UNITED
STATES SUPREME COURT RESTRICTS THE INTERPRETATION OF “DISABILITY”
UNDER THE AMERICANS WITH DISABILITIES ACT
Recently, the United States Supreme Court narrowed the definition
of “disability” under the Americans with Disabilities Act (“ADA”). The
High Court decided a trio of cases that addressed whether individuals
with physical impairments, who can function normally when they use their
medical devices or take their medication, are “disabled” within the
meaning of the ADA. The
Court took the more restrictive view, ruling that such persons were not
“disabled” under the meaning of the Act.
In Sutton v. United Airlines, Inc., the lead decision, two
near-sighted pilots sued United Airlines, alleging the company refused
to hire them because of their vision impairment. The Court ruled the individuals
were not “disabled” under the ADA, and therefore not protected
because, by wearing glasses, their vision was fully corrected. The Court explained that “a
person whose physical or mental impairment is corrected by medication or
other measures does not have an impairment that presently ‘substantially
limits’ a major life activity.” The Court emphasized that some
individuals that benefit from medication or medical devices might still
be protected under the ADA if the individuals remain substantially
limited in a major life activity.
The Court’s holding is a favorable interpretation for employers
and is aimed at limiting employee rights under the ADA to the more
traditional class of disabled individuals. However, it is uncertain how the
Court would treat other disabled individuals who are able to
substantially, but not fully, correct the impairment.
As a secondary matter, the Court declared that “creating
physical criteria for a job ordinarily does not violate the ADA.” The Court explained, “an
employer is free to decide that physical characteristics or medical
conditions that do not rise to the level of an impairment – such as
one’s height, build or singing voice – are preferable to others,
just as it is free to decide that some limiting, but not substantially
limiting impairments make individuals less than ideally suited for a
job.”
However, employers are reminded that the definition of “handicap”
under New Jersey law is significantly broader than the definition of “disability”
under the ADA. Importantly, the term “handicap”
does not require that an individual be substantially limited in a major
life activity. Therefore,
the analysis used by the United States Supreme Court in Sutton
may not be directly applicable to a case brought under New Jersey law. The New Jersey Supreme Court has
not yet addressed whether the same corrective measures discussed in Sutton
would preclude a determination that an individual is “handicapped”
under New Jersey law.
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NEW JERSEY SUPREME COURT CLARIFIES PUNITIVE DAMAGES
STANDARD AND DECIDES THAT PUNITIVE DAMAGES AWARDS MAY BE APPLICABLE TO
PUBLIC EMPLOYERS
In
Cavuoti v. New Jersey Transit Corp., the Supreme Court addressed two
issues regarding the award of punitive damages under the New Jersey Law
Against Discrimination (“NJLAD”).
First, the Court announced standards for determining which
employees constitute “upper management.” Second, the Court decided that
punitive damages may be awarded against a public entity.
Punitive
damages may be imposed against an employer under the NJLAD if the
following conditions are met: a) actual participation in, or willful
indifference to, the wrongful conduct by upper management; and b) proof
that the offending conduct is especially egregious. The Court in Cavuoti held that
“upper management” includes “those responsible to formulate the
organization’s anti-discrimination policies, provide compliance
programs and insist on performance (its governing body, its executive
officers).” “Upper
management” also includes “those to whom the organization has
delegated the responsibility to execute its policies in the workplace,
who set the atmosphere or control the day-to-day operations of the unit
(such as heads of departments, regional managers or compliance
officers).”
To
qualify as “upper management” under the latter category, the
employee must have:
a)
broad supervisory responsibility over the employees involved, including
the power to hire, fire, promote, and discipline, or
b) the delegated responsibility to execute the employer’s policies to
ensure a safe, productive and discrimination-free workplace.
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NEW JERSEY SUPREME COURT
DECIDES THAT AN EMPLOYEE WHO “BLOWS THE WHISTLE” ON OTHER EMPLOYEES
IS PROTECTED UNDER NEW JERSEY LAW
The New Jersey Supreme Court has decided that an employee who
complains about conduct of co-employees is protected under New Jersey’s
Conscientious Employee Protection Act (“CEPA”).
The plaintiff in Higgins v. Pascack Valley Hospital was a
part-time nurse in a mobile intensive care unit who had complained about
co-employees. Specifically,
she complained that one employee filled out the wrong forms after
treating a patient and that another employee stole medication from a
patient. As to the first
complaint, the Hospital investigated and concluded there had been no
wrongdoing. The Hospital
also concluded plaintiff was disrupting the workplace. As to the second complaint, the
Hospital investigated and found plaintiff’s accusation to be baseless
again. After the second
incident, plaintiff’s co-workers submitted written refusals to work
with plaintiff. Accordingly,
plaintiff was reassigned.
