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Employer Pays $4.85 Million to Settle ADA Lawsuit Over Maximum Leave Policy

    Client Alerts
  • November 30, 2012

Virtually every month, we see at least one employee leave policy that provides a maximum leave period (often 12 weeks or six months) after which employment will be automatically terminated if the employee cannot return to work. These policies are relics of pre-ADA days, and can lead to serious problems for employers if their terms are actually put into practice. Earlier this month, the EEOC announced that it had settled a lawsuit filed against an interstate trucking company accused of applying a maximum leave policy.

EEOC v. Interstate Distribution Co. involved an employer policy that provided a maximum leave of 12 weeks. In addition, employees were not permitted to return to work unless they were released without medical restrictions. The EEOC filed a class action ADA claim against the company, alleging that up to 300 former employees were adversely affected by this policy.

Under the ADA, employers are required to conduct an individual accommodation analysis to determine obligations to an employee on leave, even one who has exhausted his or her 12-week Family and Medical Leave. In some cases, employers may be required to provide additional unpaid leave beyond FMLA as a form of reasonable accommodation. The individual analysis should determine whether such additional leave is likely to allow the employee to return to work in a relatively short period of time, and whether such leave (taking into account the FMLA absence) presents an undue hardship on the employer. In addition, employees with medical restrictions should be reviewed to determine if they can perform the essential functions of the job with or without accommodation.

Maximum leave policies violate the ADA because they do not allow for this individual analysis. In situations where the maximum leave is six months, there may be very few cases where additional leave will be reasonable. However, even in these situations, performing this analysis shields the employer from certain damages claims based on failure to provide accommodation.

Employers should review their leave policies to make certain that they provide flexibility for providing required ADA accommodations. Under the settlement agreement, Interstate Distribution agreed to pay $4.85 million, and to implement a series of policy changes, employee training and outside monitoring of its employee leave decisions.