Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

A former employee of a bank holding company, who participated in a company-sponsored retirement savings plan, brought suit alleging that the bank, the plan’s administrative committee, and a subsidiary breached their fiduciary duties under ERISA, resulting in financial loss to his plan distribution. After the employee’s separation and payout, the company amended the plan in early 2024 to add a retroactive arbitration clause that required all claims to proceed individually in arbitration, barred class or representative actions, and included a jury trial waiver and a provision that only individual relief could be awarded.The United States District Court for the Western District of Texas denied the defendants’ motion to compel arbitration, holding that the arbitration agreement was not valid under Texas law due to lack of consideration. The company appealed, arguing that the plan’s consent, not the individual participant’s, was sufficient to bind parties to arbitration for claims brought on behalf of the plan under 29 U.S.C. § 1132(a)(2), and that the arbitration clause was enforceable. The company also preemptively addressed potential objections under the effective vindication doctrine and claims that the arbitration provisions unlawfully limited statutory remedies.The United States Court of Appeals for the Fifth Circuit reversed the denial of arbitration as to the § 1132(a)(2) claim, holding that the plan’s consent through its unilateral amendment provision was sufficient to bind the participant to arbitration for plan-based claims, but affirmed the denial as to the participant’s individual claims because he had not consented. The court further held that the arbitration clause’s prohibition on representative actions and its limitation to individual relief violated the effective vindication doctrine, and voided the standard-of-review provision to the extent it applied to fiduciary-breach claims. The case was remanded for the district court to determine whether the offending arbitration provisions could be severed. View "Parrott v. International Bank" on Justia Law

The plaintiff worked as an Agency Manager for a group of insurance companies collectively known as Texas Farm Bureau. In this role, he supervised a team of insurance agents and was classified as an independent contractor. He determined his own work schedule, was not required to report his hours, and was paid through commissions rather than a salary or hourly wage. From 2016 to 2018, his earnings ranged from $552,000 to $627,000 per year. The plaintiff filed suit, claiming he was misclassified and seeking unpaid overtime under the Fair Labor Standards Act, arguing he should have been treated as an employee.The United States District Court for the Western District of Texas ruled at summary judgment that the plaintiff should have been classified as an employee and was owed at least 816 hours of overtime. The only issue left for trial was whether the employer knew or should have known about the plaintiff’s overtime work. A jury found that the employer neither had actual nor constructive knowledge of any overtime. The plaintiff’s motions for judgment as a matter of law and for a new trial were denied by the district court.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of these motions. The appellate court held that an employee seeking overtime pay must prove the employer had actual or constructive knowledge of the overtime work. The court found that allowing an employee to set his own hours does not, by itself, establish employer knowledge of overtime. The lack of a timekeeping system did not constitute constructive knowledge, nor did it shift the burden of proof to the employer. The appellate court also held that the district court’s jury instruction, which required the employee to notify the employer of overtime, was proper. The Fifth Circuit affirmed the district court’s rulings. View "Merritt v. Texas Farm Bureau" on Justia Law

Harvard Maintenance, a janitorial contractor in New York City, employed Carina Cruz as a cleaner. Cruz raised several complaints alleging violations of the collective bargaining agreement, including assignment of certain cleaning tasks and concerns about working conditions. In response to her complaints, Cruz faced threats from supervisors, was suspended following workplace disputes, and ultimately terminated in June 2020. Cruz filed a complaint with the National Labor Relations Board (NLRB), claiming her suspension and termination were unlawful reprisals for protected union activity.An administrative law judge (ALJ) for the NLRB found that Harvard Maintenance unlawfully threatened, suspended, and fired Cruz in violation of the National Labor Relations Act (NLRA) and ordered remedies including backpay, reimbursement for job search expenses, and compensation for “direct or foreseeable pecuniary harms.” The NLRB adopted the ALJ’s findings and order. Harvard Maintenance petitioned for review with the United States Court of Appeals for the Fifth Circuit, challenging the findings of coercive statements, unlawful discharge, and the scope of the awarded remedies.The United States Court of Appeals for the Fifth Circuit reviewed the case and held that the NLRB’s findings regarding coercive statements and unlawful discharge were supported by substantial evidence and affirmed those parts of the Board’s order. However, the Fifth Circuit concluded that the award of consequential damages for “direct or foreseeable pecuniary harms” exceeded the NLRB’s statutory authority under the NLRA, which permits only equitable remedies. Therefore, the court denied Harvard Maintenance’s petition for review as to the findings of unlawful conduct, but granted relief and vacated the portion of the order awarding consequential damages. The Board’s application for enforcement was granted except as to the consequential damages remedy. View "Harvard Maintenance v. National Labor Relations Board" on Justia Law

