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Seventh Circuit Allows ADA Claim Based on Concerns over Cost of Spouse's Medical Treatment

    Client Alerts
  • March 21, 2008

The definition of a protected disabled individual under the Americans with Disabilities Act includes not only persons with medical conditions, but also those with histories of medical conditions, or even persons wrongly regarded as having a disabling medical condition.  Few employers realize that ADA protections also extend to employees and applicants who are “associated with” someone with a disabling medical condition.  A new decision from the Seventh Circuit Court of Appeals, Dewitt v. Proctor Hospital, illustrates the potential liability faced by employers whose employees have sick dependents

The suit was filed by a nurse who claimed that she was terminated after the hospital, which was self-insured for medical insurance purposes, complained to her about the costs of her husband’s cancer treatment, and the effect of such costs on the entire medical plan.  The hospital had questioned the legitimacy of the medical expenses, and asked the employee to consider less expensive alternative care options.  After she was fired as part of the hospital’s cost-cutting measures, the employee sued, alleging that she had been discriminated against under the ADA due to her husband’s disability.

On appeal, the Seventh Circuit reversed summary judgment for the defendant on the employee’s ADA claim, sending the matter to a jury for trial.  The court concluded that she had raised a genuine issue of material fact as to whether her termination was motivated by the hospital’s desire to get her husband off of the medical plan as soon as possible.  The hospital was damaged by its failure to adequately document legitimate reasons for the plaintiff’s selection for layoff that did not relate to the medical insurance issue.

In this case, the employer’s attempts to control costs under its self-insured group medical plan backfired, and gave rise to an ADA claim by a terminated employee.  While employers are entitled to explore such cost saving measures, they must understand that getting rid of the covered employee or dependent is an impermissible way of seeking to reduce such costs.  This case also points out the importance of clear documentation of selection criteria used in group layoffs to rebut claims that the decisions were made for illegal reasons.