Risky Business: TPAs as Employers under the ADA

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Last week, in Brown v. Bank of America et al., No. 1:13-cv-00367-JAW (D. Me. March 7, 2013), a federal district court in Maine refused to dismiss a Bank employee’s disability discrimination claims against a third party administrator (“TPA”), which administered the Bank’s disability and leave claims.  The employee alleged the TPA controlled whether leave would be granted as an ADA accommodation of her PTSD after a sexual assault by a co-worker.  The TPA argued it was not the employer, but the court disagreed, finding that the employee’s complaint sufficiently alleged that the TPA might have been her employer or its agent under the ADA because it did more than simply administer benefits.  For example, the Bank instructed plaintiff to provide information to the TPA to justify leave, the TPA interacted with plaintiff and directed the information she was to provide, and the TPA informed the Bank that plaintiff was “being placed on ‘LOA-closed’ status” and directed the Bank to take action within three days.  Thus, the court found that “it may well be that the TPA was ‘intertwined’ with” the Bank as to the employee’s benefits.  Of course, being “intertwined” with the TPA would create liability for the employer as well.  Outsourcing leave decisions may not provide a defense to ADA, or any other, claims.

Topics:  ADA, Disability, Disability Discrimination, TPAs

Published In: Civil Rights Updates, Finance & Banking Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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