Ayodeji Awe, a former chaplain at Harris Health System (HHS), alleged that he and other minority chaplains were underpaid during his tenure. After leaving HHS in 2020, Awe reapplied for a chaplain position in 2021 but was not rehired; HHS instead selected three other candidates. Awe believed the failure to rehire him was due to age discrimination and retaliation for his prior complaints about workplace issues, including underpayment of minority chaplains.Following receipt of a right-to-sue letter from the Equal Employment Opportunity Commission in June 2022, Awe filed suit in the United States District Court for the Southern District of Texas, asserting claims under the Age Discrimination in Employment Act (ADEA) and Title VII of the Civil Rights Act. The district court granted summary judgment for HHS on all claims, finding that Awe did not rebut HHS’s nondiscriminatory reasons for its hiring decisions. Specifically, the district court ruled that Awe failed to make a prima facie case on his ADEA claims and did not present sufficient evidence of pretext for his Title VII retaliation claim.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the summary judgment de novo and affirmed. The Fifth Circuit held that Awe did not establish a prima facie case of age discrimination, as one of the hired candidates was older than Awe, and another only five years younger. For ADEA retaliation, the court found Awe did not show his complaints were age-related. Although Awe established a prima facie Title VII retaliation claim, he failed to show that HHS’s stated preference for internal candidates was pretextual, nor that he was clearly better qualified than those hired. The Fifth Circuit affirmed the district court’s judgment. View "Awe v. Harris Health" on Justia Law

Aramark, a company that self-funds employee health benefit plans governed by ERISA, contracted with Aetna to serve as third-party administrator for these plans. Under the agreement, Aetna was responsible for processing claims, managing provider networks, and handling various administrative tasks. Aramark alleged that Aetna breached its fiduciary duties by paying improper or fraudulent claims, retaining undisclosed fees, providing inadequate subrogation services, making post-adjudication adjustments detrimental to Aramark, and commingling plan assets.Aramark filed suit in the United States District Court for the Eastern District of Texas, asserting ERISA claims for breach of fiduciary duty and prohibited transactions. Aetna responded by seeking to compel arbitration in a Connecticut federal district court, relying on the arbitration clause in the parties’ Master Services Agreement (MSA), and moved to stay the Texas proceedings pending arbitration. The district court denied the stay, holding that the parties had not “clearly and unmistakably” delegated the threshold question of arbitrability to an arbitrator. The court found that the MSA's arbitration clause carved out disputes seeking equitable relief—such as Aramark’s ERISA claims—from arbitration and that these claims were equitable in nature.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of a motion to stay litigation pending arbitration de novo. It held that the threshold issue of arbitrability was not clearly and unmistakably delegated to an arbitrator under the terms of the MSA, especially given the placement of the carve-out for equitable relief. The Fifth Circuit further held that Aramark’s ERISA claims constituted equitable, not legal, relief under Supreme Court and Fifth Circuit precedent. The Fifth Circuit affirmed the district court’s orders, finding no error or abuse of discretion. View "Aramark Services v. Aetna Life Insurance" on Justia Law

A former professional football player sought disability benefits from a retirement plan administered under the Employee Retirement Income Security Act (ERISA), arguing that he qualified for the highest tier of benefits due to multiple concussions suffered during his career. The plan granted him some benefits but denied the top category. He filed suit, claiming improper denial of benefits and lack of a full and fair review.The United States District Court for the Northern District of Texas ruled in favor of the plaintiff, ordering the plan to award the higher benefits and granting approximately $1.2 million in attorney’s fees, plus $600,000 in conditional fees. On appeal, however, a panel of the United States Court of Appeals for the Fifth Circuit reversed the district court’s judgment, holding that the plaintiff was not entitled to reclassification to the highest benefits tier due to his failure to immediately appeal the denial, making any further review futile. The panel remanded for entry of judgment for the plan.On remand, the district court nonetheless reaffirmed its prior fee award, reasoning that the plaintiff’s success in exposing flaws in the plan’s review process, as reflected in favorable factual findings, constituted sufficient success to support attorney’s fees.The United States Court of Appeals for the Fifth Circuit, reviewing the fee award for abuse of discretion, reversed the district court’s decision. The Fifth Circuit held that under 29 U.S.C. § 1132(g)(1), attorney’s fees may only be awarded if a party achieves “some degree of success on the merits,” which requires more than favorable factual findings or moral victories. Because the plaintiff received no relief—monetary, injunctive, or declaratory—the award of attorney’s fees was improper. The court reversed the fee award. View "Cloud v. NFL Player Retirement Plan" on Justia Law

A female senior administrator at a Mississippi public university, who had served as Vice President and Chief of Staff since 2017, alleged that she was not hired for the position of university president on two occasions, in 2020 and 2023, despite her extensive qualifications and expressed interest. In 2020, following the resignation of the then-president, the university’s governing board appointed a less-experienced male interim president without conducting a search or soliciting applications, even though the plaintiff had managed university affairs in the president’s absence. After the interim president was placed on administrative leave in 2023, the board began a new search. The plaintiff applied but was denied an interview; instead, the board selected another male candidate with less experience, who had not applied for the position.The plaintiff filed suit against the board members in their individual capacities, alleging sex discrimination under the Equal Protection Clause via 42 U.S.C. § 1983, as well as Title VII claims. The United States District Court for the Southern District of Mississippi dismissed all claims against the individual board members except for the § 1983 equal protection claim regarding the 2023 hiring decision. The district court found that the plaintiff stated a prima facie case of sex discrimination and that the right to be free from such discrimination was clearly established, thus denying the defendants’ motion to dismiss based on qualified immunity.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the denial of qualified immunity de novo. The court held that the plaintiff adequately pleaded a violation of clearly established equal protection rights, including allegations that each defendant took individual actions causing the asserted harm. The Fifth Circuit therefore affirmed the district court’s denial of the motion to dismiss as to the § 1983 equal protection claim arising from the 2023 hiring decision. View "Jackson v. Duff" on Justia Law

