Monthly Archives: December 2009

ADA Amendments Act Provides Employees with Greater Protection

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Under the Americans with Disabilities Act (ADA), employees who are “substantially limited” in a “major life activity” are considered disabled and entitled to reasonable accommodations in the workplace. Handicapped employees experienced a welcome change with the ADA Amendments Act (ADAAA), which became effective on January 1, 2009.

The Americans with Disabilities Act (ADA) went into effective in 1992 and, since that time, has faced numerous criticisms. Namely, the strict standards under the ADA created scenarios in which employees were either not sufficiently disabled to state a viable claim or too disabled to be deemed qualified for the position in question.

The ADA Amendments help to minimize these concerns and, in doing so, essentially overturn certain Supreme Court precedents that made it difficult for employees to show that they suffered a substantial limitation in a major life activity. In Sutton v. U.S. Air Lines, 527 U.S. 471 (1999), for instance, the Supreme Court held that “the determination of whether an individual is disabled should be made with reference to measures that mitigate the individual’s impairment ….” The Supreme Court reiterated this principle in Murphy v. UPS, 527 U.S. 516 (1999) and Alberstons, Inc. v. Kirkinburg, 527 U.S. 555 (1999), which were both decided the same day as Sutton. Likewise, in Toyota v. Williams, 534 U.S. 184 (2002), the Supreme Court stated that a substantial limitation in a major life activity must be “interpreted strictly to create a demanding standard for qualifying as disabled ….”

The following is an overview of some of the key changes brought by the ADAAA:

1. Broadened Definition of Disability

Since the ADA was enacted, numerous federal courts found several severe medical conditions – including epilepsy, diabetes, multiple sclerosis, intellectual disabilities, major depression, and bipolar disorder – to not meet the ADA’s definition of “disability.” The purpose of the ADAAA makes explicit that its purpose is “to reinstate a broad scope of protection” by expanding the definition of “disability,” which immediately reverses more than one decade of conservative federal court decisions. The ADAAA also makes clear that a medical condition that is episodic or in remission meets the definition of disability if it would substantially limit a major life activity when active.

2. Broadened Definition of Major Life Activity

The ADA was silent as to what constituted a “major life activity.” The ADAAA now provides a non-exhaustive list of examples of major life activities such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working. The ADAAA also makes clear that major life activities include major bodily functions related to the immune system, cell growth, as well as digestive, bowel, bladder, neurological, brain, circulatory, respiratory, endocrine, and reproductive functions. As a result, serious medical conditions such as cancer (which affects normal cell growth) and diabetes (which affects the endocrine system) should clearly be considered disabilities under the ADAAA.

3. The Effect of Mitigating Measures

Contrary to the trilogy in Sutton, Murphy, and Kirkinburg, the ADAAA requires that mitigating measures be ignored in evaluating whether an impairment substantially limits a major life activity. As such, a mitigating measure can longer be used against employees.

4. “Regarded As” Disabled Standard Revised

The ADA has always offered protection for those employees whom an employer wrongly “regarded” as being disabled. Federal courts, however, required ADA plaintiffs to demonstrate that the employer regarded them as being substantially limited in a major life activity in order to prevail. The ADAAA dispenses with the holding in Sutton:

Standing alone, the allegation that respondent has a vision requirement in place does not establish a claim that respondent regards petitioners as substantially limited in the major life activity of working. … When the major life activity under consideration is that of working, the statutory phrase “substantially limits” requires, at a minimum, that plaintiffs allege they are unable to work in a broad class of jobs.

Contrary to Sutton, under the ADAAA, an employee satisfies the “regarded as” prong if she demonstrates discrimination based on “an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”

With these changes, federal law is catching up to the Massachusetts Fair Employment Practices Act. In 2001, for instance, the Supreme Judicial Court of Massachusetts decided Dahill v. Police Department of Boston, in which the court refused to follow the Supreme Court’s reasoning in Sutton v. U.S. Air Lines and ruled that mitigating measures or corrective devices should not be considered when determining whether an employee is handicapped under M.G.L. c. 151B(1)(17).

EEOC Files Lawsuit Against Discrimination Based on Credit Reports and Criminal Records

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If your criminal record or credit history has resulted in your not getting a job, you may have been the victim of unlawful discrimination.

When people think of workplace discrimination they tend to think of instances of intentional discrimination – for example being passed over for promotion because your boss does not like your ethnic background or being fired because of your disability. This type of intentional discrimination is known as disparate treatment discrimination.

Another, less frequently litigated, form of discrimination is known as disparate impact discrimination (some people also call it “adverse impact discrimination”). Disparate impact discrimination involves a facially neutral employment practice that has a disparate impact on different groups. So, for example, if an employer has a policy that its employees be able to lift at least fifty pounds, that policy is nondiscriminatory on its face but may have an adverse effect if fewer female than male employees are able to lift fifty pounds.

Once a litigant has demonstrated that a nondiscriminatory employment policy has a disparate impact on different groups, an employer has to show that its policy is job-related (e.g., in this particular part of the construction industry being able to lift 50 pounds is essential for most tasks). However even if an employer succeeds in showing that its policy is job-related, the policy is vulnerable if less discriminatory alternatives would also work.

Griggs v. Duke Power Co., 401 U.S. 424 (1971), the Supreme Court case that first held disparate impact discrimination to be illegal provides a good illustration of disparate impact litigation. In Griggs, a power company used some (supposed) intelligence tests to determine eligibility for promotion. These tests turned out to have a racial bias to them that resulted in white employees having, on average, higher scores.

