Littler Lightbulb – February 2026 Employment Appellate Roundup

Fifth Circuit Holds Plaintiff Not Entitled to Overtime Unless Company Had Actual or Constructive Knowledge of Time Worked

Following a jury verdict finding the plaintiff in Merritt v. Tex. Farm Bureau, __F.4th __ (5th Cir. Feb. 6, 2026) was not entitled to overtime pay because the employer did not have actual or constructive knowledge of the overtime worked, the plaintiff filed motions seeking to overturn the verdict, which the district court denied. 

On appeal to the Fifth Circuit, the plaintiff, who was classified as an independent contractor, was paid on commission and did not have an obligation to report hours worked, argued that because the company allowed him to work unlimited hours, it had an obligation to pay him overtime and knowledge of his overtime work was irrelevant. The Fifth Circuit rejected this argument, stating that allowing an employee to work as much as they please does not mean that an employer’s knowledge of overtime work is irrelevant, noting that it has “consistently required employees claiming an entitlement to overtime pay to prove their employer’s ‘knowledge, actual or constructive, that [the employees] w[ere] working’ overtime.” 

Next the court rejected the plaintiff’s argument that the company’s lack of a timekeeping system constituted constructive knowledge of his overtime and that the lack of a timekeeping system demonstrated a failure to exercise “reasonable diligence” to find out about the plaintiff’s overtime. The Fifth Circuit held this argument “would incorrectly flip [the plaintiff’s] burden onto [the company].” Moreover, the court stated, an employer’s failure to maintain a timekeeping system does not, by itself, constitute constructive knowledge of an employee’s overtime work.

Last, the Fifth Circuit rejected the plaintiff’s assertion that the district court erroneously instructed the jury that the plaintiff had a duty to notify the company he was working overtime, finding that the charge was modeled after the Fifth Circuit’s pattern jury instructions, and that the plaintiff failed to cite any authority to the contrary.

Sixth Circuit Affirms Summary Judgment for the Employer in an Age Discrimination Case 

After receiving a below-average mid-year performance evaluation, followed by a year-end poor performance rating, the plaintiff in Yacko v. GM Co., __ F.4th __ (6th Cir. Feb. 12, 2026)¹ was identified as an underperforming employee and terminated from employment, along with another underperforming employee who was 15 years younger. The plaintiff filed suit in state court, alleging age discrimination under Ohio law, and the employer removed the case to federal district court based on diversity of citizenship. The district court granted the employer’s motion for summary judgment, and the plaintiff appealed to the Sixth Circuit. 

Applying the same legal standard to the plaintiff’s state law claim as under the Age Discrimination in Employment Act (ADEA), the Sixth Circuit stated that ADEA plaintiffs must establish, among other things, that they were either replaced by someone who was younger, or treated less favorably than similarly situated younger employees. In cases where the plaintiff is replaced by a person who is between six and ten years younger than the plaintiff, the Sixth Circuit requires the plaintiff to provide other evidence to support the claim that age was a factor in the employment decision. The plaintiff in this case was replaced by an individual who was more than six years but less than seven years younger than the plaintiff, but he was unable to provide any other evidence of age discrimination. Moreover, there was no evidence that the company’s decisionmakers knew the ages of the plaintiff or his replacement when they made their decisions.

The plaintiff was also unable to establish that other similarly situated younger employees were treated more favorably, especially in light of the fact that the other employee who was terminated from employment along with the plaintiff was 15 years younger. Based on all the evidence, the Sixth Circuit affirmed summary judgment for the employer. 

Eighth Circuit Holds Employer’s Covid-19 Vaccination and Testing Policies Did Not Violate Title VII or the ADA

In Zarn v. Minn. Dep't of Hum. Servs., __ F.4th __ (8th Cir. Feb. 2, 2026), the Eighth Circuit assessed whether the employer’s Covid-19 vaccination and testing requirement policies violated Title VII and the ADA. The policies required that employees who did not exclusively telework provide proof of Covid-19 vaccinations or take weekly Covid-19 tests and also provided up to seven days of paid leave for employees who were vaccinated against Covid-19 but tested positive for the virus. The plaintiff complained about the policies to his supervisor, his union president, and the employer’s administrators on moral and other grounds, but never requested a religious accommodation.

