Appeals Courts Weigh ‘Honest Belief’ Rule for Bias Claims

Two pending cases give federal appeals courts openings to reassess the “honest belief” rule, a tool courts use to let companies off the hook for allegedly biased employment actions if they offer legitimate reasons based on incorrect information they trusted at the time.

Courts are inconsistent and case law is vague on applying the honest belief rule to discrimination cases, legal observers say. And plaintiffs’ attorneys argue that it gives employers an off-ramp to escape lawsuits via a judge’s conclusion that should be left to a jury.

Even if the circuit courts stick with their approaches to the rule, they ...