Background
Jeffrey Steidle, a Marine Corps veteran diagnosed with major depressive disorder, PTSD, and anxiety, worked as a claims examiner at United States Liability Insurance Co. (USLI). After informing his supervisor in the summer of 2020 that he was struggling with his mental health, Steidle took approved FMLA leave from October through December 2020. While he was on leave, his supervisor approved his annual compensation review — awarding him only a $3,000 bonus and a 2.5% salary increase, his smallest compensation adjustments since joining the company in 2013. Prior to the leave, his bonuses had ranged as high as $7,000 and salary increases as high as 14%.
After returning to work in late 2020, Steidle requested and received ADA accommodations in May 2021 to manage his stress, anxiety, depression, and PTSD. Shortly thereafter, a supervisor warned Steidle that if he continued discussing his mental health struggles with colleagues, USLI “would be forced to take action against him,” and told him to “scream at his wife” instead of emailing his concerns. Steidle’s 2021 year-end compensation was again reduced relative to historical levels — a $3,150 bonus and a 3.6% salary increase. In 2022, Steidle requested indefinite medical leave; USLI terminated his employment when it could not accommodate the open-ended absence.
Steidle sued USLI under the ADA and FMLA, asserting disability discrimination and retaliation. The Eastern District of Pennsylvania granted summary judgment to USLI on all claims, holding that Steidle had not suffered an adverse employment action and had not established a causal connection between his protected activity and the reduced compensation. Steidle appealed the retaliation rulings.
The Court’s Holding
The Third Circuit vacated summary judgment on Steidle’s retaliation claims arising from the 2020 bonus and salary increase, and affirmed summary judgment on the 2021 bonus claims. In a precedential ruling, the court held for the first time that the Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), standard for adverse employment action in Title VII retaliation cases applies with equal force to retaliation claims under the ADA and the FMLA. Under that standard, a plaintiff need not show that an employer’s action altered the terms or conditions of employment; instead, the plaintiff must show only that “a reasonable employee would have found the challenged action materially adverse” — meaning it “well might have dissuaded a reasonable worker” from exercising protected rights. The court concluded that the near-textual identity between Title VII’s antiretaliation provision and those of the ADA and FMLA, the statutes’ shared legislative history, and the near-universal consensus of other circuit courts all compelled this result.
Applying the Burlington Northern standard, the court held that a jury could find that a more-than-40% reduction in bonus and a significant cut in salary increase percentage — occurring while Steidle was on FMLA leave — could dissuade a reasonable worker from requesting leave or accommodation. The court also held that the pre-Burlington Northern distinction between discretionary and automatic bonuses is no longer tenable: because retaliation plaintiffs no longer need to show an action altered terms or conditions of employment, whether a bonus was guaranteed is irrelevant. On causation, the court found that the bonus decision made during Steidle’s FMLA leave established unusually suggestive temporal proximity, sufficient standing alone to create an inference of causality and defeat summary judgment. Because the District Court had not addressed whether USLI’s stated justifications were pretextual, the court remanded for that analysis. As to the 2021 bonus, the court affirmed — finding no evidence of unusually suggestive timing or other indicia of retaliatory animus sufficient to establish causation at the prima facie stage.
The court also affirmed the District Court’s dismissal of Steidle’s disability discrimination claim, concluding that Steidle had waived it on appeal and that, in any event, his request for indefinite leave rendered him unable to perform the essential functions of his position with or without reasonable accommodation.
Key Takeaways
- The Third Circuit now formally holds — joining virtually every other circuit — that the Burlington Northern “materially adverse / would dissuade a reasonable worker” standard governs adverse employment action for ADA and FMLA retaliation claims, not the stricter standard requiring alteration of terms or conditions of employment.
- Reduced discretionary bonuses and smaller salary increases can constitute adverse employment actions under the Burlington Northern standard; the old distinction between automatic and discretionary bonuses is no longer valid in the retaliation context.
- When a compensation decision is made while an employee is actively on FMLA leave, that timing alone can constitute “unusually suggestive temporal proximity” sufficient to establish causation and defeat summary judgment — the employer’s normal practice of making year-end decisions does not neutralize the inference at the prima facie stage.
- The Burlington Northern materiality inquiry is objective — it asks what would dissuade a reasonable employee, not whether this particular plaintiff was actually deterred from exercising protected rights.
Why It Matters
This decision resolves a long-open question in the Third Circuit and aligns its precedent with the national consensus. Employers in Pennsylvania, New Jersey, and Delaware must now apply a single, plaintiff-friendly adverse-action standard across Title VII, ADA, and FMLA retaliation claims. Actions that might not “alter terms or conditions of employment” — such as reducing a discretionary bonus, assigning less desirable work, or making scheduling changes — can nonetheless support a retaliation claim if a reasonable employee would find them materially adverse.
For employment lawyers, the ruling underscores the evidentiary significance of compensation decisions made during or immediately after protected leave. Employers who conduct annual reviews on a fixed calendar cycle should be alert to the risk that decisions affecting employees who are concurrently on FMLA leave will face a presumption of causation that cannot be rebutted simply by pointing to ordinary business practice. The remand also signals that, if pretext is in dispute, that analysis must be conducted separately and cannot be collapsed into the prima facie causation inquiry.