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Terminating Parents at Same Time Child's Tumor Reoccurs Raises Questions over Employer's Motive for Action

    Client Alerts
  • May 16, 2008

In March, EmployNews reported a Seventh Circuit decision where the court agreed with the plaintiff that her termination from work could have been tied to expenses incurred by the group medical insurance plan due to her husband’s illness.  In recent weeks, the EEOC reminded employers that under the Americans with Disabilities Act, they are prohibited from discriminating against applicants or employees due to their association with a disabled person.

Last week, the Tenth Circuit Court of Appeals came to a similar conclusion based upon alleged pressure placed on the employee to reduce cost exposure to the medical plan.  In Trujillo v. PacifiCorp, both parents worked for the employer.  When the employees’ son developed a relapse of a brain tumor, his physician recommended aggressive experimental treatments.  The employer was self-insured, and eleven days after learning of the relapse, it began an investigation of timecard falsification by the father.  Both parents were terminated after the company discovered discrepancies between their timecards and security gate logs.

The parents alleged that the termination reasons given were a pretext for the company firing them to get their son off of the group medical insurance plan as soon as possible.  They claimed association discrimination under the ADA and ERISA violations.  Although the employer offered legitimate grounds for the terminations, the Tenth Circuit concluded that the plaintiffs had provided sufficient evidence to allow the claim to proceed to a jury for a determination at trial as to the employer’s motivation.

This evidence consisted of circumstantial evidence of the company expressing concerns over rising healthcare costs attributable to catastrophic claims.  The plaintiffs were able to demonstrate internal communications raising concerns over the child’s medical expenses, as well as the company closely monitoring those costs.  When combined with the close temporal relationship between his relapse and initiation of the timecard fraud investigation, and different treatment of similar disciplinary offenses, this was enough for the court to allow the case to go to a jury trial.

The allegedly coldhearted nature of the employer’s behavior in this case may have influenced the court.  Aggressive action by employers to control the rise in healthcare costs should not in and of itself lead to an inference of discrimination under the ADA.  However, employers should not appear to “blame” employees for their or their dependents’ medical conditions.  Medical plan cost containment efforts should not focus on aggressive or inappropriate attempts to minimize exposure from participants already struggling with serious conditions.