Plaintiff filed an action against the Hospital under CEPA, New
Jersey’s whistleblower law. Plaintiff claimed that the reassignment disadvantaged her and
was an effort to retaliate against her in violation of CEPA.
After a jury trial, plaintiff was awarded $640,000 plus attorneys’
fees and costs. Defendant raised the defense that CEPA does not apply to
complaints about co-workers. Rather,
defendant argued CEPA only applies to complaints about conduct by the
employer itself. The trial
court acknowledged that CEPA only applies if the employer is involved in
the complained of conduct. However,
the trial court concluded such “involvement” will be found if an
employer fails to respond to an otherwise unprotected complaint about
conduct of co-employees. Therefore,
the court let stand the jury verdict in favor of plaintiff. The Appellate Division affirmed,
holding that complaints about the activities of co-workers are generally
unprotected, but could become protected if the employer condones the
conduct.
The New Jersey Supreme Court gave an even broader reading of CEPA. Indeed, the Court rejected the
exclusion that has been applied to complaints regarding co-workers. The Court explained that
co-worker misconduct may impact the public health and safety just as
employer conduct may, even in situations where the employer does not
condone the employees’ conduct. Therefore,
the Court affirmed the jury verdict.
However, the Court emphasized that the complaining employee must
have an “objectively reasonable basis” for his complaint to be
protected under CEPA.
This case represents a significant extension of CEPA’s scope. Now, employees that complain
about their co-employees’ misconduct have a remedy if they suffer an
adverse employment action unless: a) the reason for the adverse action
is unrelated to the employee’s complaint; or b) the employee’s
complaint was not supported by an “objectively reasonable basis.”
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COURT REQUIRES EMPLOYERS TO
ENGAGE IN “INTERACTIVE PROCESS” WITH DISABLED EMPLOYEES IN NEED OF
ACCOMMODATION UNDER ADA
The
Third Circuit Court of Appeals recently summarized the obligations of
employers regarding the accommodation of “disabled” employees under
the Americans with Disabilities Act (“ADA”).
In
Taylor v. Phoenixville School District, the plaintiff was a secretary
who had been employed by the school for twenty years. The
plaintiff began to suffer from a mental impairment around the same time
that a new computer system was introduced. She was given a leave
of absence and was admitted for several weeks to a psychiatric hospital
for treatment. After her symptoms were controlled, she was
permitted to return to work. Her son advised the school’s
administrator that plaintiff would require an accommodation; however, no
specific accommodation was requested.
During the year following her return, plaintiff was repeatedly
disciplined for poor performance and was ultimately terminated.
Plaintiff filed suit under the ADA alleging the School District failed
to accommodate her disability. The lower court dismissed her case
on summary judgment. The Court of Appeals reversed.
The
Court of Appeals determined that even though plaintiff’s son was not
specific about what type of accommodation was needed, the request was
sufficient to trigger the School District’s obligations under the
ADA. In addition, the School District offered no accommodations,
made plaintiff’s job more difficult, and simply sat back and continued
to document her failures. The court decided that “a reasonable
jury could conclude that the school district did not engage in an ‘interactive
process’ of seeking accommodations and is responsible for the
breakdown in the process.”
In
the view of the Court of Appeals, employers must engage in the “interactive
process” with employees seeking accommodations. This means
meeting with the employee who requests an accommodation; requesting
information about the employee’s condition; determining what
limitations the employee has; asking the employee what accommodation he
or she desires; showing some sign of having considered the employee’s
request; and discussing available alternatives when the specific request
is too burdensome.
Based
upon this and other court decisions, employers should take a proactive
role in addressing employee requests for accommodations.
Additionally, employers should take note that even a vague request by an
employee for an accommodation may trigger the employer’s obligation to
engage in the “interactive process.”
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SENSITIVITY TO SECOND-HAND
SMOKE IS NOT A HANDICAP UNDER THE LAW AGAINST DISCRIMINATION
The New Jersey Superior Court, Appellate Division, recently
decided Heitzman v. Monmouth County, which held that an employee’s
sensitivity to second-hand cigarette smoke in the workplace is not a
protected handicap under New Jersey’s Law Against Discrimination. The
court also concluded that a series of anti-Semitic comments by
co-workers, about which the employee had never complained, were not
enough to create a hostile work environment based upon the employee’s
Jewish ancestry.
