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Fresh interpretation of ADA provision heightens demands on employers

September 12th, 2012  |  Sheryl Allenson

Under the Seventh Circuit’s freshly minted interpretation of the ADA, employers must reassign employees displaced by disability to a vacant position for which they are qualified, so long as the accommodation would be reasonable and absent undue hardship.

In EEOC v United Airlines, Inc, the appeals court overruled its earlier precedent, after determining that the U.S. Supreme Court decision U. S. Airways, Inc v Barnett undermined  EEOC v Humiston-Keeling. Reversing the district court’s decision, the Seventh Circuit remanded this case to determine if mandatory reassignment would be reasonable in the ordinary “run of cases” and if there were factual considerations specific to United Airline’s employment scheme that would render mandatory reassignment unreasonable in this instance

The case stemmed from United’s Reasonable Accommodation Guidelines, which addressed accommodations for an employee who, because of a disability, could no longer perform the essential functions of his or her current job even with accommodation. The guidelines stated that transfer to an equivalent or lower level position might be a reasonable accommodation. The transfer process was considered competitive, and therefore, an employee would not be automatically placed into a vacant position. Rather, he or she would be given preferential treatment.

Circuit precedent. The EEOC filed suit alleging that the policy violated the ADA, and after the case was transferred to the district court in Illinois, the court granted United’s motion to dismiss. Specifically, it ruled that binding precedent in the circuit held that a competitive transfer policy did not violate the ADA. The district court rejected the EEOC’s contention that the U.S. Supreme Court’s decision in U.S. Airways, Inc v Barnett undermined that ruling. Though the federal appeals court agreed that no Seventh Circuit case had overruled Humiston-Keeling, it found that decisions that followed that case after Barnett were in error.

Supreme Court speaks. Specifically, the Seventh Circuit reasoned that Barnett undermined the circuit precedent upon which the district court relied in rendering its decision. Though the Supreme Court explained that an employer’s showing of a violation of the rules of a seniority system would ordinarily be enough to show that an accommodation sought was unreasonable, it cautioned that it was not creating a per se exception for a seniority system, noting that employees remained free to show special circumstances that would warrant a finding that a requested accommodation was reasonable notwithstanding a seniority system.

After concluding that a preference system could not automatically show an accommodation was not reasonable, the Supreme Court outlined a two-step, case-specific analysis. “The ‘plaintiff/employee . . . need only show than an ‘accommodation’ seems reasonable on its face, i.e., ordinarily or in the run of cases,” the Seventh Circuit wrote, citing the Supreme Court. If the employee makes that showing, the burden shifts to the employer to “show special (typically case-specific) circumstances that demonstrate undue hardship in the particular circumstances.”

Another panel errs. Though another panel in the circuit had considered the impact of Barnett on Humiston-Keeling, the Seventh Circuit found that it was not properly interpreted; it was done in an abbreviated fashion and without briefing. In that case, the court incorrectly asserted that a best-qualified selection policy was essentially the same as a seniority system, a point with which this panel disagreed. “In equating the two, the Mays Court so enlarged the narrow, fact-specific exception set out in Barnett as to swallow the rule. While employers may prefer to hire the best qualified applicant, the violation of a best-qualified selection policy does not involve the property rights and administrative concerns (and resulting burdens) presented by the violation of a seniority policy.” Thus, based on Supreme Court precedent, the Seventh Circuit determined that the prior panel had erred when it suggested that deviation from a best-qualified selection policy always represented a hardship.

Drawing on this analysis, the Seventh Circuit found that the district court erred when it granted United’s motion to dismiss relying on Humiston-Keeling as binding precedent. “While we understand that this may be a close question, we now make clear that Humiston-Keeling did not survive Barnett.” Rather, the appeals court reversed and held that “the ADA does indeed mandate that an employer appoint employees with disabilities to vacant positions for which they are qualified, provided that such accommodations would be ordinarily reasonable and would not present an undue hardship to that employer.” The appeals court remanded the case with instructions for the district court to conduct the Barnett analysis.

What now? How does this change the landscape? Reassignment of a disabled employee to a vacant position is not discretionary. Hence, employers must be aware of vacancies when faced with a worker displaced  by disability, and must engage in an evaluation to determine whether that employee is qualified for any vacant positions. If the answer is affirmative, the employer must reassign the employee to the vacant position, so long as the reassignment is reasonable in the ordinary run of cases, and absent undue hardship.

  • Be aware of vacancies;
  • Evaluate employees’ qualifications to determine whether qualified for vacant positions;
  • Remember that reassignment to vacant position is not discretionary;
  • Consider whether reassignment is reasonable in ordinary run of cases, and whether there would be undue hardship caused by the reassignment.