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Home » ADA » $3.2 Million Decree Reminds Employers: Leaves of Absence and ADA Accommodation Go Hand in Hand

$3.2 Million Decree Reminds Employers: Leaves of Absence and ADA Accommodation Go Hand in Hand

By Marti J. Cardi, Chief Compliance Officer, Reed Group

Many employers may treat their obligations under the Americans with Disabilities Act (ADA) as unrelated
to their management of leaves of absence because they are required under other laws or policies, such as the FMLA, company disability leaves, or workers’ compensation.

A recent settlement by the EEOC with supermarket/drugstore giant Supervalu, Inc., Jewel Food Stores, Inc., and related companies (Jewel-Osco) serves as a wakeup call for employers to build the ADA interactive accommodation step into all leave of absence management processes.

A federal judge has signed a consent decree ordering Jewel-Osco to pay a total of $3.2 million in settlement to 110 former employees. The employees were terminated in accordance with the company’s policy and practice of terminating employees with disabilities at the end of medical leaves of absence rather than bringing them back to work with reasonable accommodations. Jewel/Osco’s policy required employees to be 100% healed or recovered in order to return to work, rather than exploring options for employees to return to work with any type of reasonable accommodation.

Nonmonetary Equitable Remedies Also Ordered

The monetary award may only be the tip of the iceberg regarding consequences for Jewel-Osco. The consent decree (meaning that the company agreed to the terms of the court order rather than proceeding through litigation) also imposes significant nonmonetary obligations on Jewel-Osco:

  • Employees involved in making accommodation decisions must undergo training on the requirements of the ADA and the types of possible accommodations available to assist employees in returning to work.
  • The company will hire consultants to review and recommend changes to current job descriptions, ensure that the descriptions of the physical requirements of each job are accurate, and provide recommendations on possible accommodations for common disability work restrictions for various positions.
  • Jewel-Osco must report regularly to the EEOC on its efforts to accommodate employees with disabilities who are attempting to return from medical leaves of absence.
  • The company must revise its communications to employees with disabilities to assure them that they need not be completely recovered or healed at the conclusion of their leave of absence to be considered for return to work, and to advise them of possible accommodations that may be available.
  • Additional Impacts to Jewel-Osco’s Business and Bottom Line From Defending the EEOC Lawsuit:
  • Considerable disruption to Jewel-Osco’s operations as key and lower level personnel alike devoted time and energy to witness interviews, document production, depositions, etc.
  • Substantial costs and attorneys’ fees incurred defending the EEOC’s lawsuit and ongoing to ensure compliance with the consent decree. 

Beware of an EEOC Pattern

In addition to the Jewel-Osco case, the EEOC has entered into consent decrees in at least two other recent cases involving an employer’s practice of terminating employees following a leave of absence without engaging in the ADA reasonable accommodation process. In December 2010, United Airlines settled an EEOC case relating to its blanket policy against reduced hourly schedules for some positions.

Previously, United had required all reservation sales and services representatives who could not work their full bid schedules due to a disability to either retire or go out on extended leave, and then terminated them when their leave ran out. The EEOC contended that this practice, without considering whether reduced hourly schedules was a reasonable accommodation, violated the ADA.

United agreed to end this policy and practice, and to pay $600,000 to a group of affected reservations agents with disabilities. The decree is a three-year agreement, which means that United likely also has obligations under the decree to report to the EEOC during this period.

In late 2009 the EEOC settled a similar ADA lawsuit brought against Sears, Roebuck and Co. In that case the EEOC alleged that Sears had engaged in a practice of terminating employees following exhaustion of workers’ compensation leave, again without engaging in the interactive accommodation process. The EEOC charged that Sears denied its injured employees the ability to return to work by failing to consider workplace accommodations or even a slight extension of leave as an accommodation.

Like Jewel-Osco and United, Sears entered into a consent decree with the EEOC which included payment of $6.2 million to class claimants and significant remedial relief, including changing its policy, providing written reports to the EEOC to verify its compliance with the ADA, train its employees, and post a notice of the decree at all Sears locations.

Is Your Company at Risk?

Perhaps the next EEOC lawsuit could be against an employer who terminates employees upon exhaustion of FMLA leave rights without engaging in the ADA interactive accommodation process. Reed Group discussed the need to engage in this process in our blog article Following FMLA Leave, Don’t Forget The ADA Interactive Accommodation Process!

Reed Group Can Help
Employers should incorporate the interactive accommodation discussion into all leave of absence management procedures. Reed Group offers ADA accommodation management assistance alone or in conjunction with our other leave of absence management services. We can tailor our services to your company’s existing lawful policies and procedures and your company’s personality and culture. For more info, contact us.


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