Supreme Court

On June 5, 2025, the U.S. Supreme Court altered the landscape for employers facing “reverse discrimination” Title VII lawsuits in the Sixth, Seventh, Eighth, Tenth, and DC Circuits, by striking down a rule that had required plaintiffs from “majority groups” to allege additional “background circumstances” to state a prima facie case of employment discrimination.  Examples of “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority” included statistical data that the employer had engaged in a pattern of discrimination against majority groups or a member of the relevant minority group made the employment decision that allegedly harmed the member of the majority group.   In the other circuits, no such additional pleading requirement was required in reverse discrimination lawsuits.  Justice Jackson authored the Court’s 9-0 opinion, Ames v. Ohio Dept. of Youth Servs., No. 23-1039, and Justice Thomas filed a concurring opinion, joined by Justice Gorsuch.Continue Reading Supreme Court Holds That All Employment Discrimination is Equal: Ames v. Ohio Dept. of Youth Servs.

On April 17, 2025, the Supreme Court issued its opinion in Cunningham v. Cornell University, No. 23-1007, 604 U.S. ___ (2025), a case addressing the pleading standard for prohibited-transaction claims under § 406(a) of the Employee Retirement Income Security Act of 1974 (ERISA).  Section 406(a) proscribes certain transactions between plans and “parties in interest” absent a statutory exemption enumerated under ERISA § 408.  The core question on appeal was whether plaintiffs must allege, as an element of a prohibited-transaction claim under § 406(a), that an exemption under § 408 does not render the challenged transaction lawful.

In a decision that is expected to have wide-ranging implications, the Court held that exemptions under § 408 provide affirmative defenses to liability under § 406(a).  Consequently, plaintiffs need not allege that any of the exemptions set forth in § 408 are unavailable to state a plausible claim for relief.  Rather, the burden falls on plan fiduciary defendants to plead and prove that an exemption under § 408 nullifies a plaintiff’s claim.

The Court recognized that its decision in Cunningham could make it more difficult for defendants to secure the dismissal of prohibited-transaction claims by invoking a statutory exemption.  If so, plan sponsors (and other fiduciaries) could be forced to engage in costly discovery defending transactions that ERISA expressly permits, effectively penalizing them for providing valuable and necessary services to participants.

Provided below is a more detailed discussion of Cunningham, divided into three parts.  The first part briefly discusses the legal framework governing prohibited-transaction claims.  The second part summarizes the Court’s analysis.  The third part concludes with an overview of potential mitigation strategies.Continue Reading A Closer Look:  Supreme Court Rejects Heightened Pleading Standard for Prohibited-Transaction Claims under ERISA § 406(a)

In its decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina[1] issued on June 29, 2023, the Supreme Court held that the undergraduate admissions programs of Harvard College and the University of…

Continue Reading Considerations for Employers Following the EEOC’s Response to the Supreme Court’s Ruling on Race-Conscious College Admissions

On February 20, 2018, the Supreme Court decided CNH Industrial N.V. v. Reese, 574 U.S. ___ (2018), which raised, for the second time in three years, the question of how courts should interpret collective-bargaining agreements (“CBAs”).  Reese involved a dispute between retirees and their former employer, CNH, about whether an expired 1998 CBA created a vested right to lifetime health benefits.  In a per curiam opinion, the Court found that a straightforward reading of the CBA compelled the conclusion that retiree health benefits expired when the CBA expired in 2004.  The Court’s opinion emphasized the significance of CBA expiration dates for retiree health benefits and forcefully reiterated its decision in M&G Polymers USA, LLC v. Tackett, 574 U.S. ___ (2015), that collective-bargaining agreements must be interpreted according to “ordinary principles of contract law.”
Continue Reading Supreme Court Deals Another Blow to Sixth Circuit’s “Yard-Man Inferences”

The Supreme Court’s decision last week in Obergefell v. Hodges is big news: it held that the 14th Amendment requires states to license same-sex marriages and to recognize lawful out-of-state same-sex marriages, and thus legalized same-sex marriage throughout the country.  In a final section that begins with a philosopher’s take — “No union is more profound than marriage…”  — and ends with a jurist’s — “It is so ordered.” — the Court captured the attention of SCOTUS junkies and the rest of the country alike, leading to an outpouring of celebrations, headlines, social commentary and musing about the future.

