Federal Court Updates
Discussion
Third Circuit: Retaliation Standard Under ADA and FMLA
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APPLIES TO All Employers with Employees in DE, NJ, PA, and the U.S. Virgin Islands |
EFFECTIVE JUN 24, 2026 |
QUESTIONS? Contact HR On-Call |
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Discussion
On June 24, 2026, the Third Circuit issued a decision in Steidle v. United States Liability Insurance Co., Inc., clarifying the scope of actionable retaliation under the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA). In this case, an employee claimed that his employer retaliated against him for requesting FMLA leave and workplace accommodations by giving him lower-than-expected bonuses and salary increases. The district court had granted summary judgment to the employer, finding that the plaintiff had not suffered an “adverse employment action” and failed to establish causation. The Third Circuit considered whether ADA and FMLA retaliation claims are limited to traditional employment actions affecting compensation or job status, or whether they are instead governed by the broader “materially adverse” standard the U.S. Supreme Court set for Title VII retaliation claims in Burlington Northern & Santa Fe Railway Co. v. White.
In making its decision, the court adopted the broader standard, holding that an employer’s action is materially adverse if it could dissuade a reasonable employee from engaging in protected activity, such as requesting leave or an accommodation. Applying this standard, the court rejected a narrow interpretation that would have excluded discretionary compensation decisions from scrutiny, instead concluding that reduced bonuses and salary increases, particularly when closely tied in time to protected activity, may constitute actionable retaliation.
This decision means that compensation decisions, including discretionary bonuses and merit increases, now squarely fall within the scope of potential ADA and FMLA retaliation exposure. This ruling also emphasizes the importance of maintaining well-documented, consistent, and objective criteria for compensation decisions, particularly for employees who have recently requested leave or an accommodation.
Action Items
- Review compensation decision-making processes for consistent, objective, performance-based criteria.
- Consult with legal counsel when compensation decisions closely follow an employee’s leave or accommodation request.
Fourth Circuit: Employee Dissatisfaction with Accommodation Is Not a Failure to Accommodate
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APPLIES TO Employers with 15+ Employees in MD, NC, SC, VA, and WV |
EFFECTIVE MAR 3, 2026 |
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Discussion
In Redding v. Noem, the Fourth Circuit affirmed the dismissal of a failure-to-accommodate claim brought under the Rehabilitation Act (the federal-employee analog to the ADA), reinforcing key principles that apply equally to ADA accommodation claims in the private sector.
In this case, the plaintiff worked as a federal air marshal for the Transportation Security Administration (TSA) for more than seven years. After developing certain medical conditions over time, she was placed on temporary “light duty” status. Eventually, TSA informed her that she could no longer meet the agency’s medical standards for her position and recommended she seek reassignment. In requesting reassignment, the employee herself acknowledged her “inability to perform the essential duties” of her position. With no open positions available within TSA, the employee applied for and was reassigned, at her own selection, to a position at another federal agency. After struggling in the new role, she sought reconsideration of her assignment, but TSA advised it could no longer assist her since she was no longer a TSA employee. She then sued, arguing TSA should have kept her permanently in the light-duty position.
The Fourth Circuit affirmed dismissal on two independent grounds. First, the employee’s own admission that she could not perform the essential functions of her position meant she was not a “qualified individual” under the Rehabilitation Act/ADA framework. Second, even setting that aside, the court found TSA had provided a reasonable accommodation when it placed her on light duty, searched for vacant positions within TSA when she could no longer perform even the adjusted duties, and ultimately facilitated a reassignment to another agency. Critically, because the employee herself had identified and selected the reassignment position, her later dissatisfaction with that choice did not retroactively make TSA’s accommodation “unreasonable.” As the court put it, the interactive process gives employees “a meaningful voice” but does not guarantee them their preferred outcome, and TSA’s accommodation obligations ended once the reassignment was completed.
For employers, this case emphasizes the importance of maintaining accurate documentation throughout the interactive process. This includes, but is not limited to, accommodation offers, employee responses, and reasons for rejecting or pursuing a particular accommodation option. Job descriptions should also clearly and accurately define essential functions, as courts give considerable deference to an employer’s judgment on what functions are essential to a role.
