Employee Survival Guide®

S6 Ep 140 Lowering The Bar In Workplace Bias Cases

• Mark Carey • Season 6 • Episode 42

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This episode is part of my initiative to provide access to important court decisions  impacting employees in an easy to understand conversational format using AI.  The speakers in the episode are AI generated and frankly sound great to listen to.  Enjoy!

A single HR form can decide a lawsuit. We dig into Shear v. Sisters of Charity to show how a mandatory EAP referral and a required compliance-reporting form collided with the Supreme Court’s new “some harm” standard from Muldrow v. City of St. Louis—shifting what counts as an adverse employment action under the ADA and Title VII. The story tracks a familiar arc—productivity issues, a performance improvement plan (PIP), and a sudden turn when coworkers report safety concerns—then pivots to a tougher question: when does care become coercion?

We walk through the core facts with clarity: the performance improvement plan, the mandatory referral to an outside EAP provider, and the form that would send attendance and treatment compliance back to the employer as a condition of keeping the job. That form becomes the fault line. Under the old “significant change” rule, a court might see the referral as inconvenient but not legally adverse. After Muldro, the bar drops. Non-monetary harms like coerced disclosures and loss of autonomy now qualify if they leave an employee worse off in a tangible way. We also weigh the employer’s best defense—policy consistency across employees—and why uniform rules do not automatically defeat a “regarded as disabled” claim when the trigger is a perceived mental health condition.

You’ll hear practical guidance woven through the analysis. For employers: narrow data collection, separate safety from performance, document objective reasons, and avoid tying privacy waivers to job survival. For employees: understand how “some harm” broadens viable claims, especially around privacy and compelled consent. By the end, you’ll see how Muldro reshapes risk around EAP mandates, monitoring, lateral transfers, and other once “minor” actions—and why the Shear case will influence where courts draw the line between genuine concern and unlawful stereotyping. If this conversation helps you think differently about policy, privacy, and workplace fairness, subscribe, share the episode with a colleague, and leave a quick review to tell us what resonated most.

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For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.

Disclaimer: For educational use only, not intended to be legal advice.

SPEAKER_01:

Welcome to the deep dive. Today we're looking into a uh really significant legal shift affecting employment law. It centers around a former health system employee, Bethany Shear, and her employer, Sisters of Charity of Leavenworth Health System, or SCL.

SPEAKER_00:

Exactly. Our source material is the 2025 10th Circuit ruling, Shear v. Sisters of Charity. And this case is, well, it's absolutely crucial because it's one of the first big ones applying a brand new lower standard set by the Supreme Court for workplace discrimination claims.

SPEAKER_01:

So this isn't just academic theory.

SPEAKER_00:

Aaron Powell Not at all. This directly impacts how employers have to handle concerns about employee behavior, uh, mental health right now.

SPEAKER_01:

Aaron Powell Okay. So our mission today is to unpack Bethany Shearer's story, her job at SEL, the mandatory mental health counseling situation, and ultimately her firing. But maybe even more importantly, we need to get into the legal shift itself, this Moldro decision, which basically revived her case when it seemed dead in the water. Okay, let's unpack this.

SPEAKER_00:

So Bethany Shear, she worked for SCL in their physician billing department. Her role was patient accounts representative I, and she was there from 2014 up until 2019.

SPEAKER_01:

And for a lot of that time, the relationship seems, well, a bit rocky. Focused mainly on her job performance.

SPEAKER_00:

That's right. If you dig into SCL's records, there's a clear paper trail. Uh Shear had seven different corrective actions noted between 2014 and 2018.

SPEAKER_01:

Seven. Wow.

SPEAKER_00:

Yeah, and almost all of them were about not hitting her monthly productivity targets. Her supervisors, uh stole, they saw this pattern. She'd have low output for most of the month, then this kind of last-minute scramble, lots of stress, to try and meet the goals.

SPEAKER_01:

So by August 2019, they decided to act.

