EEOC Continues Its Assault on Automatic Termination Provisions in LOA Policies

Last year, a federal district court in Illinois approved a settlement in the amount of $6.2 million between the EEOC and Sears Roebuck & Co.  The EEOC had brought a class action against Sears Roebuck & Co. claiming that it had violated the ADA by having an inflexible policy of terminating injured employees who had exhausted their workers’ compensation leaves rather than seeking ways to return them to work.  As part of the consent decree, Sears agreed that, prior to terminating an employee for exhausting their leave requirements, Sears would contact the employee to provide them with the opportunity to request potential accommodations, including possibly additional leave, to enable them to return to work. See for EEOC’s discussion of the Sears’ settlement.Since then, both the EEOC  and private plaintiffs have filed a salvo of class actions, alleging that the following types of policies/practices violate the ADA:

1. Automatic termination of employment upon expiration of FMLA

2. Automatic termination of employment upon expiration of STD benefits

3. Automatic termination of employment upon expiration of fixed medical leave beyond FMLA–for example, upon 26 weeks of leave.

Just this month, the EEOC settled another automatic termination case with a group of supermarkets for $3.2 million. t is the view of the EEOC that, rather than a rigid ‘inflexible’ automatic termination rule, there should be an interactive dialogue initiated by the employer about whether  additional leave is a reasonable accommodation under the circumstances. The EEOC’s position does not automatically mean that the employee must be given additional leave in each of circumstances set forth above.  It means only that an individualized determination must be made. The same analysis arguably would apply to depriving employees of leave who do not qualify for FMLA. Many companies have medical leave policies independent of the FMLA with minimum service requirements, for example, 6 months. The EEOC’s analysis with regard to maximum leave provisions arguably applies equally to minimum service requirements. To avoid the time and expense of litigation, we recommend that employers revisit their FMLA and other leave policies and consider avoiding the kind of per se minimum and maximum requirements that invite class attack.  The result of individualized determinations may be some apparent inconsistencies that could result in individual discrimination claims but that risk must be balanced against the larger class action risk that goes with consistency flowing from per se rules. It’s risk selection, not risk avoidance. Please let us know if we can help with balancing these competing risks.

Pardon the formality, but this blog should not be construed as legal advice or as pertaining to specific factual situations.