Michael Heitzman was employed from March 1992 to August 1993 as a
Weighmaster at Monmouth County’s waste reclamation center. During his employment, he
complained to his supervisors about his sensitivity and exposure to
second-hand cigarette smoke from co-workers in the weighmaster booths
where he worked. The
supervisors posted “No Smoking” signs in the booths.
In August of 1993, Heitzman’s employment as a Weighmaster was
terminated for poor performance, and he was reassigned to a different
lower-paying position outside of the reclamation center. Heitzman claimed that he was
subjected to a hostile work environment and ultimately demoted because
of his sensitivity to second-hand smoke, which he claimed is a “handicap”
under the Law Against Discrimination. In support of his claimed
handicapped status, he presented a doctor’s note stating that he was
“quite sensitive to smoke exposure” and that he had complained of
cigarette smoke related symptoms. That
doctor’s note did not identify any physical condition, such as asthma,
from which Heitzman suffered.
The Appellate Division held that Heitzman was not handicapped
because there was no evidence that his sensitivity to smoke was related
to any physical disability, such as asthma or emphysema, which could
qualify as a handicap. The
doctor’s note was insufficient to establish a handicap because it did
not identify any such condition and merely restated the employee’s
subjective complaints about smoke in the workplace. Because the employee was not
handicapped under the law, the court upheld the dismissal of his
handicap discrimination claim. Importantly, this decision holds that a doctor’s note,
which merely identifies symptoms or subjective complaints, may not
establish the existence of a physical or mental handicap.
In addition, the Appellate Division upheld the dismissal of the
employee’s hostile work environment claim based on a series of
comments about his Jewish ancestry.
Heitzman alleged that there were at least eight anti-Semitic
comments made to or about him by his supervisor and co-workers during
his employment (the worst of which was “If Hitler were alive, he would
have made a lamp shade out of you”).
Heitzman admitted that he never complained to anyone about any of
these comments during his employment.
The court held that, while the comments were undoubtedly rude and
offensive, they were not sufficiently severe or pervasive to constitute
a hostile work environment. In
dismissing this claim of hostile environment, the court relied, in part,
on the fact that the employee never complained about the anti-Semitic
comments, nor did he mention these comments when he filed a grievance
challenging his reassignment.
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NEW JERSEY SUPREME COURT
REDEFINES EXCLUSIVE REMEDY PROVISION
OF LAW AGAINST DISCRIMINATION
In Wilson v. Wal-Mart Stores, the New Jersey Supreme Court
decided two issues.
First, the Court applied an exception to the exclusive remedy
provision of the New Jersey Law Against Discrimination.
Second, the Court concluded that the continuing violation
doctrine can apply to claims against a predecessor employer.
In Wilson, the plaintiff was employed in a KMart until the
store was sold to Wal-Mart in January 1994.
After the sale, plaintiff worked for Wal-Mart in her same
position under the same supervisor.
Plaintiff was terminated in March 1994 for refusing to wear a
brassiere.
After her employment terminated, plaintiff alleged that her
supervisor made rude comments to her during her employment for both
Kmart and Wal-Mart.
She also alleged that her termination from Wal-Mart was wrongful.
Plaintiff filed a charge of discrimination with the New Jersey
Division on Civil Rights alleging sex discrimination and sexual
harassment against Wal-Mart and her supervisor individually.
On March 4, 1996, exactly two years after she was terminated by
Wal-Mart, plaintiff filed a Superior Court complaint against Wal-Mart,
KMart and her supervisor individually.
The Division on Civil Rights charge had not been withdrawn.
Both Wal-Mart and KMart sought to dismiss plaintiff’s complaint
under the exclusive remedy provision of the New Jersey Law Against
Discrimination, which provides that the procedure before the Division on
Civil Rights is, while pending, exclusive.
In addition, KMart asserted the claims against it were barred by
the two year statute of limitations.
Specifically, the complaint was filed more than two years after
plaintiff’s last day of employment at KMart.
The Supreme Court decided the legislature could not have intended
to preclude plaintiffs like Wilson from pursuing civil claims.
First, the Division on Civil Rights had not made any rulings
concerning plaintiff’s charge.
Second, plaintiff withdrew the Division on Civil Rights charge
shortly after the civil suit was filed.
Finally, the defendants were not prejudiced or forced to litigate
in two forums.
The Court appears to have disregarded the express language of the
Law Against Discrimination by permitting plaintiff to maintain her
Superior Court complaint despite the existence of the Division on Civil
Rights proceeding.