SPEAKER_00:

They did. Supervisors Oars Born and Stoll drafted a performance improvement plan, a PIP. Pretty standard stuff, really. They intended it as a tool, you know, not disciplinary, just to help her get more consistent.

SPEAKER_01:

Right, just address the productivity.

SPEAKER_00:

That was the plan initially. But then things changed dramatically around August 22nd and 23rd of 2019. The focus shifted sharply from just performance to a perceived crisis. Oh so Skear apparently shared some deeply personal issues with several co-workers, and those coworkers reported feeling seriously concerned about her well-being, her safety even. Okay. One supervisor, Stowe, actually relayed concerns to HR, mentioning talks of suicide or possibly suicidal ideations.

SPEAKER_01:

Uh okay, that definitely shifts the dynamic. Right. So once HR gets involved, what happens to that standard PIP?

SPEAKER_00:

Aaron Powell Well, the HR director, Karen Oxenford, got these reports, and the PIP was immediately overhauled. It wasn't just about billing quotas anymore. Who do they add? They added a very specific mandatory requirement. She had to be referred to SCL's employee assistance program, the EAP. This was handled by an outside company, New Directions, and crucially, this counseling wasn't just suggested. It was made an explicit condition of her keeping her job.

SPEAKER_01:

Wow, a condition of employment.

SPEAKER_00:

Exactly. And this is where it gets really complicated. Shear, initially, she said something like she was not opposed to seeing someone for help. She seemed okay with the basic idea of the PIP, but the mandatory EAP part required her to sign a specific document, a formal referral form, the FMR form, and that form became the major sticking point.

SPEAKER_01:

Why? What was on it?

SPEAKER_00:

It wasn't just a simple privacy release, you see. By signing it, Shear would authorize the EAP provider, new directions, to report two specific things back to her employer, SCL.

SPEAKER_01:

Okay, what were they?

SPEAKER_00:

First, simply whether she attended the counseling sessions. Second, and this is key, whether she complied with whatever recommendations the EAP made.

SPEAKER_01:

Ah, so SEL would know if she was following the therapist's advice.

SPEAKER_00:

Essentially, yes, at least in terms of compliance. And Shear refused point blank to sign it. She argued it was overbroad, a potential ADA violation, and a serious invasion of her privacy.

SPEAKER_01:

Especially since she maintained she wasn't actually mentally ill or a danger to herself.

SPEAKER_00:

Precisely. Her concern was that SCL was basically getting oversight, you know, control over intimate details of her potential mental health treatment simply as a term of keeping her job.

SPEAKER_01:

How did SCL react to her refusal?

SPEAKER_00:

They didn't budge. From their perspective, signing that FMR form was a mandatory part of complying with the PIP, it was non-negotiable.

SPEAKER_01:

So and she kept refusing. Okay, so that leads to the lawsuit. What was her specific legal argument?

SPEAKER_00:

This is really important. She sued under the Americans with Disabilities Act, the ADA, specifically using the regarded as disabled pronged.

SPEAKER_01:

Meaning she wasn't claiming she had an actual disability.

SPEAKER_00:

Correct. Her argument was that SCL terminated her based on their erroneous perception that she suffers from a disability of mental illness. She argued they acted based on, quote, myths, fears, and ather stereotypes, not on any actual inability to do her job or concrete evidence of being a danger. The firing, she claimed, stemmed from their perception, their fear.

SPEAKER_01:

What's fascinating here is how this played out legally. SEO actually won the first round, didn't they?

SPEAKER_00:

They did. And it really highlights how quickly legal standards can change. When Shear's case first went to the district court, the judge applied the existing law in that circuit, the 10th circuit.

SPEAKER_01:

And that law made it hard for her.

SPEAKER_00:

Very hard. The standard came from a 1998 case, Sanchez. To prove discrimination under the ADA or Title VII, an employee had to show they suffered an adverse employment action. But Sanchez defined that action really narrowly.

SPEAKER_01:

How narrow? What was that old standard?

SPEAKER_00:

It had to be a significant change in employment status. Think big things getting fired, being demoted, not getting a promotion you were qualified for, or maybe being reassigned to a job with vastly different, usually worse responsibilities. It was a high bar.

SPEAKER_01:

Like a wall the plaintiff had to climb over, basically.

SPEAKER_00:

Exactly, a pretty high wall. So the district court looked at the mandatory EAP referral, even with that controversial FMR form, and said, okay, maybe it's invasive, maybe it's inconvenient, but is it a significant change in her job status, like a firing or demotion?

SPEAKER_01:

And the answer was no.

SPEAKER_00:

The answer was no. At that point, the referral itself wasn't the firing, it was just a condition leading to the firing if she refused. So under that old high standard, the court dismissed her case. The wall was too high.

SPEAKER_01:

But then everything changed.

SPEAKER_00:

Everything changed. In 2024, after the district court dismissed Shear's case, the U.S. Supreme Court dropped a bombshell ruling, Muldrove v. City of St. Louis.

SPEAKER_01:

And Muldro wasn't even an ADA case, right?

SPEAKER_00:

Correct. It was actually a Title VII case about alleged sex discrimination involving a job transfer. But the impact was massive because the Supreme Court explicitly rejected that whole significant change test. They said that standard was wrong, not just for Title VII, but implicitly for other federal discrimination laws that use similar language, like the ADA.

SPEAKER_01:

Wow. So the Supreme Court just tore down that high wall for potentially all federal discrimination claims race, sex, religion, disability. Trevor Burrus, Jr.

SPEAKER_00:

That's the implication. It lowered the burden significantly. So if the old standard was that high wall, what's the new one?

SPEAKER_01:

What is the new standard after Maltro?

SPEAKER_00:

The new rule is much simpler, much slower. Plaintiffs now only need to show they suffered some harm respecting an identifiable term or condition of employment.

SPEAKER_01:

Some harm, not significant harm.

SPEAKER_00:

Exactly. The Supreme Court clarified the employer's action must have left the plaintiff worse off, but need not have left her significantly so. It's no longer about proving a major change. It's just about showing you were disadvantaged in some tangible way related to your job.

SPEAKER_01:

So because Muldro came out after Shears' case was dismissed.

SPEAKER_00:

The 10th Circuit Court of Appeals, in its 2025 decision reviewing Shears case, basically said, hold on, they vacated the lower court's dismissal of the case.

SPEAKER_01:

Meaning they canceled the dismissal.

SPEAKER_00:

Right. They told the district court, the rule you use, the significant change rule, that's not the law anymore, thanks to Muldro. You need to look at this again using only the new lower sum harm standard.

SPEAKER_01:

Here's where it gets really interesting. Because the fight now isn't about whether the harm was big enough. It's about whether this kind of harm, forcing someone to potentially reveal sensitive health compliance info to keep their job, counts as any harm at all.

SPEAKER_00:

That's precisely the question the district court has to grapple with now on remand. What does some harm actually look like when it's not about losing pay or a promotion, but about things like medical privacy and personal autonomy?

SPEAKER_01:

And SCL still has arguments, right? They didn't just roll over.

SPEAKER_00:

Oh, absolutely not. SCL has some strong points. They emphasize Shear's performance history, the fact the PIP was initially drafted before the suicidal ideation reports came in. They argue the EAP referral wasn't discriminatory retaliation for anything.

SPEAKER_01:

And didn't they use this EAP referral on someone else too?

SPEAKER_00:

Yes, that's a critical piece of their defense. They showed evidence that they had issued an identical mandatory EAP referral with the same FMR form requirement to a different employee. And that other employee was referred for general disruptive behavior with no mention of suicidal thoughts or mental health issues.

SPEAKER_01:

So SCL's argument is look, this is just our standard procedure for certain behavioral or performance issues. We applied it consistently, not because we regarded Shear as disabled.

SPEAKER_00:

Exactly. That consistency argument is probably their best defense against the discrimination claim. Plus, they also point out something else Shear did after she was fired.

SPEAKER_01:

Okay.

