EEOC v. Sears, Roebuck redux—thoughts on continuing your autotermination, and maybe even termination, policies when dealing with workers’ comp claimants moving forward.
Editor’s comment: Last week, we reported the $6.2 million levy on one of the world’s largest retailers by the Equal Employment Opportunity Commission. We feel the national and regional directors of the EEOC “held up the scalp” of the vanquished corporate human resources department for everyone to see. We feel other HR and general counsels’ departments of the hundreds of U.S. businesses across the country that employ autotermination policies need to undertake a very cautious review of their policies in light of this consent decree. Actually, this may affect any and all termination policies when it comes to dealing with folks on workers’ comp who want reasonable accommodation under ADA. While the record-high settlement doesn’t actually point to any specific provision of the ADA that was violated and isn’t a ruling from a federal or state court, it does signal the willingness of a federal bureaucracy to employ their unlimited legal budget to sue you and potentially force similar seven-figure settlements.
What is the concern of the EEOC? What started this mess? Well, we call autotermination policies a gender/sex/religion/race/sexual-orientation neutral way to terminate any employee. The simple rule is that if a given employee is off work continuously for either six months or a full year (or some other defined term) for any reason, your organization terminates them without recourse.
One thing that Sears may have done wrong comes from the pleadings. In filing a motion to dismiss, you may note the lead Plaintiff worked as an automotive service technician. He was injured when he fell while on the job in April 2001. Although the lead Plaintiff took leave to recover, his injuries arguably left him substantially impaired in his ability to perform physical tasks. According to the EEOC, within three months after his injury he sought placement in two less physically demanding positions for which he was qualified, but Sears refused to place hire him in either position. As a result, he remained on workers’ compensation leave because he was unable to return to his prior service technician job. Ultimately, his employment was terminated under Sears’ disability or worker’s compensation leave policy that inflexibly mandated the termination of employees on leave for more than one year.
In this factual scenario, it appears clear claimant sought the benefit of ADA—he was arguably a qualified individual with a disability and required reasonable accommodation. From these reports, it appears Sears refused to accommodate while he was off so as to allow him to return to work and get off TTD. It is unclear whether initial accommodation would have allowed him to return to full work at a later time. As a result of the refusal to accommodate, Plaintiff was then left to “dangle” and although he may have received TTD, in the process, he lost his job.
Assuming this scenario is accurate, we are very confident in advising all of our readers such a factual scenario is a clear red flag under this approach when the ADA is going to be enforced by the current administration of the EEOC. If you have an employee who is out on TTD and asks for reasonable accommodation to allow them to return to work consistent with ADA, you had better address the request in a meaningful fashion. If you leave them on TTD until your autotermination period passes and fire them, you are directly in the crosshairs over the gun barrels of the EEOC and don’t forget what happened to Sears.
But there are lots of other situations we all need to consider and we will be writing the EEOC for clarification and report any reply. We are wondering what to do with the panoply of situations in which workers are off work for extended periods and what to counsel you about the numerous factual situations that may arise. A fundamental question not answered by the consent decree is patent—can an employer ever terminate a worker who is on TTD? Does the work injury equal infinite or at least indefinite job security to the extent the injured worker could always later claim the need for reasonable accommodation to allow them to get back into your workforce?
We also ask the obvious questions:
- Do you always have to fire the replacement worker when you return the injured worker to his/her job with accommodation?
- In the alternative, is the injured worker on TTD entitled to priority in being rehired to allow for reasonable accommodation without having to fire someone?
Other pertinent questions that arise include what an HR department should do when and if:
- The injured worker is off for the entire autotermination period and doesn’t request accommodation until after they have been terminated;
- The injured worker who is fully recovered to MMI during the autotermination period and then aggravates the injury at a later time, again losing substantial time from work;
- A union employer is more than willing to accommodate an employee who is ready to return to work before or after the autotermination period has run but the applicable union or their interpretation of their union rules won’t allow it;
- An employee is off for multiple reasons, some of which are related to injury and some of which are wholly personal and unrelated to the work injury.
One “solution” to this problem is to maintain the status quo, sort of. First, autoterminate everyone consistent with your current policy that isn’t suffering from a claimed work injury. Second, for those with pending workers’ compensation claims, if they ask for accommodation to return to work prior to the running of the autotermination period, actively address the request and keep careful records of both the request and your decision(s) on reasonable accommodation. Third, for injured workers with pending workers’ compensation claims who don’t request accommodation during the autotermination period, when your autotermination period is over, don’t terminate; put them on “inactive” or leave of absence status, pending further action. If such injured workers later request reasonable accommodation due to their work injuries, consider the request, confer with your defense counsel and take whatever action necessary to avoid running afoul of the ADA. If they don’t seek reasonable accommodation, at some distant point, take them off the inactive or leave of absence status.
The other concept EEOC v. Sears, Roebuck will greatly encourage is the coincidental general release/resignation. We are already seeing many companies that will not enter into lump sum settlement agreements unless and until the injured worker coincidentally resigns at the time they depart your organization. To present, we feel such documents have not been exhaustively challenged in the courts by the EEOC or other similar state agencies and we hope they leave it alone and do not start raising challenges. If you need our sample coincidental release/resignation, send a reply.
We are certain this article and the consent decree will create intricate issues for all of us moving forward. As we outline, we are hoping the EEOC has some answers or guidelines on these issues and any further inquiries our readers would like to send along. Please forward your thoughts and comments and questions for the federal regulators.