Obergefell clearly is of cultural importance and has personal significance for many people, but what does it mean for private sector employers and their employee benefit plans?  Surprisingly little.  Private sector employee benefits are governed primarily by federal law, which had its watershed moment on this issue in 2013 when the Supreme Court required the federal government to recognize same-sex marriage in United States v. Windsor.Continue Reading Marriage Equality Decision Is Big News (But May Have Little Impact on Private Sector Employee Benefit Plans)

The Supreme Court held on March 25, 2015 in Young v. UPS that a plaintiff alleging pregnancy discrimination based upon the denial of an accommodation may proceed under the familiar McDonnell Douglas framework generally applied to Title VII discrimination claims. The Court’s decision, which resulted in a remand to the Fourth Circuit, surprised many observers in rejecting the arguments set forth by both parties in the case and instead setting forth a new rule for applying the Pregnancy Discrimination Act (“PDA”).
Continue Reading Supreme Court Makes New Rule in Analyzing Pregnancy Discrimination Act

A complaint filed this month against FedEx Corporation and its pension plan asks a court to apply the Supreme Court’s decision in Windsor v. United States retroactively.  The case is Schuett v. FedEx Corporation.  The plaintiff is the surviving same-sex spouse of a FedEx pension plan participant who died six days before the Court issued its opinion in Windsor.

Case background.  The participant and the plaintiff began living as a couple in 1983.  The participant worked as a FedEx delivery driver for 26 years while the plaintiff stayed home to care for the couple’s two children.  The participant was diagnosed with cancer and learned on June 3, 2013, that her condition was terminal.  Already registered as domestic partners in California, the couple held a bedside wedding ceremony June 19, 2013, and the participant died the following day.

Six days later, the Supreme Court held in Windsor that the U.S. Constitution requires federal law to recognize state-sanctioned same-sex marriages.  The Court overturned section 3 of the Defense of Marriage Act (“DOMA”), which defined marriage under federal law to exclude same-sex couples.  The same day, the Court decided Hollingsworth v. Perry, a procedural ruling that effectively reinstated same-sex marriage in California.  The plaintiff obtained a marriage certificate and a judicial order declaring the couple’s marriage legally valid as of June 19, 2013.
Continue Reading Lawsuit by Surviving Same-Sex Spouse Raises Windsor Retroactivity Question

Earlier this week, the Supreme Court issued its opinion in M&G Polymers USA v. Tackett, addressing the question whether a collective bargaining agreement is presumed to provide vested retiree medical benefits.  Unlike pension benefits, welfare benefits, such as retiree medical coverage, are not subject to statutory vesting rules under ERISA.  Accordingly, whether an employer may reduce or eliminate retiree medical coverage depends on the promises the employer has made.  These promises are typically analyzed under ordinary contract principles.  However, a seminal 1986 decision in the Sixth Circuit, International Union, United Auto, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, established an inference—perhaps even a presumption—that retiree medical benefits required by a collective bargaining agreement could never be taken away unless the bargaining agreement expressly provided otherwise.  Last Monday, the Supreme Court unanimously overturned Yard-Man and its progeny.
Continue Reading Supreme Court Overturns Inference of Vesting of Bargained Retiree Benefits

Earlier today, the Supreme Court agreed to review the Sixth Circuit’s decision United States v. Quality Stores.  In that decision, the Sixth Circuit sided with taxpayers and concluded that certain severance payments that qualify as supplemental unemployment benefit payments (or “SUB” payments) for federal income tax purposes are not…
Continue Reading Supreme Court To Resolve Whether Severance Pay for Layoffs Is Subject to FICA Tax

More than a month after the Supreme Court struck down section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, employers are still waiting for the federal government to answer fundamental questions about the rights of same-sex spouses in the post-DOMA world.  In the meantime, however, lower federal courts have begun to come to grips with these questions in decisions interpreting and applying the Supreme Court’s Windsor decision.

A significant issue for employers is whether they should determine a couple’s marital status based on the law of the state where the marriage was celebrated, even if the couple now resides in a state that does not recognize same-sex marriage.  A number of states have “mini-DOMA” statutes declaring that the state will not recognize same-sex marriages, including marriages performed in other jurisdictions.

Although the Supreme Court held in Windsor that the federal government cannot refuse to recognize a same-sex marriage that is recognized under state law, the Supreme Court did not address section 2 of DOMA, which provides that a state is not required to recognize a same-sex marriage performed in a different state.  As a result, Windsor leaves open the possibility that a same-sex couple’s marriage might be valid in some states and not in others.  A rule that requires plan sponsors to look to a couple’s state of residence rather than to the state of celebration to determine the validity of their marriage would create significant administrative burdens.
Continue Reading Federal Courts Decide Rights of Same-Sex Spouses After DOMA