Keefe, Campbell & Associates, LLC

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:

1. The injured worker is off for the entire autotermination period and doesn’t request accommodation until after they have been terminated;
2. 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;
3. 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;
4. 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.

Editor’s comment: If you have an auto-termination policy for extended absence in place, please read this article!  Please also note this settlement is just what it is; a settlement by the EEOC of a claim against a major U.S. retailer—it isn’t a ruling by a trial or appellate court. However, the settlement indicates the U.S. Government’s anti-business HR-busters are now probably going to be attacking auto-termination policies for anyone who uses them. If you have such a policy in place, we are happy to counsel you on how to best modify it. We caution the worst thing that can happen to an HR department is to be sued by the federal government with their unlimited legal budget.

You can also share the groans of all HR folks to see the settlement fund demanded from Sears is $6.2 million dollars. We consider that absolutely preposterous in light of this new and unprecedented interpretation of the Americans with Disabilities Act by the EEOC. Please also note what Sears was doing was fully sanctioned under Illinois law by the Illinois Supreme Court in their ruling in Hartlein v. Illinois Power.

Auto-termination policies based on extended absence have been in vogue in the HR arena for several decades. The idea is to terminate folks who are off work and out of your work force for months and years on a fully neutral basis—duration of absence only. The concept is that a worker who isn’t at your workplace for a long enough time has to be let go, regardless of the reason. The focus is on neutrality in terminating them.

The problems with a fully “neutral” termination policy are multifaceted. What do you do about a hero? What if you have a worker who risks his/her life and saves five co-workers in a fire and is badly burned? Can you still terminate them if they are off work for a lengthy period of time but later fully recover? The public relations impact of such a termination could be disastrous.

In light of the “hero” model, our focus on such programs is to recommend a management-labor panel review all such individuals and see what the best overall approach might be for your company. You shouldn’t impose a hard and fast line but should have an overall focus of keeping your business competitive while adjusting to the hopefully rare exception to the rule.

In EEOC v. Sears, Roebuck & Co., the consent decree focuses on the disparate impact auto-termination policies might have on workers’ compensation claimants. The U.S. Equal Employment Opportunity Commission obtained a record-setting consent decree resolving a class lawsuit against Sears under the Americans with Disabilities Act for $6.2 million and significant remedial relief. The suit alleged Sears maintained an inflexible workers’ compensation leave exhaustion policy and terminated employees instead of providing them with requested reasonable accommodations for their disabilities, arguably in violation of the ADA.

EEOC Chicago District Director John Rowe said the case arose from a charge of discrimination filed with the EEOC by a former Sears service technician, John Bava. According to Rowe, Bava was injured on the job, took workers’ compensation leave, and, although remaining disabled by the injuries, repeatedly attempted to return to work. Sears followed its policy and did not provide Bava with a reasonable accommodation which would have put him back to work and, instead, fired him when his leave expired. Pre-trial discovery in the lawsuit revealed numerous employees had taken workers’ compensation leave and were terminated by Sears without seriously considering reasonable accommodations to return them to work while they were on leave, or seriously considering whether a brief extension of their leave would make their return possible.

The EEOC outlined inflexible leave policies which ignore reasonable accommodations making it possible to get employees back on the job cannot survive under federal law. In addition to providing monetary relief, the three-year consent decree includes an injunction against violation of the ADA and retaliation. It requires Sears to amend its workers’ compensation leave policy, provide written reports to the EEOC detailing its workers’ compensation practices’ compliance with the ADA, train its employees regarding the ADA, and post a notice of the decree at all Sears’ locations.

We are confident the issues in this case focused on the monster cost of defending EEOC charges and the unbelievably high rates some defense firms charge. If you want more reasonably priced employment law counsel or seek a copy of the consent decree, send a reply.

Editor’s comment: If you are a risk, health or safety manager and haven’t heard of EFCA, please send a reply. In short, it will allow unions to start card-campaigns to organize U.S. employers and signals the end of traditional organizing elections. Our current President has announced his intention to sign the bill when it hits his desk. Some observers feel this may cause union ranks to double or triple in the coming years.

However, EFCA is not the only concern. In addition to EFCA, there is the Respect Act which will limit management’s ability to exclude supervisors from bargaining units. Along with EFCA and the Respect Act, there will be an opportunity for an Obama-controlled NLRB to reverse numerous pro-employer board precedents.

Here are some of the NLRB decisions currently in question:

1. Harborside Healthcare: Supervisors Soliciting Authorization Cards

Current law reversed a series of older board decisions. These decisions held solicitation of union authorization cards by employees who are later determined to be supervisors is not objectionable if the supervisor’s actions were not threatening or intimidating. The most recent NLRB held, absent mitigating circumstances, solicitation of an authorization card by a supervisor has an “inherent tendency” to coerce the employee solicited and therefore the challenging employer does not have to establish that the supervisor engaged in coercive conduct.

The Harborside Healthcare decision posed a significant problem for union organizers in that it is often unclear during an organizing campaign whether an employee is a statutory supervisor or not. It is expected an Obama-controlled board will reverse the decision at the first opportunity.

2. Register Guard: E-mail Solicitation

The previous NLRB held employers have a basic property right regarding e-mail systems and are entitled to promulgate and enforce blanket “business only” e-mail policies.

The Board went further and adopted a stricter standard for determining when an employer has discriminatorily enforced its “business only” e-mail policy against union-related solicitation. The Board majority chose to adopt the analysis of the U.S. Court of Appeals for the Seventh Circuit instead of existing Board precedent which effectively did not allow the employer to distinguish between charitable and noncharitable solicitations, or solicitations of a personal nature as opposed to solicitations for an organization.

We expect the holding in Register Guard to be reversed fairly quickly, given many cases presented to the NLRB contain allegations of discriminatory treatment by the employer.

3. Dana Corp.: Voluntary Recognition

The previous NLRB reversed earlier precedent that stood for forty years and held an employer’s voluntary recognition of a labor union did not bar a decertification or rival union petition filed within 45 days of the notice to employees of the voluntary recognition. This may have been the most unpopular NLRB decision for labor because it undermined neutrality/card check and voluntary recognition agreements unions increasingly used as a major organizing device in lieu of filing petitions for election. In addition, the Dana Corp. decision flies in the face of the proposed EFCA legislation. Essentially, EFCA proposes to replace Board elections with card check recognition. If EFCA passes in its current form and Dana Corp. is still standing, Dana Corp. would provide a method for employers to get the election EFCA is designed to abolish. Either way, it is expected that the first challenge to this 45-day rule to come before the new Board will result in reversal.

4. Crown Bolt: Threat of Plant Closure Not Presumed Disseminated Throughout Plant

Crown Bolt held an employer’s threat to close its facility if employees voted for the union will not be presumed disseminated throughout the bargaining unit. The ruling overruled another precedent which held that all plant-closing threats are presumed disseminated throughout the plant. Threats of plant closure have traditionally been considered the most severe form of coercion of employees’ right to organize, so it is predicted the earlier presumption will be restored.

5 Lutheran Heritage Village-Livonia: Work Rule Prohibiting “Abusive Profane” Language

The NLRB set forth new rules for determining whether a work rule is unlawful, requiring a showing of one of the following:

• The employee reasonably construed the work rule to prohibit or restrict protected activity,
• The rule was promulgated in response to union activity, or
• The rule had been applied to restrict the exercise of protected rights.

Applying their own test, the majority held the employer’s rule prohibiting “abusive or profane” language was lawful because it would not reasonably be interpreted by employees to prohibit protected activity.

6. Brevard Achievement Center: Disabled Workers in Rehab Settings are Not Employees

This case held disabled workers in a primarily rehabilitative relationship with their employers are not statutory employees, even though the disabled workers work the same hours, receive the same wages and benefits and perform the same tasks under the same supervisor as the nondisabled employees. The prior Board did not reverse precedent in this case, but the dissent labeled the majority decision as “bad policy” and complained that “it means that the employer’s disabled workers have no protection under the Act.”