SPEAKER_00:

Apparently, after her employment ended, Shear voluntarily went to five EAP sessions with the very same provider, new directions. Oh. So SCL argues, see, she wasn't actually harmed by the referral itself. She later chose to use the service. How can the earlier mandated referral be considered harm if she ultimately found value in it?

SPEAKER_01:

Okay, wait though. Let me push back on that, especially under the new some harm standard. Just because she later went voluntarily doesn't erase the potential harm of being forced to agree to that specific FMR form as a condition of keeping her job.

SPEAKER_00:

That's Sheer's counter-argument, precisely. The harm wasn't necessarily the counseling itself, it was the coercion. It was being forced, under threat of firing, to sign away a degree of control over her personal health information specifically, the compliance reporting back to SCL.

SPEAKER_01:

The mandatory nature and that specific form are key.

SPEAKER_00:

They are. Her argument is she wasn't just told go get help. She was told sign this form, allowing us oversight into your EAP attendance and compliance, or you're fired. That required disclosure, linked to the employer's action, which she claims was based on a perceived disability. They're regarded as part that's the harm.

SPEAKER_01:

And if SEL acted because they wrongly perceived her as mentally unstable, acting on a stereotype, maybe then demanding that invasive compliance info as a job condition.

SPEAKER_00:

Yeah.

SPEAKER_01:

That itself makes her worse off, doesn't it? It's a loss of privacy and autonomy that other employees didn't face.

SPEAKER_00:

This raises an important question. It highlights the core tension now. Can an employer have a policy, apply it consistently like SEL did with the other employee, but still have it result in discrimination if the reason they applied it to SHEAR was based on a perceived disability, and that application caused this unique non-monetary harm related to privacy.

SPEAKER_01:

So the debate has shifted. It's not, was the harm significant anymore? It's just was there some harm, some disadvantage? And being forced to sign that waiver under threat of firing seems like a clear disadvantage.

SPEAKER_00:

It certainly seems easier to argue under the new standard. And you have to remember, she was suspended without pay and then fired, specifically because she refused to sign that form.

SPEAKER_01:

Right. The refusal was the direct trigger for the negative consequences.

SPEAKER_00:

Exactly. The mandatory requirement was the term of employment she wouldn't meet, the refusal triggered the disciplinary action, and termination was the ultimate result. Under the some harm test, connecting those dots is much more straightforward for a plaintiff. Which is why the case is back with the district court, they now have to decide if that compelled loss of privacy and autonomy qualifies under this lower Moldra standard.

SPEAKER_01:

So what does this all mean? What's the big takeaway here?

SPEAKER_00:

Well, the key takeaway for you listening is pretty stark. The Moldra decision means employers really need to be hyper-aware now. Actions that might have seemed a minor before, things like mandatory EAP referrals, even changes in work schedules, specific types of monitoring, or lateral transfers with different duties. These can all potentially be seen as adverse employment actions if they leave an employee objectively worse off in some way.

SPEAKER_01:

Even if it's not about money or title.

SPEAKER_00:

Even if it's not about money or title. The bar for employees to bring discrimination suits under the ADA in Title VII has been lowered quite dramatically, actually.

SPEAKER_01:

It feels like it really puts teeth into that regarded as disabled prong of the ADA.

SPEAKER_00:

It really does. Think about it. Shear's entire claim rests on SCL regarding her as having a mental illness based on those coworker reports based on, as she alleges, myths, fears, and stereotypes. Right. So if an employer acts out of what they might see as genuine concern, but that concern stems from an unfounded perception or stereotype about a disability, and that action forces the employee into a situation that causes some harm, like signing a coercive privacy-invading form to keep their job. Well, the new Muldros standard makes it significantly easier for that employee to argue that the employer's helpful intervention is, in fact, direct evidence of discrimination based on that perceived disability.

SPEAKER_01:

That's a really fine line for employers to walk now.

SPEAKER_00:

It is. Future cases are definitely going to be exploring this tension. Where does genuine appropriate concern end and a legal action based on stereotyping begin? Especially when the resulting harm isn't a demotion, but something more like a loss of autonomy or privacy.