Employers being sued over inflexible leave policies
A number of cases are being brought across the country challenging employers’ inflexible leave policies, sometimes known as administrative separation policies, under which an employee is terminated for failure to return to work following a maximum period allowed for a leave of absence. Many employers have policies that if an employee is absent for leave for more than a set period of time, e.g., three months, six months, 12 months, or 24 months, they are administratively terminated from employment. Such policies have traditionally been seen as desirable, inasmuch as otherwise an employee can stay on the employment rolls forever, and the objective nature of the policy is often considered desirable in avoiding discrimination claims. More recently, however, these traditional notions of sound policy are being legally challenged.
On Aug. 28, 2009, the Equal Employment Opportunity Commission (EEOC) announced that it filed a major class action lawsuit against United Parcel Service (UPS). The suit alleges that UPS terminated the employment of the plaintiff because of her disability rather than accommodating her by extending her leave of absence in violation of the American With Disabilities Act (ADA), and the lawsuit further claims that UPS discriminated against a class of individuals with disabilities by maintaining an inflexible 12-month leave policy which did not provide for a reasonable accommodation and which instead provided for termination of employment, also in violation of the ADA. The EEOC seeks an order requiring UPS to grant full relief to a class of disabled individuals by providing them with appropriate back pay with pre-judgment interest, compensation for past and future monetary losses resulting from their unlawful termination, compensation for non-pecuniary losses including but not limited to pain and suffering, and punitive damages.
According to a press release issued by the EEOC, the plaintiff administrative assistant took a 12-month leave of absence from work when she began experiencing symptoms of what was later diagnosed as Multiple Sclerosis. She returned to work for a few weeks, but soon thereafter needed additional time off after experiencing what she believed to be negative side effects of her medication. The press release further claims that although the plaintiff allegedly could have returned to work after an additional two-week of absence, UPS fired her for exceeding its 12-month policy.
UPS in its public statement expressed frustration with the government’s attack on “one of the most generous and flexible leave policies in corporate America.” UPS stated that it intends to “vigorously defend” its leave policy as the litigation progresses.
In another lawsuit, brought in September 2009, the EEOC announced a $6.2 million settlement of a class action that accused the Sears department store chain of widespread disability discrimination. The EEOC noted that the $6.2 million settlement is the largest recovery in a single lawsuit filed by the agency over alleged violations of the ADA. According to the lawsuit, Sears maintained an inflexible one-year workers’ compensation leave exhaustion policy and fired employees instead of providing them with reasonable accommodations for the disabilities as required under the ADA.
In a third related case, involving slightly different issues under the ADA, a divided Ninth Circuit Court of Appeals has reinstated the disability discrimination claims of a former employee who sued her employer for requiring that she pass a physical capacity evaluation (PCE) before returning to her job after medical leave. The employer’s policy required employees to undergo PCE’s before returning to work from medical leave, and the employer sent the employee to an occupational therapist for the exam. The PCE, which lasted 2 days, included, as the employee described it, “testing, poking, palpating and examining.” The employer ultimately told the employee that she could not have her old job and no other jobs were available for someone with her qualifications. Ultimately she was fired under a provision in the collective bargaining agreement that allowed the company to terminate employees who have been on leave for two years.
The 2-1 Ninth Circuit majority ruling agreed with the employee’s argument that the PCE was an improper medical examination under the ADA, which prohibits employee medical examinations that are not job-related and “consistent with business necessity.”
The majority concluded that the employer’s PCE went way beyond what was necessary to determine an employee’s ability to perform the essential functions of her job. Although the purpose of the PCE may have been to determine whether the employee was capable of returning to work, “the substance of the test clearly sought information about the employee’s physical and mental impairments or health, and involved tests and inquiries capable of revealing to the employer whether she suffered from a disability.”
The bottom line of much of this litigation is that the EEOC insists that in some circumstances an exception may have to be made to an objective leave of absence policy as a reasonable accommodation. However, the current state of the law suggests that an employer is not required to make exceptions to their normal leave policies, unless the employee requests an accommodation. Employers are advised to stay abreast of court decisions in this area, a good number of which should be expected over the next several years, given the recently-filed lawsuits challenging employers’ leave of absence policies.
Jerome Pinn is an attorney in the Knoxville office of Wimberly, Lawson Seale & Daves. He welcomes your comments on this topic or other employment law issues, and can be reached at (865)546-1000.
