The same unpaid leave that protects an employer in one case can create liability in another.
TL;DR: Unpaid leave can be a lawful, reasonable accommodation under the Americans with Disabilities Act (ADA) when an employee truly cannot work. But after the Supreme Court’s Muldrow decision lowered the bar for what counts as an adverse employment action, a federal appeals court applied that rule to a religious-accommodation case. If an employee cannot work because of a medical limitation, unpaid leave helps. If the employee could work but is sent home because of their beliefs, unpaid leave hurts.
When unpaid leave helps
Under the ADA, unpaid leave often makes sense. If a worker needs surgery, treatment, or recovery time and temporarily cannot perform essential job duties, leave gives them a path back to work.
The harm, meaning the lost wages, does not come from discrimination. It comes from a medical limitation the employer is accommodating. The leave fixes the problem instead of creating one.
When unpaid leave hurts
Title VII works differently because religion is about belief, not ability.
In a recent appellate decision, an employee objected to a mandatory vaccination policy for religious reasons. He could do his job but could not meet that requirement in good conscience. Management had him sit through a panel interview about his beliefs, sign a certification statement, and read a company fact sheet quoting religious leaders who supported vaccination.
When he still refused vaccination, the company told him to use his vacation time and then go on unpaid leave. That leave was labeled as the accommodation.
The court did not decide whether this was illegal, but it sent the case back for reconsideration under Muldrow. The new question is whether unpaid leave caused some harm to the employee’s terms or conditions of employment because of religion.
For someone who could keep working, losing pay, benefits, and workplace connection is real harm, especially when the only reason for it is faith.
Will this come up again?
Probably not with vaccines, but the same issue can arise any time unpaid leave becomes the shortcut for handling a difficult accommodation.
Consider situations such as:
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A worker who asks to swap shifts for Sabbath observance and is told to take the day off without pay
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An employee who will not remove religious clothing or facial hair and is sent home until they comply
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A team member who objects to attending a required event that conflicts with faith-based beliefs and is told to stay out that day
In each example, the employee could keep working if the company adjusted scheduling, duties, or policies. Sending that employee home unpaid does not solve the problem; it may create one.
That is why the Muldrow standard matters. Unpaid leave that once looked like a reasonable compromise may now look like some harm tied to religion, which is exactly the kind of harm Title VII forbids.
What this means for employers
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ADA: Unpaid leave can be reasonable when the employee temporarily cannot perform essential functions and needs time off to recover.
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Title VII: Unpaid leave can be discriminatory when the employee could work with another accommodation.
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Ask first: Instead of “Can we send them home?” ask “Can we let them work differently?”
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Train and document: Supervisors must know the difference, and HR should record why each decision was made.
The takeaway
Unpaid leave can be a lifeline or a liability. The difference is why it is used.
If an employee cannot work because of a medical condition, unpaid leave keeps them connected to the job. If an employee could work but is sent home because of their faith, unpaid leave cuts that connection, and that can be discrimination.
The safest approach is simple: whenever possible, keep people working.