Labor & Employment Law Daily Wrap Up, WORTH NOTING—Federal appeals court cases of note, (Aug 28, 2026)

By WK Editorial Staff

A roundup of recent federal appeals court decisions of interest to the labor and employment law community.

2d Cir.: NY AG subpoenas quashed over acting U.S. attorney appointment dispute. The Second Circuit held that former Interim U.S. Attorney John A. Sarcone III lacked authority to issue grand jury subpoenas seeking records from the New York attorney general’s office concerning its investigations of the National Rifle Association and President Donald Trump. The court ruled that Sarcone did not lawfully become acting U.S. attorney under the Federal Vacancies Reform Act after being appointed first assistant following the vacancy and that DOJ could not use a broad delegation of authority to bypass the statute’s requirements. The panel affirmed orders quashing the subpoenas and disqualifying Sarcone from further involvement in the investigations (In re Grand Jury Subpoenas to the Office of the New York State Attorney General, No. 26-156 (2d Cir. Aug. 21, 2026)).

6th Cir.: Judge not entitled to immunity over “Scared Straight” courtroom incident. A Michigan judge was not entitled to judicial immunity at the motion-to-dismiss stage of a lawsuit alleging he ordered a 15-year-old student handcuffed, placed in a jail jumpsuit, confined in a holding cell, and subjected to a livestreamed “mock trial” after she fell asleep during a courtroom career program, the Sixth Circuit held. The panel concluded that the complaint plausibly alleged Judge King was engaged in nonjudicial conduct motivated by personal offense rather than actions normally performed by a judge, allowing the student’s federal civil rights and state-law claims to proceed (Till v. King, Nos. 25-1558, 25-1614 (6th Cir. Aug. 21, 2026)).

8th Cir.: Lockton wins key dispute over forum-selection clauses and producer restrictive covenants. Former Lockton producer-members Eric Kaufman and Sallie Giblin were bound by Missouri choice-of-law and forum-selection provisions requiring disputes over their memberships to be litigated in Missouri, the Eighth Circuit held. The court also upheld customer non-solicitation covenants as narrowed to clients with whom the producers had actually worked, concluding the restrictions reasonably protected Lockton’s customer relationships and goodwill. Reversing in part, the panel held the producers breached operating-agreement provisions requiring 30 days’ notice before terminating their membership interests and breached fiduciary duties by immediately joining competitor Alliant. The court further ruled that Lockton may seek recovery of attorneys’ fees incurred defending related California lawsuits as damages for breaches of the forum-selection clauses and remanded for a determination of those damages (West Series of Lockton Companies, LLC v. Kaufman, Nos. 24-1072, 25-1278, 25-1369, and West Series of Lockton Companies, LLC v. Giblin, Nos. 24-1074, 24-3528, 25-1019 (8th Cir. Aug. 26, 2026)).

9th Cir.: Federal grant conditions largely enjoined as exceeding agency authority. Thirty-one cities, counties, and local government agencies were likely to succeed in their challenge to Trump administration-imposed conditions on previously awarded HUD and DOT grants, the Ninth Circuit held in largely affirming a preliminary injunction. The court found that conditions requiring broad anti-discrimination certifications, acknowledgments regarding False Claims Act materiality, restrictions related to “gender ideology,” abortion, and immigration, and immigration-status verification requirements largely exceeded authority granted by Congress. The panel concluded that agencies may require compliance with federal anti-discrimination laws only as to federally funded programs, and it remanded for the injunction to be narrowed accordingly while otherwise leaving the injunction in place (County of King v. Turner, No. 25-3664 (9th Cir. Aug. 25, 2026)).

11th Cir.: New trial ordered in cruise ship sexual assault case. The Eleventh Circuit ordered a new trial on a passenger’s false-imprisonment and sexual-assault claims against Carnival arising from an alleged assault by a crewmember aboard a cruise ship. Before trial, the district court entered summary judgment for the passenger on false imprisonment, finding no factual dispute that she had been detained against her will. The appeals court held that the district court improperly excluded portions of FBI investigative reports reflecting an agent’s conclusion that the encounter was consensual, evidence that could have created a genuine dispute of material fact. Because that ruling affected both the false-imprisonment claim and the jury’s consideration of consent on the sexual-assault claim, the court vacated the related judgment and remanded for a new trial, while leaving intact defense verdicts on separate negligence and emotional-distress claims (Doe v. Carnival Corp., No. 24-13159 (11th Cir. Aug. 25, 2026)).

D.C. Cir.: Project Veritas defeats fraud and wiretapping verdict arising from undercover infiltration. The D.C. Circuit reversed a jury verdict against James O’Keefe, Project Veritas, and related defendants stemming from an undercover investigation of Democratic political consultants during the 2016 election cycle. Although a jury had awarded damages based on an intern’s fraudulent misrepresentations used to gain access to Democracy Partners and found liability under federal and D.C. wiretapping laws, the appeals court held that the damages award impermissibly punished defendants for the publication of a news story protected by the First Amendment. The court also found insufficient evidence that the undercover intern owed a fiduciary duty to Democracy Partners, defeating the predicate tort theory underlying the wiretapping claims. The judgment was reversed in full (Democracy Partners, LLC v. O’Keefe, No. 25-7080 (D.C. Cir. Aug. 21, 2026)).

D.C. Cir.: Challenge to OMB funding-freeze memo likely moot after rescission. The D.C. Circuit vacated a preliminary injunction against a January 2025 Office of Management and Budget memorandum that temporarily paused certain federal grants, loans, and financial assistance programs. The court concluded that the challenge was likely moot because OMB rescinded the memorandum two days after issuing it and had since disavowed any intent to impose the type of government-wide funding freeze alleged by the plaintiffs. The panel did not address the legality of the memorandum itself, instead holding that no live controversy likely remained after the policy’s withdrawal (National Council of Nonprofits v. Office of Management and Budget, No. 25-5148 (D.C. Cir. Aug. 21, 2026)).

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