EEOC's $2 Million Settlement Of Nationwide ADA Case Shines Light On The Risks Presented By Inflexible Maximum Leave Policies

By Michael G. McClory - Bullard Law

August 10, 2017

EEOC announced Tuesday that it had settled a decade-old dispute revolving around allegations that a UPS “maximum leave” policy setting an inflexible termination requirement at 12 months violated the ADA.  EEOC interprets a maximum leave policy as an employer’s agreement that the specified amount of leave (e.g., 12 months) is reasonable in EVERY case; the agency’s position is that the employer should be evaluating whether leave in excess of the “maximum” is reasonable in any specific situation.

Before we address the underlying allegations and the leave policy, we offer the following takeaways up front:

A.  The ADA requires employers to engage in an individualized interactive process regarding reasonable accommodation; and
B.  Blanket policies that inflexibly require termination after a set maximum leave period are likely to lead to liability on the ground that they violate the ADA’s requirement of an individualized interactive process regarding reasonable accommodation.

After we frame the discussion with the underlying allegations, we will discuss these takeaways in more detail below.
 
Underlying Allegations
 
In 2009 EEOC filed a disability discrimination suit against UPS in Illinois.  Initially, EEOC filed the suit on behalf of a single employee (Ms. Momsen).  However, following a motion to dismiss, EEOC refiled the suit on behalf of the original employee, a second employee (Ms. Luvert), and a nationwide class of similarly situated employees.
 
In the lawsuit, EEOC asserted that UPS failed to engage in the interactive process regarding potential reasonable accommodations, failed to provide reasonable accommodations, and terminated employees pursuant to its 12-month maximum leave policy rather than engaging in the interactive process to determine whether reasonable accommodation, including additional leave, might be possible.  Here is what EEOC alleged related to the two identified employees.

•    Ms. Momsen took 12 months of leave related to multiple sclerosis.  On her return to work she requested a handcart as a reasonable accommodation, which request UPS denied.  Ms. Momsen subsequently incurred a workplace injury requiring time off.  Although not immediately, the company eventually terminated her employment pursuant to its maximum leave policy.

•    Ms. Luvert suffered from emphysema.  After UPS transferred her for reasons unrelated to her disability, she requested a transfer to a better ventilated area, such as her prior work station.  Instead of granting that request, UPS placed Ms. Luvert on medical leave and, when the leave exceeded 12 months, terminated her employment pursuant to its maximum leave policy.

Both terminations occurred in 2007 and the litigation process has taken a decade.  Because of the settlement, we have no idea whether EEOC or UPS would have prevailed at trial.
 
The UPS Maximum Leave Policy
 
The trial court described the UPS maximum leave policy as a facially-neutral 12-month cliff.  While an employee is taking leave covered by the policy, “UPS keeps the individual’s position open and allows her to continue to receive benefits.  However, if an employee has been unable to return to work for a twelve month period, UPS administratively clears the employee, which entails separating the employee, ending her benefits, and filling the position.”
 
EEOC’s press release makes it clear that the agency views this as unlawful as applied to an employee with a disability.  “UPS maintained an inflexible leave policy, whereby the company fired disabled employees automatically when they reached 12 months of leave, without engaging in the interactive process required by law.”
 
The Settlement Terms
 
As noted, EEOC announced that it had settled the long-litigated nationwide discrimination suit.  The lead statement in the press release is that UPS “agreed to pay $2 million to nearly 90 current and former UPS employees to resolve a nationwide disability discrimination lawsuit filed in 2009” by EEOC.  However, in addition to paying monetary relief, the settlement obligates UPS to do the following:

•    Update its reasonable accommodation policies,
•    Improve its implementation of those policies,
•    Train those who administer the company's disability accommodation processes, and
•    For the next three years, provide EEOC with periodic reports on the status of every accommodation request.

Practical Takeaways
 
At the outset, The Bullard Edge offered these two major takeaways.

a.  The ADA requires employers to engage in an individualized interactive process regarding reasonable accommodation; and
b. Blanket policies that inflexibly require termination after a set maximum leave period are likely to lead to ADA liability.  EEOC views a maximum leave policy as an employer’s agreement that the specified amount of leave (e.g., 12 months) is always reasonable; the agency’s position is that the ADA requires an employer to evaluate on a case by case basis whether leave in excess of the “maximum” is reasonable.

To amplify these takeaways, The Bullard Edge is going to repeat several of the practical thoughts that Kathy Hindman and I offered six years ago when talking about this case.

1. Maximum leave policies calling for automatic termination are risky.
“If you have a policy that provides 12 weeks of leave regardless of the reason (or 12 weeks of FMLA plus thirty days, or up to one or two years of leave, as some employer’s policies do), remember that automatically terminating employees once leave exceeds the designated maximum period of your policy will not satisfy the ADA.  The ADA requires an individualized (case-by-case) assessment to evaluate whether that particular employee needs a limited extension of medical leave as a reasonable accommodation (and/or whether any other form of accommodation might be reasonable and available).  Having a ‘blanket’ uniform policy that treats everyone the same (i.e., a policy that requires all employees to return to work following the end of the maximum leave available under your particular leave of absence policy) is not the ‘individualized’ assessment contemplated by ADA.”

2. If you know an employee needs more leave, enter into the interactive process.
“A policy should call for an interactive process (dialogue between employer and employees) designed to determine whether the employee needs a limited, additional leave of absence beyond the company policy maximum, or whether the employee can come back to work with reasonable accommodation.  Requiring employees returning from medical leaves to be released to ‘full duty’ without restrictions likely violates the ADA since such a blanket policy implies that the employer will not accommodate work-related restrictions following leave, no matter what the limitations may be.  Remember, employers do not have to provide ‘indefinite’ leaves of absence nor do they have to create new jobs for a returning, work-restricted employee.  An employer does, however, have to enter into an interactive process with employees to evaluate if and when they may return to their former positions (with or without reasonable accommodation), which may include limited leave extensions, part-time work for a short duration, and/or reassignment to a different vacant position.”

3. The interactive process requires you to talk to the employee.
“At a minimum, employers should be contacting an employee who is close to the end of a medical leave if the employer has reason to believe that the employee may need an extension of leave following the designated leave period.  Actually talking to the employee about what he/she needs, and about possible reasonable accommodations, is key (ideally face-to-face, but communication by telephone or email will suffice if face-to-face is not feasible, such as because the employee is unable to come to the workplace because of his/her medical restrictions).  Of course, the ADA does not require you to implement the employee’s preferences for returning to work; it just requires you to gather the employee’s preferences and suggestions and to provide reasonable accommodation where that is possible.  Employers with unions may need to include the union representative in these discussions (particularly where a potential accommodation may conflict in any way with the terms of a collective bargaining agreement).”

4. Extending medical leave beyond the policy maximum is not the end of the world.
A current “individualized assessment of an employee’s need for an extension of leave for his/her disabling medical condition for a limited duration is an option many employers have used for a long time – even before the ADA came alive over two decades ago.  The difference now is that the EEOC is looking for employers who stubbornly stand by their uniform maximum leave of absence policies ‘no matter what.’”
 
The Bullard Edge is a strong believer in the power of a vigorous and thorough interactive process.  In addition to meeting their legal obligations and avoiding ADA liability, the interactive process offers employers the opportunity to improve the efficiency of employees and of the enterprise as a whole.
 
Best regards,
 
The Bullard Edge