Because of the disparity in these test scores and because Duke Power could not show that the tests were job-related (e.g., they could not show any correlation between scores on IQ tests and ability in repairing power lines), the Supreme Court struck down the practice.

Employers soon smartened up and abandoned crude so-called intelligence tests that had no relation to what an employee did in his day-to-day work.

Today, however, more employers than ever are using credit reports and criminal background checks as part of the application process. Often these facially neutral policies regarding criminal background checks and credit checks have a disparate impact on minority employees. And it’s difficult to see their job-relatedness, especially in light of social science data that, five years after a conviction, a so-called convict has the same chance of reoffending as anyone else – even someone with no prior record.

As part of generally stepping up its enforcement activities under President Obama, the Equal Employment Opportunity Commission (EEOC), has begun to attack employers’ use of criminal records and credit scores. In October, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit against The Freeman Companies, a convention conglomerate, seeking to challenge Freeman’s policy of basing hiring decisions in part on the basis of credit scores and criminal records: http://www.eeoc.gov/eeoc/newsroom/release/10-1-09b.cfm.

The Freeman case could turn out to be an important victory for employees. It could also be a big step in making employment decisions more rational.

Non-Competes and Promotions: The First Circuit’s Take in Astro-Med

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Non-compete agreements must be reasonably limited in time and geographic scope and supported by consideration in order to be enforceable (among other factors). In many circumstances, the “consideration” equals a job. As an employee’s job changes, however, a new non-compete may be required. In 2004, three separate Massachusetts Superior Court decisions made clear that a restrictive covenant is likely unenforceable where it was entered into prior to material changes — such as a promotion — in an employment relationship.

Lycos, Inc. v. Lincoln Jackson, 18 Mass. L. Rep. 256 (2004) (Aug. 24, 2004) (Houston, J.) (denying request for a preliminary injunction “[b]ecause a material change in the employment relationship between [defendant] and [plaintiff] voided the previous Agreement, and because defendant did not sign the Offer Letter incorporating the old Agreement, no written nondisclosure, noncompetition and developments agreement now exists between the parties”)
R.E. Moulton, Inc. v. Lee, 18 Mass. L. Rep. 157 (June 17, 2004) (Kottmyer, J.) (denying request for a preliminary injunction where employee’s position and compensation changed, but no new non-compete agreement was signed and the employer did not notify the employee that he was still subject to the non-compete clause)
Cypress Group, Inc. v. Stride & Assocs., Inc., 17 Mass. L. Rep. 436 (Feb. 11, 2004) (Burnes, J.) (denying request for a preliminary injunction because employees did not sign new restrictive covenant after their promotions to new positions at company)

Recently, the First Circuit’s decision in Astro-Med v. Nihon, called this principle into question. The case originated out of the District Court of Rhode Island. In Astro-Med, Kevin Plant signed a non-compete in 2002 when he joined the company as a Product Specialist, which prohibited from working in all of North America and Europe for a period of one year after his employment ended. In 2004, the company promoted Plant to a sales role in which he served the state of Florida. The non-compete agreement, as written, was unenforceable because the geographic scope was far too broad. The District Court revised the non-compete agreement for the employer so that it could enforceable. In doing so, the court curtailed its territorial reach to Florida and certain customers.

Plant argued that, even with the District Court’s revisions, the non-compete was still unenforceable due to material changes in his employment when he was promoted to a sales role in 2004 and assigned a territory. Although the non-compete agreement was governed by Rhode Island law, Plant cited to Massachusetts law as persuasive authority. Noting the employer’s complete lack of effort to have Plant sign a new non-compete agreement following his promotion, the First Circuit rejected this argument:

Assuming that Rhode Island would adopt Massachusetts’ material change rule, the evidence in this case is insufficient to generate its application. Plant’s job change from product specialist to district sales manager does not reflect a mutual abandonment and rescission of the non-competition provision; there is no suggestion that Astro-Med approached Plant with a new employment agreement; and, there is no evidence of intent on either Astro-Med’s or Plant’s part to revoke or supersede the employment agreement.

Unfortunately, the First Circuit ignored language in F.A. Bartlett Tree Expert Co. v. Barrington, which makes clear that a material change in employment, by itself, can be evidence that a prior non-compete has been abandoned:

The defendant worked under the 1948 contract for twelve years. In 1960, the defendant’s rate of compensation and sales area were changed. Such far reaching changes strongly suggest that the parties had abandoned their old arrangement and had entered into a new relationship.

F.A. Bartlett Tree Expert Co., 353 Mass. 585, 587 (1968).

As other courts interpreting the Massachusetts “material change” rule have recognized, whether an employer has requested a new non-compete following a change in the employment relationship is not dispositive. Rather, “such efforts constitute additional proof that a new employment relationship was forming ….” See Iron Mountain v. Taddeo, 455 F. Supp. 2d 124, 134 (EDNY 2006) (emphasis added). Management-side attorneys will likely use the Astro-Med decision to argue in favor of the enforceability of non-competes that pre-date an employee’s promotion. A careful reading of each Massachusetts case addressing the “material change” doctrine, however, makes clear that a promotion by itself can (under certain circumstances) constitute sufficient evidence that a new employment relationship was created — requiring a new non-compete.