As
to the statute of limitations defense asserted by KMart, the Court began
by analyzing the continuing violation doctrine, which provides that
where there exists a continuing pattern of related conduct, the
limitations period does not begin to run until the final act of the
pattern. Then, for the
first time, the Court decided that a single violation may continue
during the course of two separate employments. The Court concluded that the
conduct of two different employers in this case constituted a single
continuing violation. Thus,
the two year statute of limitations did not begin to run as to KMart
until the final act of the alleged sexual harassment occurred, which was
during plaintiff’s employment with Wal-Mart, and within the two year
limitations period.
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NLRB BROADENS EMPLOYER’S DUTY TO BARGAIN WITH A UNION BEFORE
RELOCATING WORK
The National Labor Relations Board (“NLRB”) has expanded the concept
that an employer must bargain with the union representing its employees when
“labor costs” are a factor in its decision to relocate bargaining unit work. Now, says the Board, “labor costs”
will be construed to include indirect labor costs such as labor efficiency and
productivity.
In Eby-Brown Co., L.P., the concept was again expanded. The company, a wholesale distributor of
products to convenience stores, purchased another wholesaler, which resulted in
a large geographic shift in distributions for the company. As a result, the company moved a
substantial amount of its distribution work from its Teamster-represented
facility in Indianapolis to a non-union facility in Springfield, Ohio. The move was driven by the fact that
many of the Company’s customers were closer to the Springfield facility than
the Indianapolis facility. Additionally,
relocating the work would improve customer service, reduce fuel costs, wear and
tear on trucks, and decrease layovers. Thus,
from the Company’s perspective, the move was driven by geography and not labor
costs.
The NLRB took a different view. The
NLRB found that the Company’s decision to relocate the work was based upon the
economic efficiency of having its trucks travel from the Springfield facility to
its customer sites, and that the cost of operating the trucks includes labor
costs. Therefore, the NLRB ruled
that the employer had a duty to bargain with the union and give the union the
opportunity to offer labor cost concessions, which could have changed the
employer’s decision to relocate the work.
In doing so, the NLRB significantly expanded the factors which give rise
to an employer’s duty to bargain concerning the decision prior to relocating
work. Absent waiver, the obligation
to bargain concerning the effects of a relocation always exists, even where the
obligation to bargain concerning the decision does not.
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PUBLIC SECTOR
AN EMPLOYEE WHO IS STATUTORILY
DISQUALIFIED FROM OBTAINING PUBLIC EMPLOYMENT MAY BE BARRED FROM MAINTAINING AN
ACTION FOR WRONGFUL DISCHARGE
On March 9, 1999, the Appellate Division rendered its opinion in Cedeno
v. Montclair State University holding that a person who is statutorily
barred from obtaining public employment as a result of a criminal conviction may
not maintain an action for an alleged wrongful discharge from that position.
In 1982, the plaintiff in Cedeno was convicted of bribery arising
out of his employment with the Southeastern Pennsylvania Transportation
Authority where, between 1973 and 1979, he worked as the Director of Purchasing. Subsequently, in 1986 the plaintiff
applied for the position of Director of Purchasing at Montclair State University
(MSU). The job application form, which he was required to complete,
asked whether he had any “criminal convictions”. Plaintiff responded “No”.
Plaintiff was subsequently hired by MSU under a one-year employment
contract, which was subject to renewal on an annual basis.
In March 1996, plaintiff’s supervisor recommended that plaintiff’s
employment contract not be renewed. The
President of MSU concurred and the plaintiff’s employment contract expired on
June 30, 1996. In response,
plaintiff filed an action against MSU and his supervisor alleging, among other
things, retaliatory discharge in violation of the Conscientious Employee
Protection Act (“CEPA”) and discrimination on the basis of ethnicity and age
in violation of the New Jersey Law Against Discrimination (“NJLAD”). During discovery, defendants became
aware of plaintiff’s bribery conviction and filed a motion for summary
judgment on the ground that plaintiff’s wrongful discharge claims were barred
because he was disqualified from public employment pursuant to N.J.S.A.
2C:51-2(d).
N.J.S.A. 2C:51-2(d) provides in
relevant part:
Any person
convicted of an offense involving or touching on his public office, position or
employment shall be forever disqualified from holding any office or position of
honor, trust or profit under this State or any of its administrative or
political subdivisions.
The lower court denied defendants’ motion for summary judgment, holding
that plaintiff’s criminal conviction did not bar his action because it
constituted “after acquired evidence”.
