Federal Court Updates
D.C. Circuit: NLRB’s “Successor Bar” Requirement Invalidated
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APPLIES TO Employers with Employees in D.C. |
EFFECTIVE JUL 29, 2026 |
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Discussion
In Hospital Menonita de Guayama, Inc. v. NLRB, the U.S. Circuit Court of Appeals for the District of Columbia reviewed the National Labor Relations Board’s (NLRB) “successor bar” policy in light of the ruling in Loper Bright ending deference to government agency interpretations and requiring court review under the law. The “successor bar” refers to when a company is bought by a new owner, the new owner must recognize and bargain with whatever union represented the old company’s workers (for up to a full year) even if that union no longer has the support of most employees.
Here, the employer became a new owner in 2017 and inherited a union that hadn’t negotiated contracts for two of its five bargaining units in years, and had expired contracts for the other three. When the employer got evidence that a majority of employees in every unit had actually rejected the union, it stopped bargaining and withdrew recognition. The NLRB initially ruled against the employer, applying the successor bar and refusing to look at the evidence. Because of the Loper Bright case, the U.S. Supreme Court sent this case back to the D.C. Circuit to reconsider its ruling.
Reviewing the issue independent of the NLRB’s interpretation, the court concluded that the successor bar policy violates federal labor law. The National Labor Relations Act (NLRA) gives employees the right to choose their own bargaining representative (or none at all), and it says a union can only be the “exclusive” representative if it actually has support from a majority of workers. The successor bar contradicts both of these rules because it forces an employer to bargain with a union for up to a year regardless of whether that union still has majority support, effectively locking in a union even after most employees have rejected it. The court emphasized that employers are “prohibited from bargaining with a union that lacks majority support.”
Moreover, were it not for the successor bar’s mandatory one-year bargaining period post-acquisition, the employer would otherwise be allowed to defend any other refusal to bargain claim with evidence that the union lacks majority support. The court also pointed out that Congress only created one specific one-year waiting period in the statute (after a valid election), and it didn’t authorize the NLRB to create a similar freeze whenever a business changes hands. As a result, the court ruled in favor of the employer, rejecting the NLRB’s order that had forced it to keep recognizing and bargaining with the union.
Action Items
- Consult with legal counsel before ceasing bargaining or withdrawing recognition of a union.
Second Circuit: Raising the Bar for Religious Accommodation Claims
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APPLIES TO All Employers with Employees in CT, NY, and VT |
EFFECTIVE JUL 15, 2026 |
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Discussion
In Bergin v. New York State Unified Court System, the Second Circuit Court of Appeals held that, in order to succeed on a Title VII failure-to-accommodate claim premised on a religious belief, an employee must also show that the employer’s desire to avoid providing the accommodation was a motivating factor in the adverse employment decision.
This case arose after an employer denied the plaintiff employee’s request for a religious exemption from the company’s Covid-19 vaccination requirement and subsequently terminated the individual’s employment. The employee’s stated objections included concerns about bodily integrity and the use of stem cells. The employee later sued under Title VII, claiming religious discrimination, and a federal district court initially ruled in her favor.
The Second Circuit reversed the district court’s ruling and, in doing so, changed the standard employees in its jurisdiction must meet going forward. Previously, an employee could establish a claim by showing that they held a genuine religious belief conflicting with a work requirement, informed their employer of that belief, and was disciplined for failing to comply. Relying on the U.S. Supreme Court’s 2015 decision in EEOC v. Abercrombie & Fitch Stores, Inc., the Second Circuit held that this older standard no longer applies. Under the updated standard, an employee must also demonstrate that the employer’s desire to avoid providing the requested accommodation was a motivating factor behind the adverse action taken against them.
Applying this standard to the facts, the court found that the employee had not provided her employer with sufficient information to support her accommodation request in the first place, and had not shown that the employer’s motive for denying the request was tied to a desire to avoid accommodating her. As a result, the court sent the case back to the lower court for further proceedings consistent with this new standard.
Although this decision gives employers in the Second Circuit a somewhat stronger footing when defending accommodation denials, it does not lower the bar for how employers should handle these requests in practice. The court was clear that an employer’s knowledge of an employee’s need for accommodation can still serve as evidence of improper motive, even though the lack of such knowledge is not automatically fatal to an employee’s claim. In other words, employers who are aware of a request and deny it without a well-documented, non-discriminatory rationale remain just as exposed as before.
Employers are encouraged to engage with each accommodation request individually, gather sufficient information to evaluate it, and clearly document the accommodation process from start to finish, including, but not limited to, the basis for any denial, the terms of any approved accommodation, and any follow-up review of how the accommodation may be working over time.
