The last six months have been a tumultuous time for employers. The pace and degree of change is creating new challenges — and ongoing uncertainty. Our Mid-Year 2025 report sifts through the volume of federal-level executive activity and judicial decisions to provide perspective on the developments that are setting the tone and will have longer-term impact on employers.
SCOTUS 2024 – 2025
The U.S. Supreme Court has been active again this year. Many of the cases impacting employers focused on defenses and procedural issues in litigation, making some cases easier to defend and others more challenging. The cases presented here shift procedural processes and alter perspectives on employee rights, both of which will affect employers for years to come.
A. J. T. v. Osseo Area Schools (No. 24-249)
Argued 04.28.25 | Decided 06.12.25
Question(s) Presented
Whether the ADA and Rehabilitation Act require students with disabilities to satisfy a different standard than a "bad faith or gross misjudgment" standard when seeking relief for discrimination relating to their education.
Decision
The Court held that student ADA and Rehabilitation Act claims should be subject to the same standards as in other settings and rejected a higher "bad faith or gross misjudgment" standard. The Supreme Court refused to address the further issue raised by the school district over what the standards should be and whether they should be the same regardless of whether the plaintiff was seeking damages or an injunction. These issues were not properly raised below and were not properly before the Supreme Court.
Additional Resource(s)
Ames v. Ohio Department of Youth Services (No. 23-1039)
Argued 02.26.25 | Decided 06.06.25
Question(s) Presented
In addition to pleading the other elements of Title VII, must a majority-group plaintiff show "background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority?"
Decision
In a unanimous decision, the Court invalidated the "background circumstances" rule for Title VII claims, resolving a split in the circuits and holding that courts must evaluate claims brought by majority-group plaintiffs under the same evidentiary framework as minority-group plaintiffs.
Additional Resource(s)
U.S. Supreme Court Reverses 'Reverse' Employment Discrimination Pleading Standard
Catholic Charities Bureau Inc. v. Wisconsin Labor & Industry Review Commission (No. 24-154)
Argued 03.31.25 | Decided 06.05.25
Question(s) Presented
Does a state violate the First Amendment's Religion Clauses by denying a religious organization an otherwise-available tax exemption because the organization does not meet the state's criteria for religious behavior?
Decision
The Court's unanimous decision held that Wisconsin's denial of a religious exemption from unemployment insurance taxes to Catholic Charities Bureau and its affiliates violated the First Amendment. The Court found that the state's interpretation of its exemption statute imposed a denominational preference and failed to apply religious neutrality as constitutionally required.
Cunningham v. Cornell University (No. 23-1007)
Argued 01.22.25 | Decided 04.17.25
Question(s) Presented
Whether a plaintiff can state a claim by alleging that a plan fiduciary engaged in a prohibited transaction, or whether a plaintiff must plead and prove additional elements and facts not contained in the provision's text.
Decision
The Court, in a unanimous decision, held that plaintiffs are not required to preemptively allege that ERISA's exemptions do not apply. Instead, the burden is on the plan fiduciaries to raise and prove these exemptions as affirmative defenses. The decision resolved a circuit split and aligned with the Eighth and Ninth Circuits to treat ERISA exemptions as affirmative defenses rather than necessary elements of the claim to be initially pled by plaintiffs.
Additional Resource(s)
Supreme Court Clarifies ERISA Prohibited Transaction Pleading Standards
Kousisis v. United States (No. 23-909)
Argued 12.09.24 | Decided 05.22.25
Question(s) Presented
Whether a defendant who induces a victim to enter into a transaction under materially false pretenses can be convicted of federal fraud under 18 U.S.C. §1343, even if the defendant did not seek to cause the victim economic loss.
Decision
The Court held that a defendant, that had falsely represented the use of a disadvantaged business to help fulfill a government contract, can be convicted of wire fraud even if they did not intend to cause the victim economic loss, as long as they used materially false pretenses to induce the victim into a transaction involving money or property. The Court reiterated that materiality of falsehood is an element of, and limit on, the federal fraud statutes.
EMD Sales Inc. v. Carrera (No. 23-217)
Argued 11.05.24 | Decided 01.15.25
Question(s) Presented
Whether employers must demonstrate the applicability of an FLSA exemption by a mere preponderance of the evidence or clear and convincing evidence.
Decision
Employers do not have to meet a heightened "clear and convincing" standard of proof to establish that an employee is exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). The Court's decision makes clear that the default "preponderance of the evidence" burden of proof applicable in civil cases controls when employers seek to establish that an exemption applies as an affirmative defense in FLSA cases. In a unanimous decision, the Court reversed a decision of the U.S. Court of Appeals for the Fourth Circuit that found a higher standard applies. The Fourth Circuit's standard was an outlier, as every other circuit to address the issue held a preponderance of the evidence standard applies.
Additional Resource(s)
Stanley v. City of Sanford, Florida (No. 23-997)
Argued 01.13.25 | Decided 06.20.25
Question(s) Presented
Whether former employees have a right to sue their former employer under the Americans with Disabilities Act (ADA) for discrimination relating to receipt of post-employment fringe benefits.
Decision
Resolving a circuit split, the Court determined that Title I's protections do not extend to retirees who do not hold or seek employment at the time of the alleged discrimination. The Supreme Court determined that "to prevail under §12112(a), a plaintiff must plead and prove that she held or desired a job, and could perform its essential functions with or without reasonable accommodation, at the time of an employer's alleged act of disability-based discrimination."
Additional Resource(s)
Timing Is Everything: SCOTUS Shuts Down Retiree's ADA Post-Employment Benefits Claim
U.S. Supreme Court Urged to Extend ADA Protections to Former Employees
Trump v. CASA Inc., Trump v. Washington, Trump v. New
Jersey
(No. 24a884)
Argued 05.15.25 | Decided 06.27.25
Question(s) Presented
Whether the Court should stay the district courts' nationwide preliminary injunctions on the Trump administration's Jan. 20 executive order ending birthright citizenship except as to the individual plaintiffs and identified members of the organizational plaintiffs or states.
Decision
The Court's 6-3 opinion partially stayed the nationwide injunctions issued by three district courts against enforcing President Trump's EO 14160, "Protecting the Meaning and Value of American Citizenship," that plaintiffs believe fundamentally changed birthright citizenship guaranteed by the U.S. Constitution. Trump, et al. v. CASA, Inc., et al.
While the opinion ends district courts' ability to issue nationwide injunctions, the Court did not address the underlying issue in the case involving the constitutionality of an EO limiting birthright citizenship.
Many previous nationwide injunctions affected employers across a wide range of issues beyond immigration, including DEI, overtime rules and non-competes.
EO 14160 will take effect 30 days after the opinion date (07.27.25), and government agencies can develop and issue guidance concerning the implementation of the order.
Additional Resource(s)
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