Given the fact that Congress has already strengthened the Americans With Disabilities Act (ADA), expanding protections to disabled workers effective in January 2009, it is likely the new NLRB will reverse Brevard when it gets the opportunity.

If you have questions or concerns about continuing changes in your workplace, please send a reply.

Editor’s comment: For those of you who haven’t heard, they have greatly expanded the Americans with Disabilities Act under a new statutory scheme called ADA Amendments Act or ADAAA. It will be almost impossible to avoid the ADAAA requirements of “reasonable accommodation for qualified individuals with a disability” in the future.

Please note the new federal ADAAA is going to make it crucially important to understand the capabilities of your workers, particularly if they have disabilities that require accommodation. We assure you they won’t “give you a break” on workers’ comp benefits if a disabled worker exceeds their limitations and becomes injured. A pre-employment strength testing service has been created to screen applicants for pre-existing physical conditions. For any employer whose employees will be undertaking physical activities on a daily basis, knowing whether or not an applicant is able to handle the stress of the job can save an employer energy, time and money.
As a result of extensive risk management analysis, The Horton Group, an Orland Park-based insurance and risk management company, has created a strength testing service that can help businesses determine the physical well-being of prospective and/or current employees.
“You can imagine, hiring your next work comp claimant is a fear of every employer, specifically any employer that is taking on any level of self insurance for this line of coverage,” said Ken Olsen, Horton’s president of employee benefit services. “So we created ways for an employer to be assured that the new applicants coming in or the new hire they’re making are going to add to the workforce in a positive way.”
Network Safety Consultants (NSC), The Horton Group’s safety consulting firm, learned about the technology three years ago and soon formed a partnership with Cost Reduction Technologies, an industry-leader in isokinetic testing, said Gary Glader, president of NSC. “As soon as we became aware of the technology, we quickly realized the benefit this would bring to employers,” he said. The process begins when a business owner contacts NSC concerning a prospective employee. NSC then surveys the location of the client company to assess the physical demands of that particular job.
“We go out and make observations of the work being done and we actually put numbers to the work that’s being done, in terms of how much weight is lifted and the frequencies at which those weights are lifted,” said Glader. Once the data from the job site is collected, NCS sends the information to its technology partner, which then generates a body index score that is a baseline number by which the applicant will be judged. Harder work is given a higher number and vice versa. After that, the job applicant takes the test. The test is performed on an isokinetic machine, which feeds data into a computer. The machine is similar to those found in a typical gym, yet is created specifically to test the shoulders, knees and back.
Exams are conducted identically for each participant, testing the extension and flexion of the three body parts. The applicant performs five repetitions at each station, at the weight corresponding to the body index score. The test is conducted at Horton’s Orland Park facility and takes approximately 15 minutes. The data from the applicant’s exam is sent directly to the employer, who can then decide whether or not that person will meet the physical demands of the job. The cost of the process is around $150. The unique advantage of the test is that the data can be used as a baseline to measure the extent of post-employment injuries that may occur. An employee who has a workers’ compensation claim performs the strength testing after the supposed injury so an employer can be sure as to the validity of the claim.
“It has occurred before where an employee who claims an injury has taken the test and the score is stronger than the original test,” Glader said. “The argument then becomes, ‘what’s the injury?’” Situations like these can prevent an employer from incurring unnecessary costs as a result of a false claim. The results of the strength testing service have proved that many candidates are not in good enough physical condition to handle the demands of the position they are applying for. “I think the best feedback I can give is in the number of applicants that we’ve actually rejected for the jobs,” said Glader. “Out of the three dozen tests we’ve conducted so far, we’re rejecting about one out of every five applicants.”
The program is one of the many initiatives Horton has in place to help small and mid-sized business owners prevent losses of time and money through unnecessary workers’ compensation claims. “We know that early detection is one of the best ways to reduce cost and the amount of absenteeism that might be created out of waiting until the last minute to treat a particular injury,” Olsen said. “If the information that comes from these reports can be beneficial in getting them to act earlier with some physical therapy to deal with an injury versus waiting until a serious episode, we might be able to reduce costs.”