Action Items
- Review religious accommodation procedures for compliance.
- Document each individual accommodation process, including denials, approvals, and follow-up review.
- Have appropriate personnel trained on religious accommodation requirements.
- Consult legal counsel when questions arise about a specific accommodation request or denial.
Second Circuit: Limits on Binding Former Employees to Later-Negotiated Arbitration Agreements
On July 10, 2026, in 1199 SEIU United Healthcare Workers East v. PSC Community Services, the Second Circuit held that former bargaining unit employees could not be compelled to arbitrate statutory wage claims under an alternate dispute resolution (ADR) provision the union negotiated with employers after those employees had already left their jobs. In this case, home health aides who were union members filed state wage and hour lawsuits, and after courts declined to compel arbitration of those claims, the union and a group of employers negotiated a new ADR agreement requiring mandatory arbitration of many wage and hour disputes. The union then pursued claims through arbitration on behalf of more than 100,000 current and former workers. The court found that a union does not automatically retain authority to bind former employees to later-negotiated arbitration terms, absent evidence that those employees expressly or implicitly agreed to continued representation. Employers relying on collectively bargained for arbitration or other ADR provisions should consult with legal counsel as to whether that coverage extends to former employees and should account for this limitation when negotiating future agreements.
Third Circuit: Clarification on ADA Notice Requirements
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APPLIES TO All Employers with Employees in DE, NJ, PA, and the U.S. Virgin Islands |
EFFECTIVE JUL 20, 2026 |
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Discussion
In Hileman v. West Penn Allegheny Health System Inc., the Third Circuit Court of Appeals held that an employee cannot use a late or unclear disclosure of a disability to avoid discipline for misconduct that was already under investigation. The court affirmed summary judgment for the employer, explaining that disability discrimination laws serve as protection against discrimination, not as a way to excuse rule violations after the fact.
In this case, the plaintiff employee worked as a CT technologist and had previously been written up for attendance issues, with instructions on how to request an accommodation or leave if needed. Months later, a coworker reported that the employee was sleeping on duty, which was a terminable offense under the employer’s policies. When the supervisor confronted the employee, she denied sleeping but mentioned her eyes may have been closed because they were dry, due to a recent change in her diabetes medication. This was the first time she had disclosed having diabetes. On the supervisor’s request, the employee later submitted the following written statement as part of the employer’s investigation into the matter: “Recent diagnosis of diabetes, working diligently with md to adjust medication causing severe dry eyes & irritation frequently using lubricated eye drops to help and praying.” Ultimately, the employer decided to terminate her employment, and the employee subsequently sued for disability discrimination, failure to accommodate, and retaliation.
In reviewing the case, the circuit court found that the investigation into the sleeping incident began before the employee ever mentioned her diabetes, so there was no meaningful connection between her disclosure and her termination. They also found her statements too vague to count as a genuine accommodation request. The court emphasized that employers must respond to what they actually know, not what they might suspect, noting that employers are not obligated to search for a disability without some clear signal that one exists. The outcome may differ where a disability or the need for accommodation is visibly obvious or based on already known facts, but that was not the situation here.
The court also rejected the idea that raising a disability during a disciplinary process should pause or unwind an employer’s decision to discipline. Because the employer’s investigation and decision were already underway before the employee mentioned her diabetes, her later disclosure did not shield her from the consequences of her conduct.
This case reinforces that employees are generally responsible for clearly communicating a need for accommodation before, rather than during or after, facing discipline for related misconduct. Employers are not required to excuse a rule violation simply because an employee raises a disability once disciplinary action is already in motion. At the same time, this decision does not change an employer’s obligation to accommodate a disability or otherwise engage in the interactive process with an employee who has properly identified the need for an accommodation.
Action Items
- Establish clear channels for employees to request accommodations or otherwise raise concerns about medical conditions impacting their job duties.
- Maintain clear records showing the sequence of events between disciplinary procedures and any related or subsequent accommodation requests or disability disclosures.
- Consult with legal counsel when an employee raises a disability or accommodation need during an active disciplinary process.
- Have appropriate personnel trained on the requirements.
Fifth Circuit: OSHA Recordkeeping for Mental Illnesses
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APPLIES TO All Employers with Employees in LA, MS, and TX |
EFFECTIVE JUL 21, 2026 |
QUESTIONS? Contact HR On-Call |
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Discussion
In Exxon Mobil Corp. v. Occupational Safety and Health Review Commission, the Fifth Circuit held that the Occupational Safety and Health Administration (OSHA) exceeded its authority by requiring employers to record work-related mental illnesses on their injury and illness logs.
