In the case of Jenifer Arbaugh v. Y & H Corporation, DBA The Moonlight Cafe in 2005, the U.S Supreme Court ruled that whether an employer has a sufficient number of employees to fall under Title VII's jurisdiction is not a matter for subject-matter jurisdiction but rather one for merits determination. This decision came after Jenifer Arbaugh filed a lawsuit against her former employer, Y&H Corporation (Moonlight Café), alleging sexual harassment and hostile work environment under Title VII of the Civil Rights Act which applies only to employers with "15 or more employees". Initially, it was determined that Moonlight Café did meet this requirement; however post-trial evidence suggested otherwise leading to dismissal due to lack of federal subject-matter jurisdiction. On appeal by Arbaugh, the Supreme Court unanimously reversed this decision stating that employee numerosity should be treated as an element of claim instead being used as grounds for dismissal on basis of lacking federal subject-matter jurisdiction.

In the dissenting opinion for Jenifer Arbaugh v. Y & H Corporation, Justice Thomas argued that Congress had clearly defined in Title VII of the Civil Rights Act what constitutes an "employer" and it was not up to the court to redefine this term. He believed that by doing so, they were overstepping their judicial authority and infringing on legislative power. Furthermore, he contended that whether or not a business met the 15-employee threshold should be considered a jurisdictional issue rather than a component of Arbaugh's claim itself. This would mean it could be raised at any point during litigation instead of being determined before trial as part of summary judgment proceedings. In his view, this interpretation better aligned with Congressional intent and respected separation-of-powers principles.