Seventh Circuit’s Ruling Means Employers Should Review Their ADA Policies and Practices

by Holland & Knight LLP
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A recent decision of the U.S. Court of Appeals for the Seventh Circuit means that employers should reevaluate their practices concerning transferring an individual with a disability to a vacant position as a reasonable accommodation under the Americans with Disabilities Act (ADA).

In a decision that reverses more than 10 years of precedent, Equal Employment Opportunity Commission v. United Airlines, Inc., No. 11-1774 (7th Cir. Sept. 12, 2012), the court ruled that the ADA generally requires an employer to transfer a disabled individual to a vacant position for which she is minimally qualified, even if there are better-qualified applicants. In other words, for now, in the Seventh Circuit, an employer can no longer avoid ADA liability simply by showing that it consistently follows a competitive selection procedure for transfers to vacant positions and chose the best-qualified candidate for the position, rather than the employee seeking the position as a reasonable accommodation.

Background

The ADA includes “reassignment to a vacant position” as a possible “reasonable accommodation” for disabled employees. 42 U.S.C. §12111(9). There is substantial agreement that an employer is not required to offer a promotion as an accommodation. But employers and courts have faced difficulty determining the extent of this requirement when an employee with a disability seeks reassignment to a vacant lateral position, but other, more-qualified employees apply for the vacant position as well.

In 2000, the Seventh Circuit ruled that the ADA did not require an employer to give preference to the disabled individual seeking a transfer as an accommodation over a better-qualified applicant. Equal Employment Opportunity Comm'n v. Humiston-Keeling, 227 F.3d 1024 (7th Cir. 2000). It stated that the “ADA does not require an employer to reassign a disabled employee to a job for which there is a better applicant, provided it’s the employer’s consistent and honest policy to hire the best applicant for the particular job in question.”

Following the Humiston-Keeling decision, in 2003, United Airlines set out Reasonable Accommodation Guidelines that address accommodating employees who, because of disability, can no longer do the essential functions of their current jobs even with reasonable accommodations. While the guidelines note that “transfer . . . [to] an equivalent or lower-level vacant position” may be a reasonable accommodation, they specify that the transfer process is competitive and that employees needing accommodation will not be automatically placed into vacant positions but instead will be given preferential treatment. Employees needing accommodation are allowed to submit an unlimited number of transfer applications, are guaranteed an interview and receive priority consideration over a similarly qualified applicant. That is, if two candidates are equally qualified, the employee-applicant seeking an ADA accommodation will get the job — but if there is a more qualified applicant, he or she will get the position.

The EEOC challenged United's policy as unlawful. It argued that an intervening Supreme Court decision (U.S. Airways, Inc. v. Barnett, 535 U.S. 391 (2002)) means that employers usually are required to award a transfer to a minimally qualified disabled employee as a reasonable accommodation and that the Seventh Circuit's 2000 decision was no longer good law.

Seventh Circuit: United's Policy is Unlawful

The Seventh Circuit, which covers Illinois, Indiana and Wisconsin, agreed with the EEOC. It stated: "The Supreme Court has found that accommodation through appointment to a vacant position is reasonable. Absent a showing of undue hardship, an employer must implement such a reassignment policy."

The Seventh Circuit returned the case to the trial court to answer two questions. First, the trial court must consider "if mandatory reassignment [of a disabled individual to a vacant position for which she is minimally qualified] is ordinarily, in the run of cases, as a reasonable accommodation." Second, "[a]ssuming that the district court finds that mandatory reassignment is ordinarily reasonable," the court must determine "if there are fact-specific considerations particular to United’s employment system that would create an undue hardship and render mandatory reassignment unreasonable."

The court identified two fact-specific considerations that could alter a requirement that a disabled individual be reassigned to a position for which he or she is minimally qualified. An employer is generally not required to assign a disabled individual to a vacant position if doing so would violate a collective bargaining agreement or a specific policy of assigning vacancies by seniority.

What Does This Mean for Employers?

The Seventh Circuit's decision has fundamentally reshaped the requirement to reassign a disabled employee who seeks a reasonable accommodation. It creates a presumption that reassigning a disabled individual to an open position she is qualified to perform is a reasonable accommodation. Absent an exceptional circumstance, a disabled employee seeking a reasonable accommodation by means of a transfer to an open position must be given preference over other candidates. The court's decision only exempts employers from this obligation where the reassignment would run afoul of the terms of a collective bargaining agreement, a unilaterally imposed seniority system or where the employer can demonstrate that the reassignment would constitute an "undue hardship." A policy that merely permits a disabled employee to apply to open positions as an accommodation, and be reassigned if she is the most qualified, is likely to be found unlawful.

The UAL decision creates a conflict among the federal appellate courts. The Tenth Circuit (covering Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming) and the District of Columbia Circuit have agreed with the Seventh Circuit, ruling that that the ADA requires employers to appoint disabled employees to vacant positions, unless such accommodations would create an undue hardship. In contrast, the Eighth Circuit (covering Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) still follows the Humiston-Keeling rule.

The decision also creates a slew of questions and conundrums for employers:

  • Do reasonable accommodation rights trump other protected characteristics (e.g., race, sex, national origin)? The answer in the Seventh Circuit appears to be “yes.”
  • Can the expectations of other employees (created by the use of merit-based criteria to award other employment benefits) make awarding a vacant position to a less-qualified disabled individual an undue hardship? It appears not.
  • What should an employer do when a minimally qualified disabled employee and a better-qualified employee who is a member of a class protected by the discrimination laws both apply for a vacant position? If the disabled employee is applying for the position as a reasonable accommodation, and there is no other accommodation that would be reasonable, then it would appear that the disabled employee should be given preference. 
  • How can the employer explain to a more-qualified individual who belongs to a protected class its decision to give a transfer to a less-qualified disabled employee (given EEOC guidance that the ADA's confidentiality requirement prohibits employers from disclosing that the individual is receiving an accommodation)?
  • Will an employer be able to defeat a discrimination claim by a more-qualified employee who is a member of a protected class by asserting that it awarded the position to a less-qualified employee as a reasonable accommodation? The answer would appear to be “yes,” because in so doing, the employer’s reason for its decision is not motivated by an unlawful animus.
  • What does an employer do when two disabled employees seek reassignment to the same vacant position? Perhaps here, the most qualified employee would be given preference. But what if an alternative accommodation was available for the most qualified employee but not the other employee?
  • What are the employer's obligations if the less-qualified disabled employee fails to meet expectations in the new position? It would appear that the law remains that a disabled employee still must perform the essential functions of the position to the employer’s legitimate expectations.

In light of these questions and possible answers, unless and until the Supreme Court resolves the conflict among the courts, employers should reassess their ADA policies and practices to address the issues raised by the Seventh Circuit's new requirement.

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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