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Class certification of ADA claim based on Union Pacific’s fitness-for-duty policy reversed

By Marjorie Johnson, J.D.

Since individualized determinations were necessary to determine whether the policy was consistent with business necessity, the district court improperly certified a class of all individuals who had been or would be subject to a fitness-for-duty exam under the policy.

A federal district court in Nebraska abused its discretion in ordering class certification of an ADA action brought by former Union Pacific employees challenging the railroad’s fitness-for-duty (FFD) program as an unlawful pattern or practice of discrimination used to systematically remove individuals with disabilities. Reversing, the Eighth Circuit held the individualized inquiries in this case could not be addressed in a manner consistent with Rule 23, since the determination of whether the policy was unlawfully discriminatory under the ADA could not be made without consideration of whether it was job related and consistent with business necessity as to each of the over 650 jobs at issue, as well as consideration of each employee’s individual circumstances, including their supervisor’s reactions to any functional job restrictions placed upon them (Harris v. Union Pacific Railroad Co., March 24, 2020, Gruender, R.).

Fitness-for-duty program. In 2014, Union Pacific made changes to its FFD program that required employees in certain positions to disclose specific health events and undergo a FFD evaluation to determine if they presented “an unacceptably high risk of sudden incapacitation.” To perform the evaluation and determine whether “functional work restrictions” applied, the medical services department reviewed the employee’s medical records, considered federal agency guidelines and other relevant scientific information, and sometimes consulted with an outside medical specialist. It then relied on the employee’s supervisor to determine whether he or she could perform the job with or without reasonable accommodation.

District court certifies class. The former employees who brought this action asserted that they were excluded from their positions pursuant to the FFD program, despite being able to fulfil the essential functions of those jobs. The district court certified a hybrid class, which consisted of all individuals who had been or would be subject to an FFD exam as a result of a reportable health event at any time from September 18, 2014, until the final resolution of the lawsuit.

Two-stage trial. The court adopted a two-stage trial plan, certifying the first stage under Rule 23(b)(2), and the second stage under Rule 23(b)(3). During the first stage, the jury would determine whether the railroad “engaged in a pattern or practice of disability discrimination” and the court would decide whether to grant injunctive relief. During the second stage, it would hold individual hearings on reinstatement, damages, ADA “qualification,” and individual defenses.

Teamster’s framework. In so ruling, the court followed the two-step framework set forth by the Supreme Court in International Bhd. of Teamsters v. United States for certain Title VII pattern-or-practice class claims. But while the parties disagreed about whether the Teamsters framework applied to an ADA claim, the Eighth Circuit did not decide the issue, since even assuming the framework applied, the district court abused its discretion by finding that Rule 23(b)(2) and (b)(3) requirements were met.

Individualized “job-related” assessment. Concluding that the individualized inquiries in this case could not be addressed in a manner consistent with Rule 23, the Eighth Circuit explained that if a challenged qualification standard, employment test, or other selection criteria “is shown to be job-related for the position in question and is consistent with business necessity,” it is not unlawfully discriminatory under the ADA. Thus, the statute’s plain language did not allow the district court to determine whether the FFD policy itself constituted a pattern or practice of unlawful discrimination without considering whether the policy was job-related for each of over 650 positions in question and consistent with business necessity in each situation.

Application to each medical condition. And in evaluating whether the risks addressed by the safety-based qualification standard constitute a business necessity, courts “take into account the magnitude of possible harm as well as the probability of occurrence’” in light of the various medical conditions to which it applied. This would require answering many individual questions, which was shown by the fact that the named plaintiffs themselves had varying conditions, with one having had a cardiomyopathy, another a pacemaker that could malfunction if near electromagnetic forces, and another suffered from PTSD and substance abuse.

Restrictions individually evaluated. Though the employees nevertheless argued that the railroad uniformly applied its policy by using a “single set of medical standards” to evaluate its employees during the FFD evaluation, it also gave employees who met those standards “functional work restrictions” that were evaluated by their individual supervisors to determine whether they could still perform the essential functions of the job with or without an accommodation.

Different outcomes despite same disability. The supervisors made independent determinations in this regard that led to varying—and individualized—outcomes. For example, of 18 employees with a cardiac pacemaker who underwent a FFD evaluation, some were cleared to work with no restrictions, some were cleared with permanent restrictions, some were accommodated, and only one was referred to the accommodation committee. Thus, employees with the same disability did not automatically receive the same outcome under the policy.

Accordingly, both the text of the ADA and the record demonstrated that the district court would need to consider the unique circumstances of each position in question to determine whether the policy was unlawfully discriminatory. Indeed, even the plaintiffs acknowledged that their “common predominant question”—whether the FFD policy was unlawfully discriminatory—required first asking the subsidiary question of whether the policy was consistent with business necessity. This was “inherently an individualized question, defeating both predominance and cohesiveness.”

The Eighth Circuit emphasized that it was not deciding the merits of the lawfulness of the FFD policy, only that it was a “highly individualized question” that did not allow class certification under Rule 23(b)(2) and (b)(3). The appeals court also did not reject the possibility that a class bringing an ADA claim through the Teamsters framework could be certified under Rule 23 if, for example, a number of employees from the same or similar positions with the same or similar disabilities sought to challenge Union Pacific’s policy.

Concurrence. Concurring separately, Judge Jane Kelly agreed that the class was improperly certified, but opined that the error was in certifying a class containing 650 different jobs, not in certifying a class of individuals who had different disabilities.