Employment Law Alert: 1999

U.S. Supreme Court Limits the Breadth of the Disability Act's Coverage, but Broadens the Reach of Punitive Damage Awards

On June 22, 1999, the United States Supreme Court issued four decisions that significantly impact the scope and application of federal anti-discrimination laws. Three of the decisions focus on what is considered a "disability" under the Americans with Disabilities Act ("ADA"). The fourth decision identifies the circumstances under which punitive damages may be awarded against employers in discrimination cases under the Civil Rights Act of 1991.

Mitigating Measures Must Be Considered in Evaluating the Severity of an Employee's Impairment Under the ADA

The ADA was enacted in 1990 in an effort to prohibit discrimination in employment and public accommodations against qualified individuals with a disability. To be covered under the ADA an individual must have a "disability." The ADA defines "disability" as a "physical or mental impairment that substantially limits one or more . . . major life activities." Thus, the Act's coverage does not extend to any and all illnesses and injuries; rather it only covers those impairments that significantly impact an individual's daily functions and actions.

What if an individual has an impairment that substantially limits a major life activity, but is able to moderate its effects through the use of corrective measures, such as wearing eyeglasses for poor eyesight, or taking medication for hypertension? Is such a person still considered "disabled" under the ADA?

The Supreme Court, in Sutton v. United Airlines, Inc. and Murphy v. United Parcel Service, Inc., answered this question with a resounding "NO." The Court held that the effect of measures used to mitigate the impairment must be taken into consideration in determining whether an individual is actually disabled under the ADA. As a result, the Court explained that extent of a person's impairment should be evaluated on an individualized basis, and only those limitations actually experienced by the individual should be considered in determining whether s/he is entitled to protection under the ADA.

In applying this standard, the Court rejected the claims of two near-sighted pilots whose vision is normal when wearing corrective lenses, and a truck mechanic whose high blood pressure is controlled by medication. The Court emphasized that as a result of such corrective measures, these individuals are not actually disabled, since their impairments do not substantially limit any major life activities.

The Court, in reaching its conclusion, specifically rejected the interpretative guidelines previously issued by the Equal Employment Opportunity Commission and the Justice Department. These federal agencies had taken the position that employers should ignore the mitigating effects that corrective measures may have on an individual's impairment in assessing whether an employee or applicant is disabled under the ADA and thus, whether the employer is required to reasonably accommodate the individual.

In rejecting this position, the Supreme Court explained that if the effect of corrective measures is ignored, the result would be to broaden the scope of the ADA far beyond that ever intended or envisioned by Congress. For example, the Court noted that an estimated 160 million Americans suffer from conditions that impair their health or normal functional abilities. Many of these conditions, however, are resolved through corrective means. By contrast, in passing the ADA, Congress observed that the Act's provisions were intended to extend to the 43 million Americans who suffer from physical or mental conditions. These persons were described by Congress as a "discrete and insular minority" who have been "subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society." In a concurring opinion, Justice Ginsberg noted that "persons whose uncorrected eyesight is poor, or who rely on daily medication for their well-being can be found in every social and economic class; they do not cluster among the politically powerless, nor do they coalesce as historical victims of discrimination."

The plaintiffs in both Sutton and Murphy also were found not to have been substantially limited in their ability to work. The Court noted that a person may be unlawfully discriminated against under the ADA if the restriction imposed by the employer disqualifies the individual from an entire class of jobs or a broad range of jobs in various classes. In these cases, the restrictions imposed by the respective employers only precluded the plaintiffs from working in a specific, limited job, and thus, did not violate the ADA.

The Imposition of Job-Related Criteria that Exclude Impaired but Non-Disabled Individuals Is Not Unlawful Under the ADA

An individual who is not "disabled" because s/he does not have a substantial impairment of a major life function, nevertheless, may be protected by the ADA if his/her employer or potential employer perceives or regards him/her as being disabled, and, consequently, discriminates against the individual on that basis. In Sutton the pilots argued that by imposing a requirement that all global pilots have uncorrected vision of at least 20/100 or better, United Air Lines regarded them as being disabled, and thus, violated the ADA when it refused to hire them. Similarly, Murphy contended that UPS regarded him as disabled solely due to his high blood pressure, even though he could function normally when medicated.