The plaintiff filed suit in federal court alleging the employer’s failure to accommodate his religious beliefs violated Title VII, and that the testing policy violated the ADA because it was neither job-related nor consistent with business necessity. The district court granted summary judgment for the employer on both claims and the plaintiff appealed to the Eighth Circuit. The Eighth Circuit agreed with the district court that the plaintiff did not establish a prima facie case of failure to accommodate his religious beliefs under Title VII as he never informed the employer of his religious conflict with the Covid-19 policies nor did he experience an adverse employment action.

Perhaps most significantly, the Eighth Circuit further held that the Covid-19 testing policy did not violate the ADA. Examining the prohibition against discrimination applicable to medical examinations and inquiries under ADA §12112(d)(1), the court stated that the ADA “generally prohibits employers from requiring current employees to undergo medical examinations or inquiries unless the employer can demonstrate they are ‘job-related and consistent with business necessity.’” In this case the court found the employer established that its testing policy was clearly consistent with business necessity. First, it had considered the level of community transmission and the number of people in the state who had died from Covid-19. Next, the policy applied only to those in the workplace and excluded employees who worked exclusively at home. And finally, it considered reports by the CDC that vaccination “is the most effective measure to prevent infection.” The Eighth Circuit also found the weekly Covid-19 testing requirement was job-related. The plaintiff in the case, who worked in a treatment center run by the state health department, was responsible for working directly with patients and keeping them safe. In addition, the court pointed out, “[f]ederal courts—including the District of Minnesota—have consistently held that subjecting employees to COVID-19 testing ‘does not amount to an unlawful medical examination’ under the ADA.” 

Seventh Circuit Holds Employers’ Covid-19 Testing Policies Did Not Violate Title VII

In a similar case, Bowlin v. Bd. of Dirs., __ F.4th __ (7th Cir. Feb. 13, 2026), the plaintiffs, who were school employees, claimed their schools’ requirement, based on a state mandate that employees who were not vaccinated against Covid-19 undergo weekly Covid-19 testing, discriminated against them based on their religious beliefs in violation of Title VII. The district court dismissed their claim that the testing requirement violated their “moral consciences,” and the plaintiffs appealed to the Seventh Circuit.

Assessing their claim, the Seventh Circuit stated that although “a ‘religious’ objection can sound in both religious and non-religious terms,” the plaintiffs in this case did not tie their objections to the testing requirement to any religious belief and failed to identify a religious belief or practice the testing would violate. The Seventh Circuit also rejected the plaintiffs’ assertion that the policy discriminated against employees based on health care choices made “pursuant to freedom of conscience.” The court held Title VII does not support a claim of differential treatment based on something other than religious belief. In addition, the court held allowing the plaintiffs to forego testing would require employers to violate the law, noting that “courts have upheld the dismissal of Title VII claims at the pleading stage when the requested accommodation requires the employer to violate the law.” Thus, the Seventh Circuit upheld the district court’s dismissal of the case.

Sixth Circuit Affirms Summary Judgment for the Employer in Title VII Sexual Harassment and Retaliation Case

The plaintiff in Hamm v. Pullman SST Inc., __ F.4th __ (6th Cir. Feb. 12, 2026) complained to the plant manager and HR that his co-workers repeatedly harassed him using homophobic slurs after learning he was bisexual. Although HR could not corroborate the plaintiff’s complaints, the HR manager allowed him repeated extended medical leaves and offered him positions at different worksites, each of which he declined for various reasons. When the plaintiff contacted HR to say he was cleared to return to work, the HR manager told him the company considered his refusal to accept the positions offered as a “voluntary resignation.” The plaintiff filed suit in federal court under Title VII claiming that the alleged abuse created a hostile work environment and that he was terminated in retaliation for his sexual harassment complaint. The district court granted summary judgment to the employer and the plaintiff appealed to the Sixth Circuit.

