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Discharging Employees on Disability Leave

By Jeffrey Klein, Nicholas Pappas and Lianne S. Pinchuk

       When an employee becomes temporarily disabled and takes a disability leave of absence, his or her employer frequently must decide the extent to which it is legally required to reinstate the employee upon conclusion of the leave.  In order to make such a decision, the employer must consider the requirements of two federal statutes, the Americans with Disabilities Act1("ADA") and the Family and Medical Leave Act2 ("FMLA"), as well as a host of similar state laws.  

        The requirements of the FMLA are straightforward.  An employee with a "serious health condition" who is covered by the FMLA has a right to be restored to the same position or a position "equivalent" to the one held prior to the leave, so long as the employee returns to work before expiration of the employee's annual allotment of twelve weeks of FMLA leave.3  Whether, and the extent to which, an employee has a right to reinstatement upon conclusion of a leave under the ADA is not answered by the words of the statute itself and has been the subject of considerable litigation.4

        Although the ADA does not provide an express right to reinstatement to a job upon conclusion of a disability leave, the ADA's anti-discrimination, anti-retaliation, and reasonable accommodation requirements often provide a basis for employees claiming rights to reinstatement.  For example, where employers have permanently replaced employees on disability leave based upon the need to operate the business, employees often have claimed that such actions are actually a pretext for discrimination on the basis of disability and/or retaliation for making claims of discrimination.

       In this month's column, we analyze a recent Second Circuit case, Weissman v. Dawn Joy Fashions, Inc., 214 F.3d 224 (2d Cir. 2000), in which the Court found an employer liable for disability discrimination and retaliation under the ADA for dismissing and failing to reinstate an employee at the conclusion of a disability leave of absence, after the employee notified the employer of his desire to return to work after the employee filed a charge of disability discrimination with the New York City Commission on Human Rights.  We then discuss the benefits of adopting a disability leave policy that will help employers to avoid such potential liabilities under the ADA.

        Federal, New York State and New York City statutes that prohibit discrimination against individuals with disabilities are the ADA, the New York State Human Rights Law ("NYHRL") and the New York City Human Rights Law ("NYCHRL").5  While each of these statutes has its own unique protections and qualifications, courts in New York have tended to construe them as imposing similar requirements on employers.6

       The ADA prohibits discrimination on the basis of disability.  Specifically, the ADA provides that "[n]o covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual . . ."7  Discrimination under the ADA is defined to include not making "reasonable accommodations" for a disabled employee.8  The ADA also includes an anti-retaliation provision which provides that  "no person shall discriminate against any individual because such individual has opposed any act or practice made unlawful by this chapter or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding or hearing under this chapter."9  

Dawn Joy
       In Weissman, the Second Circuit addressed the application of the ADA's anti-discrimination and anti-retaliation provisions in the context of an employee who was dismissed and not reinstated at the conclusion of a disability leave.  The employer, Dawn Joy Fashions, Inc. ("Dawn Joy"), hired the plaintiff, Steven Weissman, in June 1992 as a salesman of women's clothing in Dawn Joy's Sherry Martin division ("Sherry Martin").  Weissman consistently received favorable evaluations while working at Sherry Martin.  In February 1993 Weissman received a raise.  On March 17, 1993, Weissman suffered a mild heart attack.  His doctors predicted that he would be able to return to work after four or five weeks of recovery.  Dawn Joy decided that Weissman was not able to hold a job and fired him six days after he was placed on disability leave.  Before Weissman filed his claims against Dawn Joy, Dawn Joy supervisors agreed that they would assist him in finding a similar job when he recovered.  On advice of counsel, these same

 supervisors refused to talk to him, let alone assist him, after he filed his claims.

       Weissman filed a complaint in the United States District Court for the Southern District of New York.  Weissman claimed that Dawn Joy discriminated against him by failing to accommodate his disability, by discharging him because of his disability and by retaliating against him after he filed an administrative charge of discrimination with the New York City Commission on Human Rights.  He claimed that these actions violated the ADA, the New York State Human Rights Law and the New York City Human Rights Law.

       After a trial, a jury returned a verdict in Weissman's favor and awarded him economic damages of $75,000, compensatory damages of $95,000 and punitive damages of $150,000.  The Court granted Dawn Joy's post-trial motion by reducing the compensatory damage award and vacating the jury's award of punitive damages.  Weissman and Dawn Joy appealed and cross-appealed to the Second Circuit.  

Second Circuit's Decision
       The Second Circuit held that because Dawn Joy promised Weissman that it would assist him in finding a position after his disability leave, Dawn Joy's failure to assist Weissman after he filed an administrative charge of disability discrimination created an inference of retaliation.  The Court stated that "[a] claim of refusal to rehire an individual following the filing of an employment discrimination charge may be a basis for a claim of retaliation."10

Disability Leave Policy
       To avoid the types of claims made by the plaintiff in Weissman, an employer would be well advised to adopt a clear policy with respect to reinstatement rights of employees on disability leave.  Such a policy should be coordinated with the employer's short term and long term disability leave benefits arrangements as well as with the terms of the FMLA.  Such a policy also may provide specific time frames during which reinstatement rights will be honored while at the same time making it clear that the employer will comply with the terms of the ADA and similar state laws, including their reasonable accommodations requirements.