Hiran Management, a small karaoke restaurant in Houston, Texas, employed eight front-of-house workers who became dissatisfied with their manager’s practices, including being assigned extra duties without increased pay and inconsistent compensation for “shift supervisor” roles. After a contentious meeting with management, the employees walked out, went on strike, and presented a list of demands. The employer subsequently terminated all eight striking employees.Following these terminations, the National Labor Relations Board (NLRB) filed an administrative complaint, alleging that Hiran Management violated section 8(a)(1) of the National Labor Relations Act (NLRA) by firing the employees for engaging in protected concerted activity. An administrative law judge (ALJ) ruled in favor of the NLRB, and the Board adopted the ALJ’s findings with minor adjustments. The Board ordered Hiran to cease its unfair labor practices, reinstate the employees, and compensate them for lost earnings and all other direct or foreseeable pecuniary harms resulting from the terminations.Hiran Management petitioned the United States Court of Appeals for the Fifth Circuit for review, while the NLRB sought enforcement of its order. The Fifth Circuit held that the NLRB lacks statutory authority under the NLRA to award full compensatory damages for all direct or foreseeable pecuniary harms, as such damages are legal rather than equitable remedies. The court granted Hiran’s petition in part, denied the NLRB’s enforcement petition in part, and remanded the case for further proceedings consistent with its opinion, limiting the NLRB’s remedial authority to equitable relief such as reinstatement and backpay. View "Hiran Management v. National Labor Relations Board" on Justia Law

Felicia Scroggins, a pro se plaintiff, brought claims against the City of Shreveport alleging race and sex discrimination, as well as retaliation, under Title VII. Her allegations included being incorrectly reprimanded for a safety incident, being compelled to undergo a fit-for-duty evaluation, and being disciplined for backing a fire engine into a fence. She also challenged the fairness of the bidding procedures for job assignments, claiming they were applied to her in a discriminatory manner.The United States District Court for the Western District of Louisiana reviewed the case. After Scroggins’s counsel withdrew, the district court granted her several extensions to find new counsel before ruling on the City’s motion for summary judgment. Ultimately, the district court granted summary judgment in favor of the City, finding that Scroggins failed to produce competent summary judgment evidence of pretext for her retaliation claims and that, although she established a prima facie case of discrimination, the City provided legitimate, nondiscriminatory reasons for its actions which she did not rebut.On appeal, the United States Court of Appeals for the Fifth Circuit considered Scroggins’s arguments that the district court erred by granting summary judgment before she could secure new counsel and by inadequately analyzing her claims under the McDonnell Douglas framework. The Fifth Circuit held that Scroggins forfeited her arguments by failing to cite relevant authority and failing to point to evidence in the record to support her claims. The court also found that the district court properly assumed adverse employment actions for purposes of the retaliation claims and correctly applied the McDonnell Douglas test to both discrimination and retaliation claims. The Fifth Circuit affirmed the district court’s grant of summary judgment in favor of the City. View "Scroggins v. City of Shreveport" on Justia Law

A flight attendant employed by an airline and represented by a labor union was terminated after sending graphic anti-abortion images and messages to the union president and posting similar content on social media. The employee, a pro-life Christian and vocal opponent of the union, had previously resigned her union membership but remained subject to union fees. The union’s leadership had participated in the Women’s March, which the employee viewed as union-sponsored support for abortion, prompting her messages. The airline investigated and concluded that while some content was offensive, only certain images violated company policy. The employee was terminated for violating social media, bullying, and harassment policies.Following termination, the employee filed a grievance, which the union represented. The airline offered reinstatement contingent on a last-chance agreement, which the employee declined, leading to arbitration. The arbitrator found just cause for termination. The employee then sued both the airline and the union in the United States District Court for the Northern District of Texas, alleging violations of Title VII and the Railway Labor Act (RLA), among other claims. The district court dismissed some claims, allowed others to proceed, and after a jury trial, found in favor of the employee on several Title VII and RLA claims. The court awarded reinstatement, backpay, and issued a broad permanent injunction against the airline and union, later holding the airline in contempt for its compliance with the judgment.On appeal, the United States Court of Appeals for the Fifth Circuit reversed the judgment for the employee on her belief-based Title VII and RLA retaliation claims against the airline, remanding with instructions to enter judgment for the airline on those claims. The court affirmed the judgment against the airline on practice-based Title VII claims and affirmed all claims against the union. The court vacated the permanent injunction and contempt sanction, remanding for further proceedings, and granted the employee’s motion to remand appellate attorney’s fees to the district court. View "Carter v. Transport Workers Union of America Local 556" on Justia Law