Reverse bias, wage law exemptions top US Supreme Court's 2025 labor docket

By Daniel Wiessner

Jan 3 (Reuters) - The U.S. Supreme Court is set to consider a range of labor and employment issues in the coming year, and its decisions will have major impacts on workplace bias, wage and hour, and employee benefits litigation. Here is a look at some of the key cases teed up on the court's docket.

"MAJORITY BACKGROUNDS"

The justices will hear arguments in February over whether it should be more difficult for workers from "majority backgrounds," such as white or heterosexual people, to prove workplace discrimination claims. The court's ruling could make or break many of the growing number of such lawsuits being filed around the country.

The Supreme Court in October took up an appeal by Marlean Ames, a heterosexual woman who says she lost her job at the Ohio Department of Youth Services to a gay man and was passed over for a promotion in favor of a gay woman in violation of Title VII of the Civil Rights Act of 1964. The department has denied any discrimination and said its decisions were based on Ames' performance.

The Cincinnati-based 6th U.S. Circuit Court of Appeals ruled that Ames had not shown any "background circumstances" that would suggest she was targeted because she is straight. Since the 1980s, at least four other appeals courts have ruled similarly in cases involving white men.

Those courts have said the higher bar is justified because discrimination against members of majority groups is relatively uncommon. But other courts have said that Title VII does not distinguish between bias against minority and majority groups.

A Supreme Court ruling in favor of Ames would provide a boost to lawsuits by white and straight workers claiming they were discriminated against under company diversity, equity and inclusion policies. Such cases have become more common amid a backlash to DEI initiatives, which are expected to face further scrutiny by the Trump administration.

CAN RETIREES SUE THEIR EX-EMPLOYERS?

Turning to a different kind of workplace bias, the Supreme Court this year will weigh whether retirees can sue their former employers for disability discrimination after they leave their jobs, an issue which has divided federal appeals courts.

The justices will address the question in the case of Karyn Stanley, a retired firefighter in Sanford, Florida, who is appealing an 11th Circuit ruling that said she could not sue over a city policy curbing benefits for some disabled retirees because it no longer employed her. The city has said its policy was lawful and necessary to contain future costs on employee benefits.

At issue is whether retirees are still "qualified" for their old jobs, a requirement to sue an employer under the Americans with Disabilities Act. The 11th Circuit said a plaintiff must "hold or desire" a job in order to be qualified, joining three other appeals courts. But other courts have said the ADA's scope is unclear and the ambiguity should be decided in favor of the workers the law was designed to protect.

Stanley's lawyers in court filings said the issue affects millions of people with disabilities who rely on retirement benefits, and millions more who will become disabled in the future. The court will hear oral arguments on Jan. 13.

WAGE LAW EXEMPTIONS

The court in November heard oral arguments over how difficult it should be for employers to prove that their workers are exempt from overtime pay and other legal protections. The decision, due by June, could have a decisive impact in many wage and hour lawsuits and influence employers' decisions on whether to fight or settle class actions.

The court is weighing an appeal by grocery distributor EMD Sales of a 4th Circuit decision that said the company had failed to show by "clear and convincing evidence" that its sales representatives were eligible for an exemption from overtime pay.

Every other federal appeals court to consider the issue has said that proving workers are exempt from the Fair Labor Standards Act requires only "a preponderance of the evidence," which is the standard applied in most other types of civil litigation.

It was not clear how the court was leaning during oral arguments, but the justices seemed to more closely scrutinize the arguments by a lawyer for the sales representatives suing EMD for overtime pay. Some of the conservative justices suggested that the FLSA is no different than other federal laws that protect both individual and public rights and are subject to a preponderance of the evidence standard.

BAR FOR ERISA CLAIMS

Delving into another question that has splintered lower courts, the justices will decide how difficult it should be for plaintiffs to show that the administrators of employee benefit plans engaged in unlawful transactions with other companies, such as recordkeepers.

The Supreme Court will review the New York-based 2nd Circuit's dismissal of a class action on behalf of 28,000 Cornell University employees accusing the school's retirement plans of paying excessive recordkeeping fees, among other claims. Oral arguments are scheduled for Jan. 22.

The federal Employee Retirement Income Security Act of 1974 prohibits benefit plans from engaging in transactions with third parties unless they are necessary to operate the plan and the costs to the plan are reasonable. The plaintiffs in Cornell's case say the fees paid by their plans were excessive in violation of the law, which the Ivy League school has denied.

At least two federal appeals courts have ruled that plaintiffs claiming prohibited transactions under ERISA only have to show that such a transaction took place in order to survive a defendant's motion to dismiss. But the 2nd Circuit and three other courts have said those lawsuits must also allege that a plan engaged in the prohibited transaction with the intent to benefit the third party.

The lawsuit was one of roughly two dozen that were filed beginning in 2016 to accuse colleges and universities of violating ERISA by failing to adequately monitor retirement plans, drop underperforming investments or limit fees. Several schools have agreed to multimillion-dollar settlements.

Read more:

US Supreme Court to decide if white, straight workers face higher bar in bias lawsuits

US Supreme Court to decide if retirees can sue for disability bias

US Supreme Court won't block NLRB case pending challenge to its structure

US Supreme Court weighs higher bar for exempting workers from federal wage law

In Cornell case, US Supreme Court will review bar for some ERISA claims

DOJ v. DEI: Trump's Justice Department likely to target diversity programs

(Reporting by Daniel Wiessner in Albany, New York)

((daniel.wiessner@thomsonreuters.com))