        For example, the policy may provide that employees on disability leave, who are covered by the FMLA, will be restored to the same or equivalent job at the conclusion of the twelve week allotment of leave under the FMLA.  Prior to the expiration of any FMLA leave period, the policy further may provide that the employer will give the employee a written notification which sets forth the duration of any additional period during which reinstatement rights will be provided as a reasonable accommodation to the employee's disability.  This written notification also may provide that if the employee does not return to work at the conclusion of this additional period of disability leave, the employer no longer will commit to reinstating the employee.  The notification also should make clear that even though reinstatement rights may not continue beyond a specific period, the employee's disability leave benefits will be continued in accordance with the termsof the long and short term disability benefits plans.  The notification may provide that if and when the employee is ready to return to work, the employer will consider that employee's application for employment along with those of other job applicants or, if the employer chooses, by giving the employee a preference among such new applicants.

        The policy described above does not specifically prescribe the maximum period during which an employer will provide reinstatement rights to an employee during a disability leave of absence.  Such a flexible standard allows employers to consider the disabled individual's unique circumstances in deciding the duration of leave that will constitute a reasonable accommodation for that person under the ADA and similar state laws.

       However, where an employer wishes to adopt a clear bright line standard, such an employer may wish to provide for a period of reinstatement rights that is sufficiently lengthy (and generous) that a court will be hard pressed to find that the period is not a reasonable accommodation.  For example, a number of courts have suggested that if an employer honors reinstatement rights during a disability leave for one-year, that employer  necessarily will have provided the employee a reasonable accommodation.11  

        Armed with a written policy which clearly describes the reinstatement rights that the employer is willing to provide consistent with law, an employer would be well positioned to avoid the risks faced by the employer in Weissman.  Under such a policy, the employer in Weissman would not have dismissed the employee either because of the requirements of the FMLA or because the period during which reinstatement rights would have been provided by the employer's disability leave policy as a reasonable accommodation would not have expired.  By extension, at the point in time when such a reasonable accommodation period would have expired, the employer would have been in a position to decide whether business considerations, such as continuing smooth operation of the business, warranted permanent replacement of the employee and the termination of the employee's reinstatement rights.  

In the event an employer chooses to replace permanently an employee on disability leave, and to terminate such employee's reinstatement rights, the employer may wish to document that action, including the employer's business reasons for the action.  In this way, the employer will reduce the risk of a claim that the action was taken because of discrimination on the basis of disability, rather than for valid business reasons.

142 USC § 12102-12213.
229 USC § 2601-2654.
3 See "Dismissal of Employees on Extended Sick Leave," by Jeffrey S. Klein and Nicholas J. Pappas, New York Law Journal (August 2, 1999) p. 3; "Analysis of New Family Leave [FMLA] Regulations" by Jeffrey S. Klein and Nicholas J. Pappas, New York Law Journal (April 3, 1995) p. 3.
4 See, e.g., Sarno v. Douglas Elliman-Gibbons & Ives, Inc., 183 F.3d 155 (2d Cir. 1999); Criado v. IBM Corp., 145 F.3d 437 (1st Cir. 1998); Myers v. Hose, 50 F.3d 27 (4th Cir. 1995);.
5 NYHRL, Executive Law § 296; NYC Administrative Code § 8-107. The Federal Rehabilitation Act parallels the ADA but applies to all federal employers, to employers receiving federal funds, and to any employer that is contracted with the federal government for the amount of $10,000 or more.  29 USC § 794.
6 See, e.g., Dimonda v. New York City Police Dept., 1996 WL 194325, *5 (S.D.N.Y. 1996) (Rehabilitation Act and NYHRL); Altman v. New York City Health and Hosp. Co., 903 F.Supp 503, 514 (S.D.N.Y. 1995) (ADA and NYHRL).  

7 42 USC § 12112(a).
8 42 USC § 12112(b)(5).
9 42 USC § 12203(a).
10 Weissman, 214 F.3d at 234 (citing Veprinsky v. Fluor Daniel, Inc., 87 F.3d 881 (7th Cir. 1996) and Shah v. New York State Dep't of Civil Services, 168 F.3d 610 (2d Cir. 1999))
11  See, e.g., Duckett v. Dunlop TireCorp., 120 F.3d 1222 (11th Cir. 1997) (plaintiff had already received ten months' leave prior to termination); Powers v. Polygram Holding, Inc., 40 F.Supp.2d 195 (S.D.N.Y. 1999) (without need for a trial a court could hold a request for leave of absence unreasonable only in unusual circumstances, like where leave is for one year); Dockery v. North Shore Medical Center, 909 F.Supp. 1550 (S.D.Fla. 1995)(request for leave of one year unreasonable as a matter of law).
Jeffrey S. Klein is a partner and Nicholas J. Pappas is an associate in the Litigation Department of Weil, Gotshal & Manges, LLP where they specialize in labor and employment law.  Lianne S. Pinchuk, an associate at the firm, assisted in the preparation of this article.  

This article is reprinted with permission from the December 4, 2000 edition of New York Law Journal. Copyright 2000 NLP IP Company.