In the U.S. Supreme Court’s 2002 Barnett decision, the court held that qualified disabled employees are entitled to reassignment to an existing vacant position under the Americans with Disabilities Act if they become unable to perform the essential functions of their current job, with or without reasonable accommodation. Since Barnett, the Equal Employment Opportunity Commission and employers have taken different views on the obligation to reassign disabled employees. The EEOC takes the position that if the disabled employee is qualified for the alternative job, they must be given the position, regardless of whether there are better qualified candidates who are not disabled.

Last month, the Fourth Circuit Court of Appeals (which includes North Carolina, South Carolina, and Virginia) agreed with an employer’s assertion that Barnett allows it to maintain a corporate succession system that selects the best qualified applicant for the position, even if that decision results in a disabled employee being denied reassignment. In Elledge v. Lowe’s Home Centers LLC, the plaintiff was a market director who had oversight responsibilities over a number of stores. The job required long hours and extensive walking and driving. He had a series of knee surgeries that resulted in his physician imposing permanent restrictions on his driving, walking, and working time.

Lowe’s attempted a number of accommodations, some of which were ignored by the plaintiff. The company eventually concluded that he was unable to perform the essential functions of his position even with available accommodations, and it offered him reassignment to a lower paying job. The plaintiff rejected this offer, instead requesting that he be reassigned to one of two alternative director-level positions. Lowe’s declined this request, explaining that under its succession planning and best hiring policies, the plaintiff was not the highest qualified applicant for those positions. He sued, claiming first that he was able to perform the essential functions of his prior position, and as an alternative, that he should have been placed into one of the two open director positions under Barnett.

The district court granted summary judgment to Lowe’s, and on appeal, the Fourth Circuit panel affirmed this decision. First, the court agreed the employer had demonstrated that the plaintiff was unable to perform the essential functions of his previous job due to the permanent medical restrictions. Walking, driving, and working extended hours were all essential functions for the position. The Fourth Circuit rejected the plaintiff’s claim that despite the restrictions, he was still able to perform these functions, noting that in order to do so, he was frequently ignoring his doctor’s instructions or using unapproved accommodations that imposed an undue hardship on the employer.

Next, the Fourth Circuit concluded that Barnett’s reassignment obligation does not require employers to automatically move a disabled employee into a vacant position. If the employer demonstrates that it allowed the employee to apply for the position but then applied policies that make the ultimate hiring decision based on succession needs and the relative qualifications of the applicants, the vacant position can go to someone else. The court said that these policies enjoy the same protections granted by the Supreme Court in Barnett to seniority-based hiring systems. The ADA only requires that the employer provide the disabled employee with an equal opportunity to seek the alternative position, and not to upset otherwise neutral, business-based hiring policies.

This decision has major implications for employers in the Fourth Circuit and beyond. The court rejected the EEOC’s arguments (made in an amicus brief) that Barnett requires automatic reassignment in the absence of a seniority system. The Fourth Circuit’s conclusions mean that employers only need to give the disabled employee a fair opportunity to seek the alternative position, and employers can still select the most qualified applicant.

Employers should note that the decision in Elledge rested on Lowe’s demonstration of clear, written policies explaining the business criteria for selecting applicants. In the absence of such policies, the employer may have a more difficult time proving a bona fide selection system. Regardless, unless the Supreme Court decides to revisit this issue, Fourth Circuit employers now have added discretion with regard to their obligation to provide assignments as an ADA reasonable accommodation.