Action Items
- Review job descriptions for clear and accurately defined essential functions.
- Maintain accurate documentation of interactive process for all accommodation requests.
- Have appropriate personnel trained on ADA requirements.
- Consult with legal counsel when evaluating reassignment or other accommodations of last resort.
Eight Circuit: Vaccine Mandates Are Not “Essential Job Functions” Under the ADA
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APPLIES TO All Employers with Employees in AR, IA, MN, MO, NE, ND, and SD |
EFFECTIVE JUN 15, 2026 |
QUESTIONS? Contact HR On-Call |
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Discussion
In Klimek v. CentraCare Health System, the Eighth Circuit ruled that the plaintiff’s ADA disability discrimination claim, based on a request for a medical exemption from a COVID-19 vaccine mandate, could move forward. Here, Klimek was a CentraCare nurse who suffered a workplace injury leading to Reflex Sympathetic Dystrophy (RSD) which caused chronic pain, nausea, and vertigo. In 2016, CentraCare required all employees to receive the MMR vaccine for which Klimek applied for a medical exemption. CentraCare approved the exemption and said she was permanently exempt from live vaccinations while being treated for RSD. In 2021, Klimek then moved to a position as a clinical documentation integrity specialist which was 100% remote with no in-patient contact. That same year, CentraCare required all employees to obtain a COVID-19 vaccine absent a medical or religious exemption. Klimek requested a medical exemption like she had in the past, but CentraCare denied it without explanation – even after she submitted a letter explaining that she was 100% remote with no coworker or patient contact. CentraCare then placed Klimek on involuntary unpaid leave of absence which effectively ended her employment.
A lower court initially granted summary judgment in favor of CentraCare; however, the Eighth Circuit reversed. In reaching its decision, the court rejected CentraCare’s argument that its vaccine policy itself qualified as an “essential job function,” explaining that a vaccine exemption is an accommodation, not an essential function, and that treating the two as the same would run contrary to the ADA. Instead, the relevant question was whether in-person patient care was an essential function of Klimek’s job, and the court found that it was not. The court also found that CentraCare had knowledge of her disability based on her prior vaccine exemption requests and had received sufficient medical documentation to trigger the interactive process, which CentraCare failed to engage in.
This case serves as a reminder for healthcare employers that vaccine policies cannot be treated as an essential job function on their own, but must instead be tied to the specific duties of the role in question. It also underscores that once an employer has sufficient information indicating a disability, it must engage in the interactive process in good faith.
Action Items
- Review vaccine policies and practices for compliance with medical and religious exemptions.
- Review procedures for engaging in the interactive process when the need for a medical accommodation is known.
- Have appropriate personnel trained on workplace accommodation requirements.
Ninth Circuit: Compelling Arbitration
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APPLIES TO All Employers with Employees in AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and Northern Mariana Islands |
EFFECTIVE JUN 9, 2026 |
QUESTIONS? Contact HR On-Call |
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Discussion
In Orr v. United Parcel Service, Inc., the Ninth Circuit said the district court erred by compelling arbitration of an employee’s individual claims without specifying the source of its authority to do so. Specifically, the U.S. Supreme Court previously held in New Prime Inc. v. Oliveira that the district court, not an arbitrator, must decide whether the Federal Arbitration Act (FAA) applies to an agreement before ordering arbitration.
Here, an employer sought to compel arbitration of a former employee’s claims filed in court. The district court said that the employee’s claims must proceed to arbitration regardless of the applicable law, so the court did not need to determine whether the federal or state arbitration law applies. In ordering the claim to arbitration without further ruling, it would have left the determination of applicable arbitration law to the arbitrator.
The Ninth Circuit reiterated New Prime’s instruction to courts to determine the basis of their authority to compel claims to arbitration, which was not done here. Additionally, the arbitration agreement at issue selected the FAA as controlling law unless the FAA “does not apply to a particular dispute or to one or both parties.” To enforce the agreement by its terms, the district court had to decide whether the FAA or state law supplied its authority to compel arbitration. Because the district court did not decide the contractual question (e.g., whether the FAA is applicable) the arbitrator would need to, which New Prime forbids.
Action Items
- Review arbitration agreements with legal counsel for compliance.
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