UPS’s $1.7M Wakeup Call: Does Your Leave of Absence Policy Violate the ADA?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

The uncertainty associated with indefinite leaves of absence has prompted many employers to adopt policies which place a cap on the length of leaves of absence. A policy previously adopted by UPS is a common example:

“…if you are absent from your regular occupation for 12 months, you will be administratively separated from employment, regardless of your status on STD [short term disability] or LTD [long term disability].”

Uniform enforcement of a policy providing for administrative termination after a one-year leave of absence has, in fact, been found sufficient to defeat a claim of retaliatory discharge for filing a worker’s compensation claim. See Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386 (Tex. 2005).

For eight years, however, UPS fought a suit brought by the EEOC alleging the aforementioned policy violated the Americans with Disabilities Act (“ADA”). On July 28, 2017, UPS finally agreed to a proposed consent decree with the EEOC. The proposed consent decree, which has not yet been approved by the court as of the date of this writing, requires UPS to, amongst other things, (1) “seek legal advice before terminating the employment of an employee who has reached the end of the medical leave of absence or residual duty/disability period; and (2) pay a group of aggrieved former employees $1,718,500.

What Does the ADA Require?

The ADA prohibits an employer from discriminating against an “qualified individual with a disability” who is an applicant or employee. One form of prohibited discrimination is the use of “qualification standards, employment tests, or other selection criteria that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities unless the standard, test or other criteria …. Is shown [by the employer] to be job-related for the job in question and consistent with business necessity.”

Another form of prohibited discrimination is the failure to make “reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability … unless [the employer] can demonstrate that the accommodation would impose an undue hardship on the operation of the business of [the employer].”

Can a Leave of Absence or Leave Extension be a Reasonable Accommodation?

Most courts agree that a leave of absence or a leave extension can constitute a reasonable accommodation under the ADA “in some circumstances.” What this means for employers is that a leave of absence or leave extension simply cannot be excluded “in all circumstances” as a possible accommodation to an otherwise qualified individual with a disability. Especially, if a leave of absence or leave extension is being requested by a disabled employee, compliance with the ADA mandates that the employer consider whether such an accommodation is “reasonable” or would impose an undue hardship.

Does a FMLA Leave Policy Satisfy the ADA?

The Family & Medical Leave Act (“FMLA”) provides limited rights to medical leave, which may not be available to all employees of an employer. Specifically, FMLA rights may not be available to an employee who (1) has worked less than 12 months, or (2) works at a location with less than 50 employees within 75 miles. The FMLA also generally provides only for 12 weeks of leave.

The ADA otherwise operates independently of the FMLA. Indeed, Department of Labor regulations provide that an “employer must … provide leave under whichever statutory provision provides the greater rights to employees.” 29 C.F.R. § 825.702(a). Since ADA may provide greater leave rights than that provided by the FMLA, a FMLA leave policy does not necessarily satisfy the ADA.

Is Indefinite Leave a Required Accommodation?

Most courts agree, however, that the ADA does not require that an employer provide a disabled employee with indefinite leave. In addressing a claim brought under the Rehabilitation Act of 1973, the Eleventh Circuit, in in Luke v. Board of Trustees of Fla. A&M University, reasoned in a December 22, 2016 opinion: “While a leave of absence might be a reasonable accommodation in some cases … an accommodation is unreasonable if it does not allow someone to perform his or her duties in the present or immediate future.” The court thus affirmed summary judgment in favor of the employer as to a claim that it improperly denied a six-month extension of medical leave.

In addressing an ADA claim, the Fifth Circuit, in Moss v. Harris County Constable, similarly reasoned in a March 15, 2017 opinion: “[R]easonable accommodation is by its terms … that which presently, or in the immediate future, enables the employee to perform the essential functions of the job in question.” The court thus affirmed summary judgment in favor of an employer which terminated an employee who was taking leave without a specified date to return.

More recently, the First Circuit in Echevarria v. Astrzeneca Pharmaceutical, L.P., found, on May 2, 2017, that a proposed accommodation of an additional twelve months of leave, after the employee had already been on leave for five months, was “facially unreasonable.” Still the Court cautioned:

“Although we have previously suggested that ‘there may be requested leaves so lengthy or open-ended as to be an unreasonable accommodation in any situation’ … we need not – and therefore do not – decide that a request for a lengthy period of leave will be an unreasonable accommodation in every case.”

So, What did UPS Allegedly do Wrong?

According to the EEOC suit and the proposed consent decree, UPS’s 12-month leave of absence cap violated the ADA in two respects. First, the cap was so inflexible that it automatically provided for termination of employment, without regard to the possibility that a short extension could be a reasonable accommodation which did not impose a hardship on UPS. Second, the cap acted as “as a qualification standard, employment test or other selection criteria that screen[ed] out or tend[ed] to screen out a class of individuals with a disability and [was] not job related or consistent with business necessity.”

These allegations are consistent with the position taken by the EEOC in a publication, dated May 9 2016, entitled “Employer-Provided Leave and the Americans with Disabilities Act.” In this publication, the EEOC opined that “although employers are allowed to have leave policies that establish the maximum amount of leave an employer will provide or permit, they may have to grant leave beyond this amount as a reasonable accommodation to employees who require it because of a disability, unless the employer can show that doing so will cause an undue hardship.” The publication suggests communication with an employee nearing the end of maximum leave asking if the employee needs additional leave as a reasonable accommodation to the employee’s disability, and then engaging in an interactive process with the employee regarding leave.

What Should Employers Learn from UPS’s Experience?

As the First Circuit recognized in Echevarria, “[w]hether [a] leave request is reasonable turns on the facts of the case.” A policy which establishes a cap on leave may not necessarily be a violation of the ADA, but a refusal to consider any leave which extends beyond the cap may violate the Act in certain circumstances. Any such policy must thus allow room for a reasonable accommodation assessment whereby the cap can be modified as to a particular individual with a disability. Indeed, employers would do well to voluntarily follow the protocol which UPS will soon be required to follow and seek legal counsel before terminating an employee who has exhausted leave. Otherwise, the result may be a prolonged and expensive lawsuit, such as that experienced by UPS.

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