By way of background, OSHA’s recordkeeping regulations generally require covered employers to track work-related injuries and illnesses using two forms. Form 300 is an ongoing log of qualifying incidents throughout the year, capturing basic details like the nature of the injury or illness, when and where it occurred, and whether it led to lost time, restricted duty, or a job transfer. Form 301 provides a more detailed report for each incident recorded on the Form 300 log, including how the incident happened and what treatment was provided.
In this case, an employee who was involved in the emergency response efforts to a 2021 explosion and fire was later diagnosed with post-traumatic stress disorder (PTSD) by several healthcare providers, all of whom attributed the diagnosis to the workplace incident. The employer disputed that conclusion and therefore did not record the diagnosis as a work-related incident. As a result, OSHA cited the employer for violating its recordkeeping requirements and issued a penalty. The employer contested the penalty, arguing that OSHA did not have the legal authority to require mental illnesses to be recorded.
In reviewing the case, the Fifth Circuit concluded that OSHA did not have that authority, finding that the underlying statute, which allows OSHA to require records of work-related deaths, injuries, and illnesses, was written with physical harms in mind. The court pointed to the surrounding language in the statute addressing occupational accidents, toxic materials, and physical hazards, and concluded that Congress’s focus was on physical, not psychological, conditions. The court also looked at how “illness” was commonly understood when the underlying law was passed in 1970, finding that the term generally referred to physical disease rather than mental health conditions. Based on this reasoning, the court struck down the specific regulation requiring mental illness recordkeeping and voided the citation issued to the employer.
As a result of this decision, employers in Louisiana, Mississippi, and Texas are no longer required to record work-related mental illnesses under the vacated provision. Outside the Fifth Circuit, the ruling does not change existing OSHA recordkeeping obligations, but it may cast doubt on OSHA’s long-held position that mental illnesses fall within its recordkeeping authority nationwide. As a result, the ruling could invite similar challenges in other jurisdictions. Employers should continue to monitor developments within their jurisdiction.
Action Items
- Review OSHA recordkeeping practices for compliance with jurisdictional requirements.
- Consult legal counsel on specific work-related mental illness and recordability under applicable law.
- Have appropriate personnel trained on OSHA reporting and recordkeeping requirements.
Sixth Circuit: Proof of Irreparable Harm Required for NLRA Preliminary Injunction
On May 1, 2026, in Kerwin v. Trinity Health Grand Haven Hospital, the Sixth Circuit Court of Appeals used the Starbucks Corp. v. McKinney four-part test to determine whether a preliminary injunction should be issued to force the employer to bargain after a challenge to a union recognition withdrawal. The court said that all four factors must each be satisfied; in particular, the second factor, that real, immediate, irreparable harm would occur without an injunction, must be satisfied using factual evidence rather than just legal argument and inference. Because sufficient factual evidence was not presented here, the request for a preliminary injunction was denied, even where the court determined that the employee may ultimately succeed on the merits of their claim for failure to bargain.
Sixth Circuit: Title VII Does Not Shield Unrelated Misconduct from Discipline
On July 17, 2026, in Crisp v. Scioto Ambulance District, the Sixth Circuit affirmed dismissal of a retaliation claim brought by an EMT who was terminated after showing several coworkers pornographic photos of a male colleague and his wife. Years earlier, the plaintiff had complained that the same male colleague groped her and attempted to shove her into a trash can. The employer responded by separating their schedules but took no further action against the male colleague. When the plaintiff was later fired for displaying the pornographic images, she argued the termination was unlawful retaliation for her earlier harassment complaint, reasoning that her conduct was a response to the male colleague’s original misconduct. The Sixth Circuit rejected that argument, holding that even if her original complaint was protected activity, it did not give her the right to display alleged pornography in the workplace years afterward, and her employer was entitled to discipline that separate, unrelated misconduct. The case serves as a reminder that workplace misconduct and protected complaints should be evaluated as separate issues, with disciplinary decisions clearly documented and based on the misconduct itself rather than any underlying complaint.
Ninth Circuit: Individual PAGA Claims Cannot be Compelled to Arbitration Under CAA
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APPLIES TO All Employers with Employees in CA |
EFFECTIVE JUL 30, 2026 |
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Discussion
In Saige v. Capstone Logistics LLC, in an unpublished opinion, the Ninth Circuit Court of Appeals said the rule that individual and representative Private Attorneys General Act (PAGA) claims cannot be separated does apply to agreements covered by the California Arbitration Act (CAA), even though the rule does not apply to agreements covered by the Federal Arbitration Act (FAA).