The Sixth Circuit acknowledged that the Supreme Court has ruled that discrimination based on sexual orientation or transgender status is discrimination “because of sex” in violation of Title VII. In this case, however, the Sixth Circuit found the plaintiff failed to offer a basis for holding the employer liable for the alleged hostile work environment. To establish employer liability for co-worker harassment, the plaintiff must show that the employer “knew or should have known” of the sexual harassment and failed to take “prompt and appropriate corrective action” after learning of the harassment. Here, the Sixth Circuit found that the employer took appropriate action by, among other things, issuing a warning to the plaintiff’s supervisor for using inappropriate language, requiring supervisors to attend additional in-person anti-harassment training, and requiring employees to review and re-sign the company’s anti-harassment policy. In addition, the employer offered to transfer the plaintiff to a different worksite.

As to the plaintiff’s Title VII retaliation claim, the Sixth Circuit found that the plaintiff’s rejection of every alternative job offered to him was a legitimate, nondiscriminatory reason for terminating his employment. The burden then shifted to the plaintiff to establish that the employer’s reason for termination was a pretext, and that his sexual harassment complaint was the real reason for his termination. In an effort to do so, the plaintiff argued that although he raised issues with the jobs offered, he never actually said “no” to any of them. Ultimately, the Sixth Circuit concluded that it need not determine whether the plaintiff formally denied the positions offered, stating: “When an employee claims that an employer’s reason for an adverse action had no basis in fact, the employer does not need to prove that reason in court … It just needs to prove that it held an ‘honest belief’ that the reason was true.” In this case, the court found the employer had an “honest belief” that the plaintiff declined the jobs offered to him.

Fourth Circuit Vacates Preliminary Injunction Against Elements of DEI Executive Orders 

On February 6, 2026, in Nat'l Ass'n of Diversity Officer s in Higher Educ. v. Trump, __ F.4th __ (4th Cir. Feb. 6, 2026), the Fourth Circuit rejected arguments that provisions in certain executive orders terminating grants to agencies that have diversity, equity, and inclusion (DEI) initiatives or programs, and requiring agencies, including those not federally funded, to certify that they do not “operate any programs promoting DEI” violated the First and Fifth Amendments on their face. After determining the plaintiffs had standing to challenge the orders, the Fourth Circuit turned to the merits of the claims.

As to the Fifth Amendment challenge regarding the funding provision, the Fourth Circuit stated: “The President may determine his policy priorities and instruct his agents to make funding decisions based on them … and so has directed his subordinates to terminate funding that supports equity-related projects to the maximum extent allowed by law. Whether that’s sound policy or not isn’t our call. We ask only whether the policy is unconstitutionally vague for funding recipients.” Assessing the challenged provision, the court ultimately concluded that it was not unconstitutionally vague.

The Fourth Circuit also rejected plaintiff’s claim that the certification requirement impermissibly restricts their ability to engage in protected speech holding that “plaintiffs have no protectable speech interest in operating, and ‘no constitutional right to operate DEI programs that violate federal antidiscrimination law.’” Although the certification provision “suggests” all DEI programs are illegal under existing antidiscrimination law, the court stated, the provision does not say that. Click here for a further analysis of this decision.

Ninth Circuit Issues Stay of District Court Order Vacating TPS Status for Nepal, Honduras and Nicaragua

On February 9, 2026, in Nat'l TPS All. v. Noem, No. 26-199 (9th Cir. Feb. 9, 2026), the Ninth Circuit issued a stay of the district court’s order vacating Department of Homeland Security (DHS) Secretary Kristi Noem’s termination of Temporary Protected Status (TPS) for immigrants from Nepal, Honduras, and Nicaragua. TPS provides eligibility for work authorization and protection from removal. Although in a January 28, 2026 decision the Ninth Circuit had determined DHS Secretary Noem had overstepped her authority by vacating Protected Status TPS designation for Venezuela, the Ninth Circuit distinguished that decision stating “that case involved the vacatur of a TPS designation,” which was subject to judicial review. “This case, by contrast, involves a termination of TPS, an action expressly authorized by statute … At this preliminary stage, we conclude that the government has shown a likelihood of prevailing in its argument that the Secretary’s action is unreviewable because it is a ‘determination … with respect to the … termination … of a designation[] of a foreign state.’”  (Emphasis in original.)