The Supreme Court rejected the claims that these individuals were "regarded by" the employers as being disabled. Rather, the Court emphasized that the ADA, by its terms, "allows employers to prefer some physical attributes over others and to establish physical criteria." Accordingly, the Court observed that "an employer is free to decide that certain physical characteristics or medical conditions that do not rise to the level of an impairment -- such as one's height, build, or singing voice -- are preferable to others, just as it is free to decide that some limiting, but not substantially limiting, impairments make individuals less than ideally suited for a job."

Similarly, in the third ADA case decided on June 22, 1999, Albertsons Inc. v. Kirkingburg, the Supreme Court absolved an employer from any liability under the ADA when it refused to hire a truck driver with monocular vision. The employer had relied on federal vision standards to disqualify the driver. Kirkingburg, in turn, contended that such reliance was misplaced since he had obtained a waiver from these standards under the federal waiver program. The Court, nevertheless, held that the employer had a right to insist that its drivers satisfy the higher federal visions standards, and was not bound by the waiver program.

The Court, in all three cases, however, cautioned that employers must be careful to avoid making employment decisions based on either a mistaken belief that a person has a physical impairment that substantially limits one or more major life activities, or a mistaken belief that an actual impairment substantially limits one or more major life activities, when it does not.

Supreme Court Expands Plaintiffs' Right to Collect Punitive Damages in Discrimination Cases

In Kolstad v. American Dental Association, the Supreme Court held that a plaintiff need not prove that the employer engaged in egregious conduct to be awarded punitive damages in discrimination actions under the Civil Rights Act of 1991. Rather, the plaintiff must prove only that the employer's discriminatory actions were "intentional," by showing that it acted with malice or a reckless indifference to the plaintiff's federally protected rights.

The Court, however, created a "safe harbor" by providing that employers cannot be held indirectly liable for punitive damages based on discriminatory decisions made by its managers that are contrary to the employer's good faith efforts to comply with the anti-discrimination laws.

Under the Civil Rights Act of 1991, punitive damages are limited to cases in which the employer has engaged in intentional discrimination and has done so "with malice or with reckless indifference to the federally protected rights of an aggrieved individual." The Court held that the terms "malice" and "reckless" focus on the employer's state of mind. "The terms 'malice' or 'reckless indifference' pertain to the employer's knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination," the Court emphasized. As such, an employer must at least discriminate in the face of a perceived risk that its actions will violate federal law to be liable in punitive damages. The Court noted that if an employer was not aware of the relevant federal prohibition, or discriminated with the distinct belief that its discrimination is lawful, punitive damages would not be appropriate.

Further, to justify an award of punitive damages, a plaintiff must prove that the employer is vicariously liable for the malice or reckless indifference of its employee(s). The Court identified four situations in which damages properly can be awarded against an employer as a result of an act by its employee:

  • the employer authorized the doing and the manner of the act;
  • the employee was unfit and employer was reckless in employing him/her;
  • the employee was employed in a managerial capacity and was acting in the scope of his/her employment, or
  • the employer or a managerial agent of the employer ratified or approved the act.

Significantly, the Court expressed concern about imposing liability for punitive damages against an employer which has made a good faith effort to comply with the anti-discrimination laws. Recognizing Title VII "as an effort to promote prevention as well as remediation," the Court held that an employer may not be vicariously liable for punitive damages based on the discriminatory employment decisions of its managerial agents where these decisions are contrary to the employer's good-faith efforts to comply with Title VII.

Employers, therefore, may avoid punitive damages liability for the discriminatory actions of their managers if they have taken affirmative steps to prevent discrimination in the workplace. Such proactive actions include:

  • Adopting and disseminating strong anti-discrimination policies
  • Creating effective grievance mechanisms to investigate and address discrimination complaints
  • Promptly remedying discriminatory actions and behavior
  • Educating both supervisory and non-supervisory personnel on the nature, scope and meaning of the anti-discrimination laws, and the employer's commitment to compliance with these laws by all employees.

*article courtesy of Harriet E. Cooperman of Saul Ewing, hcooperman@saul.com.