Employee Absences for Medical Reasons: An Expanding Source of Liability

Employer attendance policies designed to control excessive absenteeism have come under attack recently on a number of fronts. Employers must be aware of the potential liability that such policies create when they are not properly drafted or not properly administered. Specifically, attendance policies that impose progressive discipline on employees for absences that are otherwise protected by the Americans with Disabilities Act (ADA) or the Family and Medical Leave Act (FMLA) have led to a number of claims and significant settlements by employers. In addition, leave of absence policies with fixed, maximum durations that allow no exceptions for extensions of time have been found to violate the ADA requirement for reasonable accommodation of qualified persons with disabilities. Employers have recently been subject to claims and EEOC charges, incurring substantial costs in settling such cases.

Last month, Verizon Communications, Inc., agreed to pay $20 million and enter into a three-year Consent Decree to settle charges by the U.S. Equal Employment Opportunity Commission (EEOC) that Verizon's attendance policies violated the ADA. This will be the largest disability discrimination settlement in EEOC history. The policies imposed progressive discipline – up to and including discharge – for nonmanagerial employees who missed work due to illness or injury once they had accumulated a certain number of "chargeable absences." Exceptions were made for certain absences, including jury duty, military duty, and absences that would otherwise be covered by the FMLA; however, there were no exceptions made for absences resulting from conditions that would qualify as disabilities under the ADA. The EEOC characterized Verizon's attendance policies as "inflexible" because they did not specifically take into account the need for time off as a reasonable accommodation for employees with qualifying disabilities under the ADA.

In addition to the substantial monetary remedy in this matter, the Consent Decree required that all Verizon attendance policies hereafter "explicitly state that excusal of an absence as 'nonchargeable' may be considered a reasonable accommodation under the ADA." The Consent Decree provided specific criteria whereby Verizon would be able to determine whether an absence was chargeable or nonchargeable, in accordance with the principles of the ADA. It would be instructive for employers to review these criteria: they reveal, in general terms, the circumstances under which an absence would be "nonchargeable" under the ADA, and yet they also suggest certain employer defenses when such exceptions are not made.  Please click here to view the full Consent Decree, relevant language quoted below.

Equal Employment Opportunity Commission v. Verizon Delaware LLC, Case No. 1:11-cv-01832, United States District Court for the District of Maryland, Consent Decree, filed 7/6/11

¶ 20.03.  In determining whether a Current Associate's absence should be "nonchargeable," Verizon will evaluate on an individual case-by-case basis whether each of the following is satisfied:  (a) the Current Associate has a mental or physical impairment that substantially limits one or more major life activities of such individual as defined by the ADA, and for the period on and after January 1, 2009, as amended through the ADA Amendments Act of 2008; (b) the Current Associate's absence was caused by a disability; (c) the Current Associate or someone else on the Current Associate's behalf requested through the Company's designated process a period of time off from work due to a disability; (d) the Current Associate's absences have not been unreasonably unpredictable, repeated, frequent or chronic; (e) the Current Associate's absences are not expected to be unreasonably unpredictable, repeated, frequent or chronic; (f) Verizon was able to determine, from the request by or on behalf of the Current Associate or through the interactive reasonable accommodation process, a definite or reasonably certain period of time off that the Current Associate would need because of a disability; and (g) the Current Associate's need for time off from work as a reasonable accommodation does not pose a significant difficulty or expense for Verizon's business.  If each of the foregoing is satisfied a Current Associate's absence shall be "nonchargeable."  If (a), (b), (c), (d), (e), (f), or (g) is not satisfied, Verizon may, as Verizon deems appropriate, determine that an absence is "chargeable."

This fact pattern and result should not be viewed in isolation, as employee medical leave rights are protected by state, local, and federal statutes in addition to the ADA. For example, the FMLA requires employers to provide up to twelve weeks of leave per year to eligible employees for their own medical conditions, to care for family members with qualifying medical conditions, and for the birth or adoption of children. When absences that would meet FMLA eligibility requirements are included in a disciplinary policy, an employer could face claims of retaliation or interference with statutory rights under the FMLA, the same result Verizon faced with respect to the ADA. This is true as well with the many state and local equivalents to the ADA and the FMLA. Similarly, state workers' compensation laws protect employees who have been injured, or become ill on the job, from retaliation for filing workers' compensation claims. Discipline of an employee for absences required as a result of a workplace injury or illness can also create the same type of liability under non-retaliation provisions of state laws.

Absenteeism in the workplace is a long-standing and still common problem that employers struggle to control through these disciplinary policies. Limiting employee leaves of absence to a finite, inflexible period is another means to address this problem, yet this too has been challenged by the EEOC.

In June 2011, Denny's Restaurants agreed to settlement of a class action suit filed by the EEOC, including payment of $1.3 million, arising from Denny's implementation of medical leave policies containing maximum duration of leave provisions that did not provide exceptions for reasonable accommodations to qualified individuals with disabilities. This inflexibility was deemed by the EEOC to constitute a refusal to provide reasonable accommodation, and a refusal to engage in the interactive process, both violations of the ADA. This issue of extending medical leaves as a reasonable accommodation under the ADA was the topic of an EEOC meeting on June 8, 2011, held by the Commission to invite public comment. Commissioner Victoria A. Lipnic stated the obvious: "Managing situations where employees need leave for medical conditions is one of the most vexing issues for both employers and employees." The EEOC is expected to issue guidance on this topic in the near future.

For now, it is prudent for employers to review requests for extensions of medical leaves on a case-by-case basis, considering the concepts of reasonable accommodation, the interactive process, and employer hardship. Further, progressive discipline attendance policies should be carefully reviewed and should contain express references to exceptions that will be made in accordance with applicable laws. Perhaps most important, managers charged with implementing all such policies must be fully aware of state, local, and federal laws that may limit an employer's discretion when dealing with absences for medical reasons and requests for extension of medical leaves. The threshold for FMLA qualification is quite low; a medical condition requiring four days absence and treatment by a medical professional is sufficient. Moreover, the definition of "disability" was substantially expanded by the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), reflecting the intent of Congress to construe the ADA less restrictively. The result for employers is indeed "vexing," and should be considered a very real source of potential liability.