Companies utilizing the service have built a reputation of being serious about hiring qualified candidates for the job. Proof of this is in the number of applicants who have failed to show up for the test. “They obviously understand that they perhaps were not as open about something that they might have been in an earlier process,” said Olsen. “The strength testing will fish that out.”

This article was initially researched and drafted by Jeremy Stoltz of the Business Ledger and we added the ADAAA information. Please reply with your thoughts and comments.

Editor’s comment: To succeed on a claim under the old ADA, a Plaintiff must establish he/she is

a) “Disabled,”

b) Qualified to perform the essential function of the job either with our without reasonable accommodation, and

c) Suffered an adverse employment action because of the disability.

In Equal Employment Opportunity Commission (EEOC) v. Lee’s Log Cabin, Inc., (No. 06-3278 October 6, 2008), the EEOC (Plaintiff), on behalf of an HIV-positive female job applicant, sued Defendant due to the latter’s refusal to hire the applicant as a waitress. The applicant applied for the waitress position in 2004. She was 18 years of age and had been born with HIV. On the job application she apprised Defendant of her lifting restriction of 10 lbs. She further noted on the application this restriction could not be accommodated. The applicant knew from the job description Defendant’s wait-staff was required to lift between 25 and 30 lbs. multiple times during a shift. The parties disputed whether the applicant later told Defendant’s assistant manager her restriction was temporary.

The applicant returned to Defendant’s restaurant one month later and asked to revise her application. The assistant manager retrieved the application at which time the applicant saw “HIV+” written on the front. The assistant manager acknowledged he made the notation. He further explained the store owner made the hiring decisions. The store owner later testified he did not hire the applicant because she was unable to lift more than 10 lbs. and had no prior waitressing experience.

The EEOC filed suit alleging Defendant violated the American with Disabilities Act (ADA). This was the applicant’s second lawsuit in three years. In the first suit she alleged her employer fired her when it learned she was HIV positive. In the first suit the EEOC reached a settlement on her behalf.

Defendant filed a motion for summary judgment. Subsequently, the EEOC filed affidavits from the applicant and her physician which discussed how “AIDS” or “HIV/AIDS” affected her life activities. This was the first time the applicant alleged she actually had AIDS. The EEOC presented no evidence on how being HIV-positive alone affected the applicant. In addition, the EEOC submitted the physicians’ affidavit in violation of the District Court’s pre-trial order because it had failed to disclose the physician as its expert.

The District Court granted the motion for summary judgment. It held HIV and AIDS are not synonymous and the EEOC’s eleventh hour attempt to shift the factual basis of its claim came too late. Therefore, it disregarded the affidavits. The District Court held the EEOC’s failed to present evidence which showed HIV affected any of the applicant’s major life activities and thereby failed to make a threshold showing that her HIV-positive status met the statutory definition of “disability.” Finally, the District Court held there was no showing Defendant knew the applicant suffered from AIDS and it was “questionable” whether the applicant was a qualified individual under the ADA. Plaintiff appealed.

The Seventh Circuit noted the ADA prohibits discrimination against a qualified individual with a disability because of the disability. It noted further whether an individual has a disability under the ADA is an individual inquiry. The Seventh Circuit found the EEOC failed to explain why it waited until its response to summary judgment to disclose the applicant had AIDS “and that this was the actual basis for the discrimination alleged.” Thus, the Seventh Circuit held the District Court had not abused its discretion in disregarding the affidavits submitted by the applicant and her physician. Thus, the record was silent on the effect of HIV on the applicant’s life activities and the District Court necessarily concluded the EEOC failed to make a threshold evidentiary showing of a disability within the meaning of the ADA.

The Seventh Circuit also addressed whether the applicant was a “qualified individual” under the ADA. It found she was not. The Seventh Circuit found a “qualified individual” is one “with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires” and must also “satisfy the requisite skill, experience, education and other job-related requirements of the employment position.” In the present case the applicant informed the Defendant in her own job application she was unable to lift over 10 lbs. and further advised Defendant her restriction could not be accommodated. In addition, the applicant knew the position required lifting more then 10 lbs. Thus, summary judgment in favor of the Defendant was appropriate.