To understand this ruling, it is important to look back at how we got to this point. First, in Iskanian v. CLS Transportation Los Angeles, LLC, the California Supreme Court held that individual PAGA claims could not be arbitrated according to agreement because they could not be separated from non-individual (“representative”) PAGA claims, and maintained that representative PAGA claims cannot be waived by agreement. Historically, arbitration agreements would separate individual and non-individual PAGA claims to arbitrate the individual claims and waive the representative claims; PAGA itself does not allow a representative claim to survive in court without the individual portion of the claim, thereby causing the representative claim to be dismissed. Iskanian sought to protect employee PAGA rights from this practice.
Then, in Viking River Cruises, Inc. v. Moriana, the U.S. Supreme Court said that where a motion to compel arbitration is brought under the FAA, “the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” In response, the California Supreme Court in Adolph acknowledged that Viking River only applied in cases where the FAA had jurisdiction.
Ultimately, the Ninth Circuit relied on a recent California Court of Appeals case, Villalobos v. Maersk, Inc., that reviewed Adolph and concluded that, where “California law applies, … ‘the rule of Iskanian’—that ‘precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate’—does apply.” The court predicted the California Supreme Court would agree with Villalobos. Because the employees’ individual and non-individual PAGA claims could not be severed under the CAA, the PAGA claims had to be litigated in court rather than arbitration, and FAA preemption did not apply in this case. As a result, the employer’s motion to compel arbitration of the individual PAGA claims was denied.
This case highlights the complex, ongoing battle over whether individual PAGA claims can be separately arbitrated. Success may depend on whether an arbitration agreement is covered by the CAA or FAA. Although this is an unpublished case, which means it has no precedential value in other cases, its reasoning may be copied in other instances and Villalobos may be viewed as persuasive. Employers should take care to have arbitration agreements reviewed by legal counsel in light of this ruling.
Action Items
- Have arbitration agreements reviewed by legal counsel.
Tenth Circuit: Threshold Required for Hostile Work Environment Claims
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APPLIES TO All Employers with Employees in CO, KS, NM, OK, UT, and WY |
EFFECTIVE JUL 13, 2026 |
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Discussion
In Sharpe-Miller v. Walmart, Inc., the Tenth Circuit Court of Appeals ruled that a plaintiff does not have to be subjected to a “steady barrage” of discrimination for a hostile work environment claim where a smaller number of discriminatory acts can also support a claim.
Here, the plaintiff was a gay man who worked at a Walmart retail store in several different roles over the course of his employment. Throughout his employment, he experienced anti-gay slurs including drawings in the breakroom, mocking the way he walked or moved, questions about his personal relationships, false accusations of sexual harassment, and accusations that he was a pedophile. He was also terminated briefly after reporting an absence for jury duty and was rehired after protesting the termination. He was also denied vacation requests where others were approved. He eventually resigned and brought claims against Walmart for disparate treatment, retaliation, constructive discharge, and hostile work environment. The U.S. District Court for the District of New Mexico granted summary judgment in favor of Walmart.
The circuit court upheld summary judgment for four of the claims but found the hostile work environment should be reinstated for trial. In reaching its ruling, the court found that the standard applied for a hostile work environment was incorrect. While its previous rulings stated that a hostile work environment claim requires a “steady barrage” of discrimination, it is not the entire legal standard for the claim. A small number of highly outrageous or severe acts can also create a hostile work environment. The proper standard is the totality of the circumstances, taking into consideration the frequency, severity, whether conduct is physically threatening or humiliating, and whether it unreasonably interferes with work performance.
The court found that the combination of multiple homophobic slurs, comments about the plaintiff’s feminine walk or the way he held his wrists, homophobic drawings in the breakroom, comments equating homosexuality to pedophilia and bestiality, and false accusations of sexual harassment made by those who had repeatedly mocked the plaintiff for being gay could be viewed together in the context of discriminatory acts supporting a hostile work environment claim. Ultimately, the court found the lower court erred in finding summary judgment in favor of Walmart for this claim and a reasonable jury could have found the facts supported a finding of a hostile work environment.
Action Items
- Review harassment and discrimination policies for compliance with applicable laws.
- Conduct annual harassment and discrimination training for entire workforce.
- Promptly investigate all complaints of violations of the harassment and discrimination policy.
- Have appropriate personnel trained on anti-discrimination and harassment requirements.
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