On appeal, the Appellate Division reversed. The Appellate Division stated that while
an employer ordinarily may not defeat a wrongful discharge claim under CEPA or
the NJLAD due to an employee’s misrepresentation on an employment application,
the misrepresentation made by plaintiff provided more than a basis for his
discharge. Rather, because of his
bribery conviction, plaintiff was statutorily barred from obtaining public
employment in New Jersey. MSU was
therefore prohibited by statute from hiring plaintiff and would have been
required to summarily discharge him if it had become aware of his conviction at
any time during his employment. Accordingly,
the Court held that the public policy considerations underlying N.J.S.A.
2C:51-2(d) would be “seriously undermined if plaintiff were allowed to pursue
any form of monetary claim against the State.”
The Appellate Division noted, however, that a person who was disqualified
from holding public employment may be allowed to seek compensation for harm
suffered during such employment under circumstances where the need to vindicate
the public policies of CEPA or the NJLAD exist.
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SCHOOL BOARD MAY NOT APPOINT
SUPERINTENDENT IF THE APPOINTMENT WILL BIND ITS SUCCESSOR
The New Jersey Superior Court, Appellate Division, recently held that a
Board of Education (“Board”) exceeded its authority when it appointed a
superintendent to a term scheduled to begin after the expiration of the
Board’s term. The court held that
the action of the Board was void as a matter of law.
In Gonzalez v. Elizabeth Bd. of Ed., the Elizabeth Board of
Education notified its Superintendent, Thomas Dunn, that his contract would not
be renewed when it expired on June 30, 1996.
On February 8, 1995 the Board voted to appoint Assistant Superintendent
Manuel Gonzalez as the new superintendent pursuant to a three-year contract
which would begin on July 1, 1996. However,
after the Board elections were held in May 1996, the makeup of the Board
changed. The new Board immediately
took formal action extending Dunn’s term as Superintendent to June 30, 2001. The Board directed Gonzalez to resume
his duties as Assistant Superintendent. Gonzalez
challenged the Board’s actions claiming there was a breach of contract and
that he was improperly removed from the Superintendent position. In denying Gonzalez’s claim, the
Appellate Division followed the common law rule that a public body may not bind
its successor to a contract whose term will begin after the expiration of the
term of the appointing body.
The Appellate Division’s decision provides boards of education with
some guidance concerning the appointments of superintendents or other officials. Specifically, a board must notify an
incumbent superintendent that his or her contract will not be renewed at least
one year before the contract expires. However,
based upon Gonzalez, the new superintendent may only be appointed by the
existing board at the time the appointment becomes effective. This means that the board, which decides
not to renew the contract of the superintendent, may not be the same board that
appoints the new superintendent.
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CORPORATE CORNER
NEW COBRA REGULATIONS CLARIFY ISSUES
AND PROVIDE FOR GREATER LIABILITY
The Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”)
have proposed new COBRA rules and regulations for qualifying events as of
January 1, 2000. The rules and
regulations demonstrate the aggressiveness of the IRS and DOL with respect to
enforcing COBRA compliance. For example, the text of the regulations contains the
following excerpt:
The US Department of Labor has
advised the IRS and Treasury that to the extent a plan fiduciary subjects a plan
to liability for the COBRA excise tax on account of his or her imprudent
actions, the plan fiduciary may be held personally liable under Title I of ERISA
for the amount of tax.
The potential damages are extreme, up to $10,000 per day for a
100-employee group.
Fortunately, some gray areas have been clarified by the proposed
regulations. Consider the
following:
Number of Group Health Plans
– Employees will receive increased flexibility in determining the number of
group health plans they maintain for COBRA purposes. Such flexibility would benefit large
multi-state employers.
Mergers and Acquisitions –
The proposed regulations clarify the liabilities of buyers and sellers of
corporate stock and assets. The regulations also provide employers with the freedom to
negotiate their own agreements.
Small Employer Threshold –
Employers will be allowed to count by pay period rather than by business day for
purposes of calculating the 20-employee minimum.
Flexible Spending Accounts –
COBRA continuation for most Health Care Reimbursement Accounts will be limited
to the year of the qualifying event.
Insufficient Payments –
Certain procedures are provided for when a COBRA continuee makes an insufficient
payment due to error, or by an “insignificant amount.”
Finally, the regulations have added language to clarify the United States
Supreme Court’s decision in Geissal v. Moore Medical Corp., which
decided that employers are no longer allowed to cancel COBRA coverage because
individuals have access to a spouse’s plan or Medicare.
Employers should evaluate the proposed regulations and rules to determine
how, if at all, they would affect the employer’s COBRA compliance procedures.
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