The Denver-based federal appeals court revived a Westminster woman’s lawsuit against her former employer on Monday, noting a recent U.S. Supreme Court decision lowered the hurdle for proving employment discrimination.

Bethany Scheer sued under the Americans with Disabilities Act and the related Rehabilitation Act, alleging her employer perceived her as disabled, mandated that she attend treatment and further required that it receive certain information about that treatment. When Scheer refused, she was fired.

A trial judge originally sided with her employer, Sisters of Charity of Leavenworth Health System, Inc., reasoning that the requirement to participate in treatment was not the type of “significant change in employment status” that could support a discrimination claim.

But while Scheer’s case was on appeal, the U.S. Supreme Court ruled that employer actions need not be “significant” to amount to discrimination. Consequently, a three-judge panel of the U.S. Court of Appeals for the 10th Circuit ordered a second look at Scheer’s claims.

“The district court dutifully followed Circuit precedent. But at the time the court issued its order, it did not have the benefit of the Supreme Court’s instruction,” wrote Judge Allison H. Eid in the July 21 opinion.

In April 2024, the Supreme Court decided Muldrow v. City of St. Louis, a case involving a female police officer alleging she was transferred to a less-desirable position because of her sex. Lower courts, following the understanding in place at the time, determined she had not shown the transfer amounted to a significant change in working conditions — a standard that does not appear in the law itself.

“‘Discriminate against’ means treat worse,” wrote Justice Elena Kagan. “But neither that phrase nor any other says anything about how much worse.”

Consequently, the Supreme Court rejected the “significance” standard for employment discrimination, which the 10th Circuit had also adopted in a 1997 decision.

In Scheer’s lawsuit, Sisters of Charity put her on a performance improvement plan in August 2019. But because there was a perception she was suicidal, part of the plan involved Scheer getting treatment through a confidential employee assistance program. Although she agreed to the treatment, Scheer did not accept the condition that the program would disclose to her employer whether she complied with the recommendations.

In response, she was fired.

In January 2024, U.S. District Court Judge Daniel D. Domenico sided with Sisters of Charity. He noted the mandatory referral to the treatment program “pushes the needle closer” to establishing Scheer’s employer took negative action against her based on a perceived mental disability. 

But it ultimately “was not a significant change in employment status,” wrote Domenico, relying on the 10th Circuit’s precedent.

Three months later, the Supreme Court decided the Muldrow case. Scheer appealed, arguing she no longer had to show the mandatory treatment referral was significant, only that it caused her some harm.

“She lost the freedom to engage in therapy on her own terms with a therapist of her own choosing on her own schedule, and the terms were set by her employer,” Karla Gilbride, an attorney for the U.S. Equal Employment Opportunity Commission, told the 10th Circuit judges during oral arguments in November. “And significantly, she lost the ability to have trust in the privacy of her medical information not being shared with her employer.”

Attorney David C. Gartenberg, representing Sisters of Charity, responded that even under the lower standard, Scheer had not proven her employer took adverse action against her.

“Being sent by your employer to mandatory counseling, being told you must sign a release — forced to sign a release — to reveal if you go to that counseling,” said Judge Nancy L. Moritz. “She was forced to go or be terminated. I don’t know how you could suggest that didn’t impact the terms and conditions of her employment.”

The 10th Circuit ultimately returned the case to Domenico to decide if Scheer’s claims should proceed to trial on the understanding that her employer need not have taken “significant” disability-based action against her.

The case is Scheer v. Sisters of Charity of Leavenworth Health System, Inc.