Sixth Circuit Revives State Farm ADA Retaliation Suit Over Selective Timecard Scrutiny
Cincinnati, OH – November 24, 2025 – In a ruling underscoring the perils of inconsistent policy enforcement in retaliation claims, the U.S. Court of Appeals for the Sixth Circuit on November 20, 2025, reopened a former State Farm employee’s Americans with Disabilities Act (ADA) lawsuit, rejecting the insurer’s “honest belief” defense and remanding the case for trial. The decision in Gray v. State Farm Mutual Automobile Insurance Co. (No. 24-3086) highlights how “cat’s paw” liability—where a biased subordinate influences an adverse action—can undermine even well-documented investigations, sending a clear warning to HR leaders about probing for retaliatory motives.
The amended opinion, building on an initial July 25 reversal of summary judgment, found genuine disputes over whether supervisor bias led to selective timecard audits and Gray’s termination. A three-judge panel, led by Judge Alice M. Batchelder, emphasized that employers cannot rubber-stamp reports from potentially prejudiced sources without scrutinizing differential treatment.
Case Background: From Accommodation Aid to Termination
Monica Gray, a 15-year claims specialist in State Farm’s Cincinnati office, was fired in 2022 for alleged timecard falsification shortly after assisting colleague Sonya Mauter with an ADA accommodation request for anxiety-related needs.
- The Protected Activity: In early 2022, Mauter sought flexible hours and remote work options. Gray, as a team peer, provided supporting documentation and advocated during internal discussions, which management approved. Gray later testified that supervisor Michael Kyle expressed frustration over the accommodation’s impact on team workflows.
- The Retaliatory Spark: While Gray’s direct manager was on vacation, Kyle—a substitute overseer—reviewed her timecards for the prior six months. He flagged discrepancies between logged hours and computer login data, reporting them to HR and upper management without auditing peers. Gray was interviewed, denied intent to falsify, and alleged targeting tied to her Mauter support. She questioned if other employees’ records were checked—HR confirmed none were.
- Termination and EEOC Charge: Days after the interview and Gray’s EEOC retaliation filing, State Farm terminated her, citing policy violations. No investigation followed her bias claim.
Gray sued in the U.S. District Court for the Southern District of Ohio under the ADA and Ohio law, alleging retaliation. The district court granted summary judgment to State Farm, accepting the company’s “honest belief” in her misconduct based on the audit findings.
Sixth Circuit’s Key Holdings: Pretext and Vicarious Liability
Reviewing de novo, the Sixth Circuit reversed, holding Gray established a prima facie retaliation case: protected activity (aiding Mauter’s accommodation), State Farm’s knowledge, adverse action (firing), and temporal proximity (termination within weeks). It further found triable issues on pretext, rejecting State Farm’s defense on two fronts.
| Issue | Sixth Circuit Finding | Key Evidence Cited |
|---|---|---|
| Selective Enforcement | Genuine dispute; Gray was sole audit target despite common issues. | Coworker Diane Parker had identical discrepancies (e.g., unpunched lunches) but received informal coaching, not HR escalation. |
| Retaliatory Timing/Motive | Kyle used “first opportunity” (manager’s vacation) to scrutinize Gray post-accommodation. | Audit occurred amid Kyle’s documented workflow complaints; no similar reviews for others. |
| Cat’s Paw Liability | Viable theory; biased report can taint “honest” investigations. | Even if HR acted in good faith, Kyle’s selective flagging (without full context) influenced the outcome, per Amunrud v. Bd. of Trs. precedents. |
| Honest Belief Defense | Inadequate; employer must show unbiased probe beyond confirming biased input. | District court erred by crediting State Farm’s rationale without weighing differential treatment or Kyle’s potential animus. |
The panel invoked Burlington Northern & Santa Fe Ry. Co. v. White (2006) to broaden “adverse action” scope and stressed that “truthful” reports don’t immunize if motivated by retaliation. Dissenting in part, Judge John K. Bush argued the evidence fell short of pretext but concurred on vicarious liability.
Implications for Employers: Beyond Documentation
This “reopening” via amended opinion—following the July reversal—amplifies risks in accommodation-related disputes. Experts warn:
- Audit Consistency: Random or team-wide reviews mitigate “selective” claims; targeting post-protected activity invites scrutiny.
- Bias Checks: HR must investigate reporter motives and compare treatment, not just verify facts.
- Insurance Sector Ripple: With rising ADA filings (up 12% in 2025 per EEOC), firms like State Farm face pressure to train on “cat’s paw” pitfalls.
State Farm declined comment, citing ongoing litigation. Gray’s counsel hailed the ruling as “vindication for whistleblowers.” Trial is set for mid-2026 in Cincinnati.
The full opinion is available on Justia and PACER. As one HR analyst noted on LinkedIn: “This isn’t just about timecards—it’s a masterclass in spotting retaliatory pretext before it costs you.”