Labor & Employment Law Daily Wrap Up, RETALIATION—6th Cir.: Fired State Farm claims adjuster can proceed to trial on vicarious liability theory based on supervisor’s bias, (Nov 21, 2025)

By Kathleen Kapusta, J.D.

The court majority echoed “Staub’s holding that a subsequent investigation that does nothing more than confirm a supervisor’s true-but-selective report is by itself insufficient to break the chain of proximate causation.”

In an amended opinion again reversing summary judgment against the ADA retaliation claim of a State Farm claims specialist who alleged she was singled out and fired for conduct widespread in the office—timecard manipulation—because she helped her colleague advocate for an accommodation, a divided Sixth Circuit again found sufficient evidence to show a supervisor’s stated reason for reporting her was pretextual and she raised a genuine dispute over his motives, as required for her cat’s paw claim. Stressing that its decision “does not impose a bright-line rule that a supervisor’s true-but-selective report will always be the proximate cause of any subsequent adverse employment action,” the court explained that “an employer will not be liable if its investigation uncovers a superseding ‘cause of independent origin that was not foreseeable’ from the supervisor’s biased action.” Judge Readler, adding an addendum to his original dissent, argued that the majority not only “rewrote” the employee’s briefing by greatly expanding the cat’s paw issue, it “applied circuit law in an incorrect way to reach an incorrect decision” ( Gray v. State Farm Mutual Automobile Insurance Co. , No. 24-3086 (6th Cir. Nov. 20, 2025)).

Assisted colleague. The employee’s colleague, who worked on a different team with a different supervisor, had an ADA accommodation that exempted her from working overtime. When the colleague’s supervisor told her in August 2017 that State Farm would no longer accommodate her, the employee researched ADA law and company policies, talked to HR, filed a complaint against the supervisor, and advised her colleague to contact an attorney and file an EEOC charge, which she did. The colleague was ultimately allowed to transition to a new team.

Timecard discrepancies. In November, the employee’s supervisor went on vacation and her colleague’s supervisor filled in. Although the employee’s supervisor never monitored his employees’ timecards, the colleague’s supervisor examined the employee’s, noticed several instances in which she reported time while she was logged off her computer, and raised the issue with his direct supervisor and then with HR.

Termination. After an investigation revealed more timecard discrepancies, including that she reported returning from lunch before she had re-entered the building, the employee argued she was being targeted for helping her colleague secure an accommodation. Not long thereafter, she was fired for falsifying her timesheets. She sued for retaliation in violation of the ADA and state law and the district court, granting summary judgment to State Farm, found it had an honest belief the employee had falsified her time.

The Sixth Circuit, in its July 25, 2025, decision, reversed summary judgment and held that the employee could proceed on a theory of vicarious liability based on the supervisor’s alleged bias. In its amended opinion, after briefing at the panel rehearing stage, the court majority, addressing the employee’s attempt to hold State Farm vicariously liable for the supervisor’s actions, found she engaged in protected activity by helping her colleague with her ADA accommodation.

Causation. As to causation, the court noted that the employee’s supervisor never scrutinized her timesheets but after she assisted her colleague, her time entries were closely reviewed by her colleague’s supervisor, which resulted in an investigation that led to her discharge. There was also evidence the colleague’s supervisor did not scrutinize other employees on the employee’s same team in the same manner.

Further, the scrutiny not only occurred soon after the employee’s protected activity, the colleague’s supervisor’s first opportunity to retaliate against the employee came when he filled in for her supervisor. He then reviewed her timesheets and immediately reported her to HR without consulting her supervisor. That timing by itself, said the court, showed prima facie causation between the employee’s protected activity and the supervisor’s actions.

Pretext. While State Farm argued that the supervisor’s decision to report the employee was based solely on her timekeeping violations, not on retaliatory animus, the employee argued that even if she overstated her time, others did the same thing but were not reported or disciplined. Agreeing that the employee presented sufficient evidence of differential scrutiny to raise a fact dispute over the supervisor’s motives, the court noted the employee’s coworker had almost identical discrepancies in her time records, of which the supervisor was aware when he reported the employee. He claimed, however, that he considered the employee’s actions as an “integrity” issue while the coworker’s conduct was a “performance” issue for which informal coaching was sufficient.

As to State Farm’s assertion the supervisor reported the employee because, unlike her coworker, she claimed to be working when she was not in the building, her alleged physical absences surfaced only after the supervisor reported her. Moreover, said the court, State Farm treats both inaccurately reporting time and falsifying a timesheet as policy violations without distinguishing between their severity. Noting that State Farm identified no other reason that could justify the supervisor’s unique scrutiny of the employe, the court found she had sufficient evidence of pretext.

