ADA Amendments Act Provides Employees with Greater Protection

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).

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

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.

Non-Compete Agreements in Massachusetts May Soon Be Guided by New Legislation

Non-competes in Massachusetts have been a hot topic in 2009. On October 7, 2009, the Joint Committee on Labor and Workforce Development held a public hearing on proposed non-compete legislation, entitled An Act Relative to NonCompete Agreements, sponsored by Representatives William Brownsberger (D-Belmont) and Lori Ehrlich (D-Marblehead). The experience of Caroline Huang, whose career was negatively affected by a broad restrictive covenant that kept her out of her field, encouraged Representative Brownsberger to focus on non-compete legislation. Ms. Huang’s website, Prohibit Restrictive Employment Covenants, provides many resources and updates regarding the proposed bill.

I was fortunate to be in the position to provide commentary on the drafts that led to the final proposed bill. I also testified at the public hearing with a client, who years prior found her livelihood in jeopardy when her former employer tried to enforce an overly broad non-compete agreement. Although we were successful in opposing the employer’s Motion for Preliminary Injunction, the cost in doing so sometimes prevents employees from properly asserting their rights. Employers know this and, unfortunately, often attempt to leverage the disparity in spending power. This creates a perverse outcome in which an employee is forced to abide by an otherwise unenforceable non-compete in order to avoid legal fees.

One of the highlights of the proposed legislation is a clause that entitles employees to attorneys’ fees “if the court declines to enforce a material restriction or reforms a restriction in material respect.” This will discourage employers from pursuing tenuous claims and help to preserve scarce judicial resources. Notably, the bill also limits non-competes to employees earning an annual salary of more than $75,000. Finally, the proposed legislation creates a presumption of enforceability for non-compete agreements that span up to 6 months.

Unequal Pay Victims Gain Protection through the Ledbetter Fair Pay Act

Gender discrimination just became more expensive. On January 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009. After approximately 19 years as an employee of Goodyear Tire and Rubber Company, Lilly Ledbetter learned that she earned less than her male colleagues. A jury found Goodyear liable for gender discrimination. In a controversial decision, the United States Supreme Court reversed, ruling that Ms. Ledbetter should have filed her claim within 180 days of the date that Goodyear first paid her less than her male counterparts. (For more information about the Supreme Court’s decision, please visit our blog post entitled, Supreme Court Routs Title VII in 2007: Goodyear Wins Right to Discriminate Based on Gender.)

The Ledbetter Fair Pay Act of 2009 has three key features. First, the statute not only applies to gender discrimination, but also to unequal pay based on the following types of discrimination: (a) race, color, religion, and national origin under Title VII; (b) age under the Age Discrimination in Employment Act (ADEA); and (c) handicap discrimination under the Americans with Disabilities Act (ADA). Second, the statute allows employees who have suffered these types of unequal pay discrimination to recover back pay for up to two years preceding the filing of a charge with the Equal Employment Opportunity Commission. Third, the Act takes effect retroactively as if enacted on May 28, 2007.

The Fair Pay Act is a welcome change for employees who suffer pay discrimination. For more information on this issue please visit the New York Times article entitled,Obama Signs Equal Pay Legislation.

Massachusetts Maternity Leave Act Applies to Men

The Massachusetts Commission Against Discrimination (MCAD) recently announced that the Massachusetts Maternity Leave Act (MMLA), M.G.L. c. 149, s. 105D, must be viewed as gender neutral. Originally, the MMLA provided female employees with eight weeks of leave relating to the birth or adoption of a child. Recognizing the disparate treatment that the MMLA created, the MCAD Guidelines warned that “an employer who provides leave to female employees only, and not to male employees, may violate the federal prohibitions against sex discrimination even though the employer has acted in compliance with the MMLA” (See Answer 11).

