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The Americans With Disabilities Act and Inflexible Leave Policies: A Recipe for Trouble?

White and Williams Labor and Employment Alert | July 21, 2012
by: Tanya Salgado

Employers confronted with real-world application of the Americans with Disabilities Act often find themselves stuck in a conundrum of competing issues, such as balancing leave administration policies against pressing business needs, as well as overlapping statutory schemes, such as the FMLA and state workers' compensation laws. One particularly thorny problem for employers involves an employee’s request for a leave of absence as a reasonable accommodation, particularly where FMLA has been exhausted, or does not apply. While it is recognized that a leave of absence can be a reasonable accommodation for an employee’s disability, the ADA does not specify how much leave is necessary. The question turns on how much leave would be reasonable under the circumstances, which will necessarily vary on the merits of each case. There is no “one size fits all” approach to be taken in determining the length of a leave of absence accommodation, in the context of the ADA. 

In the past, it was not uncommon for some employers, particularly larger ones, to attempt to simplify the issue by instituting a blanket policy which restricted the duration of all leaves of absence to a set time frame, perhaps 12 to 18 months. At the conclusion of the unpaid leave period, the employee would be automatically terminated, regardless of the particular circumstances. On the face of it, these employers appeared to be operating in a reasonable fashion since the leave policy applied to all employees, notwithstanding the reason for the leave. However, the Equal Employment Opportunity Commission (EEOC) has taken the position that such policies violate the Americans with Disabilities Act’s requirement of providing an individualized assessment regarding reasonable accommodations. The agency has successfully obtained substantial settlements in a number of lawsuits in the past few years in cases challenging inflexible leave of absence policies and other inflexible attendance policies. 

The first EEOC lawsuit challenging inflexible leave policies to hit the headlines involved Sears Roebuck & Co. Sears had a policy which provided for the termination of all employees upon the conclusion of workers' compensation leave, instead of providing disabled employees with reasonable accommodations for their disabilities. The Chicago district office of the EEOC filed an action in federal court alleging that the workers' compensation leave policy violated the ADA. While Sears disputed the EEOC’s allegations, the parties reached a settlement of $6.2 million, as well as remedial relief, which at the time was the largest settlement attained by the EEOC in a single lawsuit. The EEOC found fault with the Sears Roebuck policy because it claimed that the company inflexibly applied a leave limits policy without seriously considering the reasonable accommodation requirements of the ADA. 

The EEOC has gone on to file several actions challenging similar policies. In 2009, the EEOC filed an action against Supervalu Inc., alleging that the company violated the ADA by prohibiting disabled employees who were on a one-year paid disability leave from returning to work, unless they could return without any accommodation to full service. In addition, employees were terminated at the end of the one-year period, allegedly without any consideration given to whether the employee could return to work with a reasonable accommodation. The parties entered a consent decree in which the employer agreed to pay $3.2 million to the eligible claimants and revised its leave policy, among other things. The revised leave policy provided that the company must notify employees of the ability to request a reasonable accommodation to enable the employee to return to work prior to the conclusion of the company’s leave period. In addition, the company was required to inform employees that they are not required to be free of all restrictions in order to return to work.

In light of the EEOC’s stance on inflexible leave policies, and the numerous lawsuits resulting in substantial settlements, employers should review their leave policies and practices and take action to ensure they are in compliance with the Americans with Disabilities Act. Particular attention should be paid to attendance policies to ensure that they allow for reasonable accommodations. Remember, in applying the ADA, the EEOC’s position is that there is no room for the rigid application of a leave limit or attendance policy.

For more information regarding this alert, please contact Tanya Salgado at 215.864.6368 or  

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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