contract required) alleging discrimination based on national origin and her status as a domestic violence victim. During arbitration discovery, however, she uncovered new evidence — including an email in which the CEO described his “ideal phenotype” for the CFO role using two men as examples, and evidence that the board wanted a woman CFO for optics with investors — that revealed the mistreatment was actually motivated by her sex. She withdrew from arbitration and filed a new lawsuit in court asserting sex discrimination and sexual harassment/hostile work environment claims under California’s Fair Employment and Housing Act (FEHA), invoking her right under the EFAA to avoid the arbitration clause for sexual harassment claims. The employer tried to force the case back into arbitration, arguing she had already made her “election” to arbitrate and had waived her EFAA rights.
The Ninth Circuit rejected the employer’s arguments and sided with the employee. The court held that the EFAA’s text does not categorically bar a plaintiff from later invoking her right to litigate in court just because she initially filed other, non-sexual-harassment claims in arbitration. Because the employee did not realize until discovery that the mistreatment was sex-based, she wasn’t “alleging conduct constituting a sexual harassment dispute” when she first went to arbitration, so she hadn’t yet made her one EFAA “election.” The court emphasized that Congress intended to give harassment victims a genuine choice between court and arbitration, and that reading the statute the employer’s way would strip that choice from people who don’t discover their sexual harassment claim until later. The court also found no waiver based on the finding that the employee didn’t know she had a viable sex-based claim when she initially pursued arbitration. The court was careful to clarify that its “conclusion does not mean that a plaintiff may start in arbitration, bring a sexual harassment claim at any time, under any circumstances, and then pursue her claims in court. A plaintiff may waive her EFAA rights under ordinary waiver principles.”
Finally, the court held that the employee had plausibly alleged a sex-based hostile work environment claim under California’s FEHA, which recognizes that sexual harassment doesn’t need to involve overtly sexual conduct — treating an employee adversely because of her sex is enough. The court pointed to the pattern of the CEO wanting a male CFO, sidelining the employee immediately, echoing gendered “too aggressive” criticism from male bankers, mocking her injuries from domestic violence, questioning her fitness to continue in her role, and then firing her within two weeks while explicitly citing her “domestic situation.” Concluding this was far more than isolated teasing or offhand comments, the Ninth Circuit affirmed the district court’s denial of the motion to compel arbitration, allowing the employee’s case to proceed in federal court rather than arbitration.
Action Items
- Review claims with legal counsel for potential defenses.
- Provide employees with harassment prevention training.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase
