Risk Insider: Terri Rhodes

7th Circuit’s ADA Ruling: Important, but Limited

By: | November 27, 2017

Terri L. Rhodes is CEO of the Disability Management Employer Coalition. Terri was an Absence and Disability Management Consultant for Mercer, and also served as Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

There’s been a lot of excitement about the 7th Circuit’s recent ruling on granting additional leave as an accommodation under the Americans with Disabilities Act (ADA).  Some observers have gone so far as to claim the ruling “changes everything we know about the ADA.”

There’s no doubt the 7th Circuit’s ruling is a significant thing.  But to avoid trouble, it’s important to keep it in perspective.

Here’s a quick recap of how we got here.

In 1997, the Equal Employment Opportunity Commission (EEOC) filed suit against Sears Roebuck & Co.  The EEOC alleged the retail company discriminated against a salesperson by refusing to provide her with additional leave as a reasonable accommodation under the ADA. The EEOC said that Sears “maintained an inflexible worker’s compensation one-year leave policy which does not provide for reasonable accommodation of employees with disabilities.”

The U.S. District Court for the Northern District of Illinois ruled in favor of Sears. The EEOC appealed. The 7th Circuit Court of Appeals decided there was enough evidence for a jury trial and sent the case back to the District Court. In 2010, the case settled for $6.2 million.

And then there is perhaps the decision’s most quoted line: “The ADA is an antidiscrimination statute, not a medical-leave entitlement.”

Several other circuit courts followed suit. However, 20 years later, along comes Severson v. Heartland Woodcraft, Inc.

The 7th Circuit seemed to reverse itself when it affirmed a district court’s ruling that an employer did not violate the ADA by failing to provide an employee with a long-term medical leave of absence because a multi-month leave of absence was beyond the scope of a reasonable accommodation under the ADA.

The ruling itself rightly caught peoples’ attention. So did some of its language. For example, the 7th Circuit stated that “a long-term leave of absence cannot be a reasonable accommodation” under the ADA.  It went on to say such a leave would transform the ADA “into a medical-leave statute — in effect, an open-ended extension of the FMLA.” And then there is perhaps the decision’s most quoted line: “The ADA is an antidiscrimination statute, not a medical-leave entitlement.”

But before employers get too excited, it’s important to note some very important caveats.

The 7th Circuit is one court. Circuit courts in other jurisdictions have reached differing conclusions on this issue. Further, the EEOC continues to take the position that leaves of absence may constitute reasonable accommodation in certain circumstances. “Inflexible” leave policies could still be in the EEOC’s sights.

Most importantly, the 7th Circuit offers no statutory citation for its conclusion about a multi-month leave — opening it up to potential challenge. Nor does the ruling offer any real guidance for employers on what length of leave is reasonable.

So what can employers do to reduce the risk of an employee or EEOC action on an “inflexible” leave law?

First, employers should focus on individual employees. The ADA requires a case-by-case assessment to determine which particular form of accommodation is reasonable for a particular employee. A blanket refusal to grant multi-month leaves is not the kind of case-by-case assessment required by the ADA. The key to reducing potential liability is an interactive, individualized, and well-documented process.

Next, learn what other employers are doing. Leave laws are increasingly complicated, especially the interaction among them. Risk managers, HR professionals and others can take advantage of the workshops, webinars, training videos and other resources on the ADA; many are available at low or even no cost.

Finally, employers should think about going beyond ADA requirements. The immediate and reasonable question is, “why wouldn’t you try to accommodate an individual with a qualified disability?”

That question is best answered with other questions:

  • Why would you want skilled, experienced employees to leave your organization?
  • Why would you want to increase ADA litigation risks for your organization?

Rather than seeing the ADA as a problem to mitigate, employers should see it as an opportunity to maximize and retain valuable talent. Many employers have made that shift in regard to workers’ compensation (WC) claims. WC costs can be so significant that some organizations successfully adopt an “above and beyond” attitude toward helping claimants stay at work or return to work. Doing so requires investment in proactive policies, processes and procedures to reduce claims. It requires work, but the return on investment can be substantial. The same applies to the ADA. That investment can pay big dividends in today’s tight — and litigious — labor market.

The 7th Circuit’s recent ADA ruling isn’t the last word on reasonable accommodations. Employers should continue to take steps that minimize liability and maximize the ability to attract good talent to compete and grow.

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