MCAD Commissioner, Martin Ebel, defended the change as not only necessary to ensure equal treatment between male and female employees, but also to guarantee equality between same-sex couples:

If two women are married and adopt a child, then they are both entitled to leave under the [MMLA], and yet if two men are married and adopt a child, they would be entitled to no leave under a strict reading of the statute. That result was troubling to us, and we didn’t think it was in keeping with our mandate by statute, which is to eliminate, eradicate and prevent discrimination in Massachusetts.

The MCAD’s long-awaited stance on the MMLA is a welcome change. Restricting the MMLA to female employees reflects the archaic perception that a woman’s career should take a backseat after giving birth. Granting equal maternity leave benefits to both men and women finally brings the statute into the 21st century.

For more information about the change to the Massachusetts Maternity Leave Act, please visit the Massachusetts Lawyers Weekly article entitled, Men now eligible for maternity benefits

A Reminder on Congress’ Amendments to Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act experienced much needed changes in 2008. Congress amended the Family and Medical Leave Act (FMLA) earlier in the year to afford employees two new types of leave. First, employees may take 26 weeks of leave in a single 12 month period to care for an injured or ill servicemember. This provision only applies where the servicemember is the employee’s spouse, child or parent, or when the employee is the servicemember’s next of kin. Second, employees may take 12 weeks of exigency leave where a family member is on active duty or is notified of a call to active duty status. The latter does not take effect until the Department of Labor (DOL) issues final regulations. The DOL, however, is encouraging employers to offer exigency leave immediately.

Wage & Hour Violations Face Mandatory Treble Damages

Wage and hour violations will be taken seriously in Massachusetts. Bill S.1059 proposed that treble damages must be awarded to plaintiffs who prevail in wage and hour lawsuits. On April 14, 2008, the bill was enacted into law. The new law essentially reverses the Supreme Judicial Court’s ruling in Wiedmann v. The Bradford Group, Inc., which held that treble damages should only be awarded where the employer’s conduct was “outrageous, because of [its] evil motive or [its] reckless indifference to the rights of others.”

S.1059’s enactment followed an interesting course. The Massachusetts Legislature initially submitted the bill to Governor Deval Patrick in February 2008. Governor Patrick returned the bill without signature and urged that certain exceptions be provided, which the Legislature rejected. Governor Patrick ultimately declined to veto S.1059.

The new law states that employees who prevail in court “shall be awarded triple damages, as liquidated damages, for any loss of wages and other benefits.” The treble damages provision applies to a host of wage and hour violations:

Payment of wages, including commissions and vacation pay
Overtime pay for nonexempt employees
Minimum wages
Improper deductions
Misclassification of employees as independent contractors
Tip pool sharing
Retaliation for asserting wage complaints

To read more about mandatory treble damages in Massachusetts, please visit Forbes’ article entitled, Massachusetts Passes Bill Restoring Triple Damages for Non-Payment of Wages.

Equal Pay Across Genders Faces Resistance from White House

In 1996, civil rights advocates established Equal Pay Day to acknowledge the pay gap between genders in which female employees earn approximately 75% of the wages of their male counterparts. Ensuring equal pay across genders continues to be a struggle. Numerous lawsuits have been brought on behalf of women throughout the United States who, despite performing the same work as their male counterparts, are paid substantially less. In December 2007, for example, the Ninth Circuit affirmed class action certification in Dukes v. Wal-Mart, which seeks redress for approximately 1.6 million current and former female Wal-Mart employees consistently passed up for promotions and salary increases that went to lesser qualified males (See Gender Discrimination Class Action Certified by Ninth Circuit Against Wal-Mart).

Perhaps the most important suit to-date has been the United States Supreme Court’s May 2007 ruling in Ledbetter v. Goodyear Tire & Rubber Co., which signifies a near-fatal blow to an employee’s right to seek redress for pay discrimination. Lilly Ledbetter worked at Goodyear for 19 years before realizing she was being paid much less than many of her male counterparts. Although a jury agreed that Ms. Ledbetter had been paid unfairly, the Supreme Court reversed on the basis that her claim was time-barred by Title VII’s 180 day limitations period. For a more detailed discussion about the Ledbetter case, please visit: Supreme Court Routs Title VII in 2007: Goodyear Wins Right to Discriminate Based on Gender.