Selective reporting. And while he did not participate in the termination decision, the employee produced sufficient evidence to show he proximately caused her termination including that he falsely claimed she had been previously coached for taking long lunches and suggested she likely misreported time on more than the three occasions that he discovered. Though State Farm argued that he honestly believed in the truth of his allegations, a supervisor, said the court, can cause an employee’s termination by reporting true yet selective information.

Though State Farm argued it could not be liable because it independently confirmed the supervisor’s allegations, the court explained that “when a supervisor reports true but selective information, an investigation will always confirm the supervisor’s allegations.” Here, the employee claimed the supervisor selectively reported her to HR and that his report led State Farm to investigate and terminate her. Further, she alerted State Farm to potential retaliation, but State Farm failed to take her allegation seriously. From these facts, the court stated, “a jury could conclude that State Farm acted as a quintessential ‘conduit’ of the employee’s bias. Even under a narrower view of vicarious liability, a jury could conclude that by ignoring [the employee’s] allegation, State Farm effectively ‘delegated part of [its] decisionmaking power’ to the supervisor.

No bright-line rule. Stating that it was not imposing a bright-line rule that a supervisor’s true-but-selective report will always be the proximate cause of any subsequent adverse employment action, the court explained that it was simply echoing “Staub’s holding that a subsequent investigation that does nothing more than confirm a supervisor’s true-but-selective report is by itself insufficient to break the chain of proximate causation.” Rather, an employer can negate causation by showing its investigation resulted in an adverse action for reasons unrelated to the supervisor’s original biased action.

Pointing to the undisputed record here, the court noted that the supervisor reported the employee for “manually changing” her time entries and identified three discrepancies as proof. HR’s investigation then revealed that additional discrepancies including instances where the employee reported working while she was not in the building. According to State Farm, it fired the employee based on these additional discrepancies. Explaining that the issue on summary judgment is whether her termination based on those additional discrepancies was so “unrelated” to the supervisor’s original report and so “not foreseeable” by him that no reasonable factfinder could find proximate causation, the court held that this question could not be answered as a matter of law. Given that the supervisor’s report and the employee’s termination both related to her timekeeping entries, a reasonable jury, the court stated, could find that the report improperly influenced and was the proximate cause of the employee’s termination.

Romans. Moreover, said the court, its 2012 decision in Romans v. Michigan Dep’t of Hum. Services, upon which the dissent relied, does not stand for the proposition that an independent investigation always breaks the chain of causation. Rather, it “falls comfortably within the scenario delineated in Staub where an independent investigation ‘results in an adverse action for reasons unrelated to the supervisor’s original biased action.’”

While State Farm argued that the additional discrepancies identified by HR were a distinct cause of the employee’s termination because they occurred when she was out of the building, indicating an “integrity” issue as opposed to a “performance” issue, “whether that distinction is sufficient to break the chain of proximate causation is a question for the jury,” said the court, reversing summary judgment on the employee’s retaliation clam.

Dissent. In an addendum to his original dissent, Judge Readler argued that “the theory of the case crafted by the majority opinion, in my view, completely rewrote [the employee’s] briefing by expanding the cat’s paw issue from an afterthought rebuttal point to the purported central premise of [her] affirmative claim against State Farm.” Noting that neither party originally brought Romans to the court’s attention, Judge Readler asserted that “had the cat’s paw issue been briefed as a core premise of [the employee’s] case, one (if not both) of the parties would surely have brought Romans to our attention.” And pursuant to that case, he wrote, “An employer is absolved of liability for disciplining an employee if the employer, upon conducting an investigation independent of the initial biased tip, discovers additional evidence supporting the adverse action.

Further, he argued, although it was now on notice of Romans, the amended majority opinion incorrectly applied it. “Instead of honoring Romans, the amended majority opinion sends this case to a jury. That is necessary, the amended majority opinion now explains, in light of Staub’s ‘foreseeability’ element, a term never used in the original majority opinion.” “The amended majority opinion’s foreseeability test,” he continued, “manipulates Supreme Court precedent and entirely ignores our own.”

Accordingly, Judge Readler would have affirmed summary judgment against the employee’s claim.

The case is No. 24-3086.

Judge: Bloomekatz, R.

Companies: State Farm Mutual Automobile Insurance Company

Attorneys: Laren E. Knoll (The Knoll Law Firm) for Monica Gray. Jeffrey S. Hiller (Littler Mendelson) for State Farm Mutual Automobile Insurance Co. and Joe Kyle.

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