EEOC Cracks Down On Automatic Termination Policies Following Medical Leave
By: INGRID N. CULP & PAMELA ABBATE-DATTILO
As some employers are learning the hard way, the U.S. Equal Employment Opportunity Commission (EEOC) is taking a tough stance against inflexible leave of absence policies that call for automatic termination of employment when an employee cannot return to work upon expiration of the employer’s “maximum” medical leave period. These policies are often referred to as “no fault” or “automatic” termination policies. For years, many employers believed these policies were nondiscriminatory because they applied neutrally to all employees on medical leave. The EEOC, however, disagrees and is aggressively taking the position that these policies violate the Americans with Disabilities Act’s (ADA) requirement that requests for medical leave, including extended leave, be assessed individually on a case-by-case basis.
The EEOC’s enforcement efforts include the following:
- In September 2009, the EEOC and Sears entered into the largest ADA settlement agreement in history. In a class action lawsuit, Sears agreed to pay $6.2 million to resolve the EEOC’s claim that Sears maintained an inflexible leave policy that called for an employee’s termination if the employee was unable to return to work after exhausting workers’ compensation leave and failed to leave room for the possibility that extended leave or other forms of accommodation may be required as reasonable accommodation under the ADA.
- In August 2009, the EEOC sued UPS for an allegedly discriminatory leave of absence policy. In this case, an administrative assistant took a 12-month leave of absence due to multiple sclerosis. She returned to work for a few weeks, but soon needed additional leave to deal with her medication’s side effects. UPS’s leave policy called for automatic termination should an employee require more than 12 months of medical leave. UPS terminated the employee for exceeding its 12-month leave policy. The EEOC determined that UPS failed to reasonably accommodate the employee. The EEOC stated: “[P]olicies like this one at UPS, which set arbitrary deadlines for returning to work after medical treatment, unfairly keep disabled employees from working.” This case is ongoing.
- In 2006, the EEOC and JP Morgan Chase & Co. (Chase) entered into a $2.2 million settlement agreement to resolve an ADA claim initiated by the EEOC. In this case, the employer’s policy permitted employees who returned from medical leave within six months to return to their jobs. Employees who required more than six months of medical leave, however, were not guaranteed to return to their previous position. If their position had been filled, employees who were released to return to work after more than six months of medical leave had 30 days to find another position or were terminated. The EEOC maintained that the ADA requires employers to individually assess whether additional leave or other forms of accommodation will assist employees in returning to work without placing an undue hardship on the company. The EEOC found that Chase had violated the ADA by applying its automatic termination policy and failing to determine on an individual basis whether additional accommodation was possible.
These cases remind employers that a leave of absence is a common form of reasonable accommodation and that the duty of reasonable accommodation has no set time period. This means that one agreement to reasonably accommodate is not always enough. If an employer has approved a certain period of medical leave (even if generous from the start) but the employee is unable to return to work at the expiration of such leave and requests additional leave, the employer must assess whether continued leave would be a reasonable accommodation or result in undue hardship. Many employers ask, “When is enough, enough?” especially in cases where an employee repeatedly asks for additional leave at the end of each period of approved leave. There is no one-size-fits-all answer to this question. Determining whether a leave of absence, whether short or long, would impose an undue hardship is a highly fact-intensive question and must be evaluated on a case-by-case basis. There is no magic number of days, weeks, or months that makes a leave of absence an undue hardship for an employer. Rather, what constitutes an undue hardship is specific to the employee, the employer, and the position at issue.
Employers should review their medical leave of absence policies and practices to ensure that they do not call for a maximum period of leave followed by automatic termination or other adverse action, but rather provide that the duration of medical leave and other requests for accommodation will be determined on a case-by-case basis. Employers covered by the Family and Medical Leave Act (FMLA) also should review their FMLA policy to ensure that the policy does not call for automatic termination of employment if an employee is unable to return to work when FMLA leave is exhausted. Finally, employers should review their personnel policies to ensure that they do not call for employees to be “100% with no restrictions” to continue working or return from leave, as such a policy also violates the ADA.
For assistance with your leave of absence policies or other ADA compliance matters, please contact a member of Fredrikson & Byron’s Employment & Labor Law Group.
“No fault” termination policies following a leave of absence are under fire from the EEOC.