To undo the harsh effects created by the Ledbetter decision, Senator Edward Kennedy (D-Mass) proposed the Fair Pay Restoration Act, which would re-establish the long-standing rule that each discriminatory paycheck constitutes a new act of discrimination and re-starts the 180 day statute of limitations clock.

In July 2007, the U.S. House of Representatives passed the Fair Pay Restoration Act by a vote of 225 to 199. Unfortunately, the White House recently threatened to veto the bill in an effort to keep the Ledbetter decision as the status quo. This will likely be a talking point in the 2008 Presidential Race. While most Democrats support the bill, most Republicans oppose the legislation. The likely Republican nominee, Arizona Senator John McCain, opposes the Fair Pay Restoration Act:

I am all in favor of pay equity for women, but this kind of legislation, as is typical of what’s being proposed by my friends on the other side of the aisle, opens us up to lawsuits for all kinds of problems. This is government playing a much, much greater role in the business of a private enterprise system.

For more information on this issue please visit the Washington Post’s article entitled, White House Threatens to Veto Discrimination Bill.

Family Medical Leave Act (FMLA) Sees Changes

The Family and Medical Leave Act (FMLA) may undergo a shake up. The United States Department of Labor (DOL) has proposed regulatory changes to the FMLA. The changes, which are 500 pages long and have a 60 day comment period, make significant modifications to the FMLA. A sampling include:

Serious health condition: The definition of “serious health condition” would be substantially revised to require two or more treatments within a 30 day calendar period. In addition, to qualify as a chronic condition, an employee would be required to see a physician for the particular condition at least two times each a year.

Medical Certification: An employee’s burden to provide medical certification would be set higher, which allows an employer to dig deeper into an employee’s medical file, raising privacy concerns.

Notification: The notification period that employers are required to provide would be watered down. Under the proposed changes, employers will be given five days, versus the current requirement of two days, to provide employees with notice of FMLA eligibility.

The changes, which were initiated by President George W. Bush, are not employee friendly. Senator Hillary Clinton’s campaign issued the following Press Release:

The Bush Administration is seeking to make it more difficult for employees to claim paid leave when it is available to them by requiring the employers leave policies to take precedent over the FMLA; requiring employees with chronic health conditions to obtain an annual certification that they are able to do their job or risk being transferred to a different job; allowing employers to communicate directly with medical providers, which raises privacy concerns; and much more. The proposed regulation is 500 pages long.

We will keep you posted on what the 60 day comment period yields.

Houston Chronicle Editorial Urges Senate to Pass the Fair Pay Restoration Act

The Houston Chronicle ran an Editorial entitled, Pay Stub, which urges the Senate to pass the Fair Pay Restoration Act to ensure equal pay across genders. We wrote about the Act in a post on January 30, 2008 entitled, Two Important Congressional Bills: The Fair Pay Restoration Act & The Civil Rights Act of 2008.

The Act would essentially nullify the Supreme Court’s ruling in Lilly Ledbetter v. Goodyear Tire & Rubber Co., which sets a strict deadline for filing actions based on equal pay. Under the Supreme Court’s ruling, the statute of limitations in such actions starts to run when an employee first begins to receive unequal pay, even if the employee is completely unaware of the employer’s discriminatory pay practice. As the Editorial points out, the ruling panders to the corporate interest:

[I]t’s a disaster for employees. The reality of the work environment, as almost any employee knows, is that it is difficult to know how much money any individual worker makes. In fact, companies typically discourage employees from discussing pay issues in the workplace at all. Anyone receiving discriminatory wages will be highly unlikely to find out in a timely manner.

To read more about the Ledbetter decision, please visit our January 31, 2008 post entitled, Supreme Court Routs Title VII in 2007: Goodyear Wins Right to Discriminate Based on Gender.