The Supreme Court Rules on Disability

The United States Supreme Court issued several important employment decisions this term. We have summarized those most affecting private employers.

I. We Are Not All Disabled

You already know that under the Americans with Disabilities Act, (ADA), a person is disabled if the person has a physical or mental impairment that substantially limits a major life activity, such as seeing, hearing, or working. In long awaited rulings, the Supreme Court resolved a highly disputed issue about whether such disability is determined with reference to measures that lessen impairment (eyeglasses, hearing aids, blood pressure medicine, insulin, and so forth). If so, then a person who is very nearsighted but sees fine with glasses, for example, would not be disabled. The plaintiffs in both Sutton v. United Air Lines, Inc. and Murphy v. United Parcel Service, Inc., had physical impairments which were corrected with glasses in one case and blood pressure medication in the other. Despite the corrections, each plaintiff claimed that he or she should be evaluated for disability under the ADA without regard to those corrective measures.

The Court disagreed, holding unequivocally that if a person is taking measures to correct for, or mitigate, a physical or mental impairment, the effects of those measures, both positive and negative, must be taken into account when judging whether that person is substantially limited in a major life activity.

These cases may limit your exposure to ADA claims by employees who use corrective devices if such devices "cure" the limitation. Keep in mind that you must also be aware of any negative effects of such corrective devices which might create an additional or separate claim of disability. For example, a plaintiff may take medication to control blood pressure, so that he is not disabled in that regard, but the medication has some other negative effect on him, such as a heart murmur. That condition may create another potential disability. The Court also clarified two other issues. First, the Court stated that even under the so-called "regarded as" prong of the definition of disability, the plaintiff must still show that the employer regarded him or her as having a physical or mental impairment that substantially limits some specific major life activity. Second, the Court ruled that a plaintiff is not substantially limited in the major life activity of working unless he or she is "unable to work in a broad class of jobs." This means that one must be precluded from "more than one type of job, a specialized job, or a particular job of choice." The Court held that if jobs utilizing an individual's skills (but perhaps not his or her unique talents) are available, or if a host of different types of jobs are available, one is not unable to work in a broad range of jobs.

The Court's gloss on what it means to be substantially limited in the activity of working is significant for employers because it differs somewhat from the standards stated in many lower court decisions relying on Equal Employment Opportunity Commission ("EEOC") guidelines. The Court's language should now make it somewhat more difficult for plaintiffs to prove they are substantially limited in the major life activity of working, or are regarded as such. The third case dealing with determining disability is Albertsons, Inc. v. Kirkingburg. In that case, the Court held that even corrective measures made by the individual's body must be considered in determining disability. For instance, in this case the employee made subconscious adjustments to compensate for his vision problem, employers may require as a job qualification that an employee meet federal safety regulations. This case was made more complicated by the fact that under the federal safety regulation in question, an employee could apply for a waiver based on his own unique circumstances (driving record, etc.). However, the regulatory record made it clear that the waiver program was merely a federal agency's experiment with safety, the results of which would provide a basis for keeping or changing existing safety regulations. Under these circumstances, the Court concluded that the employer could still rely on the general regulation, and did not have to show that the employee would have actually posed a direct threat to others.

II. A Person On Disability Benefits May Not Be Unqualified To Work

The Court also addressed the interplay between an employee's representation on a social security application that she is unable to work due to disability, and a simultaneous claim under the ADA that she is a "qualified individual with a disability". In Cleveland v. Policy Management Systems Corp., the employee suffered a stroke and took leave from work. During that leave, she filed an application for Social Security Disability Income (SSDI) benefits. She told Social Security she was disabled and unable to work. She then returned to work, but was terminated three months later. She then told Social Security she was terminated "due to my condition" because she "could no longer do the job". Benefits were granted. In her ADA lawsuit the employee then claimed she was not given the reasonable accommodation the ADA requires. The company countered that her own claim to Social Security proved she was unable to work, so as a matter of law she could not sue under the ADA. The Supreme Court rejected the Court of Appeals holding that applying for or receiving social security benefits creates a rebuttable presumption that the person is judicially estopped from arguing that she is a "qualified individual with a disability."

Instead, the Court held that no "special negative presumption" should apply to a possible discrepancy between the social security application and the employee's ADA claim, because there are enough situations in which an SSDI claim and an ADA claim can comfortably exist side by side. For instance, Social Security does not recognize the duty of reasonable accommodation an employer might have, and instead it applies a series of its own presumptions about who is disabled, so the SSDI process does not match the ADA standards in many cases.

However, the Court noted a plaintiff has the burden to prove her case, and one element is to prove she is a "qualified individual with a disability". A sworn statement in a disability application that she is "unable to work" must be answered by a "sufficient explanation" for the plaintiff's claim to survive a summary judgment and go to trial.

Ms. Cleveland explained that her ADA claim rested on the reasonable accommodation her employer could and should have provided her, which was not part of her Social Security process. The Court accepted this explanation as sufficient, and sent the case back for a trial.

Final Word:

Statements by employees on applications for private disability insurance or for SSDI benefits may provide important evidence for an employer defending an ADA claim. The particular facts of the disability application, the plaintiff's inability to work and ADA standards must be considered and compared.

III. Avoiding Punitive Damages

The Supreme Court also established guidelines for determining whether an employer must pay punitive damages under Title VII. Before 1991, an employee could only be awarded equitable remedies, such as back pay. However, the 1991 amendments to the Civil Rights Act allow some employees the opportunity to collect compensatory and punitive damages for discriminatory action by an employer.

Punitive damages are meant to punish an employer rather than compensate an employee for any particular loss. In Kolstad v. American Dental Assn., the Court addressed when an employee might be entitled to punitive damages:

  • the employee must show that the discrimination was intentional. Intentional discrimination occurs when the employer treats some people less favorably than others because of a protected characteristic. Punitive damages will not be available in cases where the employee claims only "disparate impact" discrimination - that is, where the employee claims that a facially neutral policy affects one class or group more harshly than another.
  • the employee must show that the employer's intentional discrimination was malicious or with reckless indifference to the employee's right to be free from discrimination. Malice and reckless indifference both refer to the employer's knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination. For instance, punitive damages may NOT be available where an employer discriminates with the belief that discrimination is lawful (such as where the underlying theory of discrimination is new or poorly recognized, or where the employer reasonably believes its discrimination satisfies a bona fide occupational qualification or other statutory exception to liability).

If the employee is able to show intentional discrimination with malice or reckless disregard of his rights, the next question is who is responsible for the discrimination. The Supreme Court recognized that holding an employer responsible for discriminatory actions by its supervisors or agents is not always fair, especially when the employer has made a good faith effort to comply with Title VII. The Court expressed concern that awarding punitive damages against an employer when an employee is discriminated against by a supervisor or agent without the employer's knowledge would risk penalizing employers who have educated themselves about discrimination and implemented anti-discrimination policies. For these reasons, the Court concluded that an employer will not be liable for the discriminatory acts of its agents, usually managers or supervisors, when those people take discriminatory action that is "contrary to the employer's good- faith efforts to comply with Title VII."

Final Word:

The Court's holding emphasizes the importance of demonstrating a good-faith effort to comply with Title VII. Some steps toward that effort include:

  • creating a policy against discrimination, making that policy known to all employees, through, for example, the handbook, company meetings, postings or other means, and educating employees on its meaning and intent;
  • training supervisors to recognize discriminatory conduct and to enforce your anti-discrimination policy;
  • addressing all claims of discrimination in a prompt and fair manner.
Your ability to show that you have and enforce such a policy may insulate you from punitive damage awards for discrimination by a supervisor or other agent.