6th Circuit Sends ADA Lawsuit Against State Farm to Jury Trial

Takeaway: Employees may be able to defeat summary judgment on retaliation claims despite an employer's reliance on legitimate, nondiscriminatory reasons for termination. In the context of employee misconduct or company policy violations reported to HR or decision-makers by a supervisor, companies should ensure that subsequent investigations are independent and outcomes are consistent with past practice and prior discipline for similar violations.

A panel of judges for the 6th U.S. Circuit Court of Appeals reversed a district court decision granting summary judgment to State Farm Mutual Automobile Insurance Co. on claims of federal and state law retaliation brought by a former longtime State Farm employee. The employee had helped a colleague secure an accommodation under the Americans with Disabilities Act (ADA), and the colleague's supervisor opposed the accommodation.  

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A few months later, while temporarily supervising the employee's team, the colleague's supervisor reported the employee to HR for time card falsification, which led to the employee’s termination after further investigation.  

The employee sued State Farm for retaliation under the ADA and Ohio law, alleging the supervisor had singled her out for conduct that was common among employees on her team because the employee had helped her colleague advocate for and seek the ADA accommodation. The district court granted summary judgment to State Farm based on its "honest belief" in the employee's misconduct and the employee's failure to show the required pretext. 

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The 6th Circuit analyzed the employee's retaliation claims, which were based on indirect evidence of retaliation, under both direct and vicarious theories of liability against State Farm, explaining that an employer may be directly liable for the unlawful motives of its decision-makers in the discrimination context. 

The court quickly disposed of a direct liability theory based on several instances where the employee's time sheet did not match her computer activity, as uncovered by State Farm's investigation. According to the 6th Circuit, the employee also failed to produce evidence of other employees who, like her, reported working when they were out of the building. The employee thus failed to call into question State Farm's stated reason for firing her and could not prove her direct liability theory of retaliation.  

The 6th Circuit then turned considerable attention to the employee’s theory of vicarious liability — known as "cat's paw" liability — which hinges on a neutral decision-maker acting on a biased subordinate's input. 

Here, the court found that the employee: 1) unquestionably engaged in protected activity and that State Farm had knowledge of it; and 2) demonstrated causation through evidence of increased employer scrutiny of her time records only after she helped her colleague advocate for an accommodation. 

In analyzing pretext, the 6th Circuit found that the supervisor "could have" used the employee's alleged timekeeping infractions as a legal, legitimate reason to cover up his true retaliatory motives. The employee argued that even if she had overstated her time, others had done the same thing but were not reported or disciplined. The court agreed that courts uphold retaliation claims when the plaintiff was singled out for adverse treatment.  

The employee pointed to another colleague on her team whose time records showed similar discrepancies, but whom the supervisor did not treat the same way, despite his knowledge of the similar discrepancies. The 6th Circuit found that the heightened scrutiny came only after the employee engaged in protected activity and was unrelated to prior performance issues.

In finding State Farm vicariously liable for the supervisor's actions, the court agreed that his motives were imputed to the actual decision-makers who terminated the employee. The court held that an employer remains liable even if it relied only in part on a supervisor's biased report, escaping liability only if the supervisor's influence was "too remote, purely contingent, or indirect."

According to the court, the employee showed that the supervisor caused her termination by reporting true yet selective information, holding that a subsequent "investigation will always confirm the supervisor's allegation."

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In reversing the district court's grant of summary judgment for State Farm, the 6th Circuit opined that the employee presented sufficient evidence that: 1) the supervisor selectively reported her to HR; 2) the report led State Farm to investigate and terminate her; and 3) she alerted State Farm to potential retaliation, but State Farm failed to take her allegation seriously. 

The court also disagreed with State Farm's argument that the supervisor's report was not a "but-for cause" of the employee's discharge, as required by the ADA. It found that State Farm's proffered reason for firing the employee resulted from the supervisor's alleged retaliation and that a jury could conclude that State Farm would not have investigated and later fired the employee had the supervisor not reported her.

Gray v. State Farm Mutual Auto. Ins. Co., 6th Cir., No. 24-3086 (July 25, 2025).

Gregory S. Slotnick is an attorney in the New York City office of Duane Morris LLP.