We note this ruling may be impacted when the ADAAA goes into effect on January 1, 2009. This article was researched and crafted by Matthew A. Wrigley, J.D. Please direct your thoughts and comments to Matt at mwrigley@keefe-law.com.

Editor’s comment: We truly hate federal legislation in the human resources field. Everything about it seems to be over-regulation and stuff only fussy lawyers and accountants would like. We hated the passage of the Americans with Disabilities Act and now there is a new permutation we consider completely comical, beginning with the silly name “ADAAA.” Please understand it has been signed by our permanently grinning President and will become law on January 1, 2009. We assure you it was written by the same zealots that brought us the original statute and they get mad when they don’t get their way. We consider truly silly the legislative provision requiring judges to follow the other new legislative provisions.

The ADAAA is purportedly compromise legislation that was drafted by several employer and disability advocacy groups. Numerous national associations were asked by House leaders in early 2008 to negotiate such legislation to the original ADA Restoration Act which would have dramatically changed the definition of “disability” to simply mean “a mental or physical impairment.”

The purpose of the ADA Amendments Act is to legislatively “overturn” or overrule several Supreme Court and lower court decisions such as Sutton and Toyota of Tennessee over the past decade that some folks feel limited the ADA’s coverage based on its initial statutory construction and intent. However, the ADAAA also will leave intact the first prong of the disability definition language, so that a person will still need to show that he/she has a physical or mental impairment that “substantially limits” one or more of his/her major life activities in order to be protected under the ADA.

While the first prong of the disability definition will remain the same, the most significant changes to current law contained in the ADA Amendments Act are as follows:

• Excludes Consideration of Mitigating Measures – The ADAAA will prohibit consideration of mitigating measures in determining whether an individual has a disability, with the exception of ordinary eyeglasses and contact lenses. In other words, employees will be evaluated without regard to the hearing aids, medication, prosthetic devices and other measures they use to manage their impairments.

• Expands the Definition of “Regarded As” Prong – The ADAAA will provide that an individual is “regarded as” having a disability if the employee establishes that he/she has been discriminated against because of an actual or perceived physical or mental impairment. This new provision ensures that people who are fired or suffer other adverse employment actions because they are regarded as disabled can prevail if they prove that they were discriminated against. However, the “regarded as” prong would not apply to transitory and minor impairments where the impairment is expected to last less than six months. The legislation also makes clear that employers will not be required to provide a reasonable accommodation to individuals that are regarded as disabled.

• Establishes New List of Major Life Activities – The ADAAA will introduce a new, non-exhaustive list of major life activities that will now include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. For the first time, major life activities will also include the operation of major bodily functions, including functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.

• Broadens construction – The ADAAA will establish a new rule of construction emphasizing the importance of the findings and purpose language in the bill by directing courts to interpret the definition of disability consistent with those provisions.

• Authorizes regulations – The ADAAA explicitly authorizes the U.S. Equal Employment Opportunity Commission and the Departments of Justice and Transportation to issue new regulations.

Yes, there will be lots of litigation to interpret the new legislation. Yes, lots of lawyers will make lots of money in those efforts. Yes, U.S. business will continue to struggle with all of this over-regulation and fussiness. And we can’t truly blame this solely on the Democrats when a Republican President happily signed it. Yes, we hope all U.S. business doesn’t end up in “Chi-India.”

On Tuesday, October 8, 2008 the Labor and Employment Law Committee of the Chicago Bar Association will be sponsoring an hour-long presentation on the ADAAA. Speakers include Barry Taylor and Alan Goldstein of Equip for Equality, whose website may be found at www.equipforequality.org. MCLE credit is available for CBA members who attend. The presentation will commence at 12:15 p.m. at the CBA Building located at 321 South Plymouth in Chicago.

Please do not hesitate to reply with thoughts and comments about this blurring new federal ruling.