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Title VII national security exemption didn’t bar employee from disability bias suit against TVA

By Ronald Miller, J.D.

An employee of the Tennessee Valley Authority discharged for failing a pulmonary function test (PFT)—a requirement to maintain his medical clearance—could pursue claims for disability discrimination and failure to accommodate under the ADA and the Rehabilitation Act, ruled the Sixth Circuit. On an interlocutory appeal, the appeals court rejected the TVA’s contention that the court lacked subject-matter jurisdiction to hear the merits of the employee’s claim under Title VII’s national-security exemption and the Egan doctrine (Hale v. Johnson, December 29, 2016, Donald, B.).

All plant officers working for the TVA are required to maintain medical clearance as a condition of employment. Since his employment began in 2009, the employee had always maintained the level of clearance necessary for his position. However, in 2013, the TVA made the PFT a requirement for clearance. Because the employee suffered from chronic obstructive pulmonary disorder, he failed the test, and the TVA terminated his employment.

National security exemption. The employee brought claims for disability discrimination and failure to accommodate under the ADA and the Rehab Act. The TVA moved to dismiss for lack of subject-matter jurisdiction, arguing that: (1) Title VII’s national-security exemption applied to the Rehab Act and precluded the court from reviewing the physical-fitness requirements imposed by the Nuclear Regulatory Commission (NRC) in the interests of national security; and (2) the Egan doctrine precluded the judiciary from reviewing the TVA’s determination that the employee lacked the physical capacity to fulfill his job duties because this decision was one of national security.

The district court rejected both of the TVA’s arguments. First, it noted that neither the Rehab Act nor any provisions of Title VII that it referenced mentioned the national-security exemption, and so it concluded that the exemption was inapplicable to the Rehab Act. Turning to the second argument, the district court reasoned that nothing in the language of the Supreme Court’s decision in Department of the Navy v. Egan indicated an intent for its holding to apply outside of the context of security clearances. But noting the importance of the issues and the lack of Sixth Circuit precedent on the issues, the district court certified the case for interlocutory appeal.

Under Title VII’s national-security exemption, it is not unlawful for an employer to discharge an employee if the occupancy of his or her position, or access to the premises in which any part of the duties of that position is performed, is subject to any requirement imposed in the interest of the national security. The Rehab Act prohibits federal agencies from discriminating against their employees on the basis of disability, and although Section 794a(a)(1) of the Rehab Act specifically references Section 717 of Title VII, the subsections it cross-references do not mention Title VII’s national-security exemption.

Cross-references. The TVA reasoned that the national-security exemption applies to all employment discrimination claims because Section 717 borrows Title VII’s federal-employee provisions, which in turn incorporate the national-security exemption. Looking to the plain, unambiguous language of the Rehab Act, the Sixth Circuit found that neither Sec. 794a(a)(1) nor the subsections it cross-referenced contain an express reference to the national-security exemption. Rather, the language of Sec. 794a is expressly limited to the “remedies, procedures, and rights” available to those set forth in specifically listed sections of Title VII. The appeals court observed that if Congress intended for all of Title VII’s provisions to apply, it would not have enumerated specific sections.

Legislative history. Referring to the history of these provisions, the appeals court noted that nothing in the legislative history of the Rehab Act or Sec. 717 firmly established the applicability of the exemption. Moreover, the inapplicability of the national-security exemption to the Rehab Act was reinforced by the absence of case law applying the exemption to claims brought under the Rehab Act. Therefore, the Sixth Circuit held that the national-security exemption did not apply to the employee’s Rehab Act claim.

Security clearance. With respect to the Egan doctrine, the TVA insisted that Egan’s underlying logic indicates that it should not be narrowly construed. The Supreme Court’s decision in Egan and its progeny preclude judicial review of security-clearance decisions. However, the court found the TVA’s argument for extension of Egan in this context unavailing. Though the Sixth Circuit has applied the rule announced in Egan to preclude judicial review of security-clearance decisions, nothing in the language of its opinions suggests that even if its reasoning could extend beyond security clearances, it could reach the scope the TVA sought.

The determination of an individual’s physical capability to perform a job is based on hard science and has historically been reviewed by courts and administrative agencies. Nothing in Egan suggested that its holding applied to physical-fitness judgments, even if purportedly based on the interest of national security. Therefore, the Sixth Circuit declined to extend Egan to preclude judicial review of an agency’s determination regarding an employee’s physical capability to perform the duties of his or her position.