Rigid Disability Leave Policy Results in $2 Million Settlement

Inflexible disability leave policies that fail to assess the individual needs of the employee can lead to liability, as a recent $2 million settlement demonstrates. This settlement resolves a nationwide disability discrimination lawsuit filed by the Equal Employment Opportunity Commission (EEOC).

The lawsuit charged that a large international package delivery company had a rigid leave policy: The company allegedly fired disabled employees automatically when they reached 12 months of leave, without engaging in the interactive process required by the Americans with Disabilities Act (ADA).

“The ADA requires companies to make a real effort to work individually with their employees with disabilities to provide them with the necessary and reasonable accommodations that will allow them to do their jobs,” said Greg Gochanour, regional attorney of the EEOC’s Chicago District Office, in a statement.

Simply providing a long leave of absence is not enough; company policy must also be flexible enough to work with disabled employees who can return to work but need a reasonable accommodation, added Julianne Bowman, the EEOC’s Chicago District Director.

California law has the same principles. Under the Fair Employment and Housing Act, an extended leave may be a reasonable accommodation if the leave is “likely to be effective in allowing the employee to return to work at the end of the leave…” (2 CCR sec. 11068(c)). An extended leave as a reasonable accommodation may even be beyond what the employee might be entitled to under the Family and Medical Leave Act, the California Family Rights Act or the employer’s own policy. This, however, does not mean you have to provide an indefinite leave of absence (2 CCR sec. 11068(c)).

If an employee needs a reasonable accommodation when he/she returns from leave in order to perform his/her essential job duties, you should engage in the interactive process with the employee. As this settlement demonstrates, it is not okay to simply have a blanket policy saying that you will be terminated at the end of a set period of leave and not engage in the interactive process at all.

Similarly, a settlement from earlier this year highlights another common mistake: Employers cannot require employees to be 100-percent healed before returning to work after an injury. Such policies also violate the duty to accommodate.

Review your company policies to make sure that they do not contain disability leave policies that put a set time limit or rigid return to work requirements. Of course any accommodation granted should be “reasonable” and allow the employee to perform the essential functions of the job. What is “reasonable” and doesn’t pose an undue hardship for one employer may not be reasonable for another. Review each request and base your determination on the specific circumstances. Always consult an attorney if you have any questions.

CalChamber members can read more on Reasonable Accommodation in the HR Library. Not a member? See how CalChamber can help you.

Staff Contact: Gail Cecchettini Whaley