Fourth Circuit Ruling Favors Employers in High Profile ADA Case

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On November 18, 2020, the United States Court of Appeals for the Fourth Circuit upheld a decision that retailer Lowe’s Home Centers LLC (“Lowe’s”) did not violate the Americans with Disabilities Act (ADA) when it removed a disabled store manager from his position and declined to reassign him to a similarly situated vacant managerial position.

The Plaintiff, Charles Elledge, was a long time employee of Lowe’s and had worked in a demanding position managing multiple store locations and working long hours. Elledge’s job duties included driving himself to the store locations he oversaw and walking throughout the stores during his shifts. After several knee surgeries, Elledge’s doctor ordered him to restrict his walking to no more than four hours per day, and his workday to no more than eight hours. Lowe’s complied with these light-work restrictions and attempted to further accommodate Elledge by offering him a motorized scooter to help him move around his assigned stores. Elledge declined to use the motorized scooter and did not consistently adhere to his doctor’s restrictions. Instead, he unilaterally arranged for a colleague to drive him around during his shifts and flouted his light-work restrictions by walking or working more hours than his doctor indicated he should.

Once Elledge’s work restrictions became permanent, Lowe’s determined that he could not perform the essential functions of his positon with or without reasonable accommodation, but offered to reassign him to a less physically demanding managerial position, but which offered less pay. Elledge refused the lower paying positions Lowe’s offered him and instead applied for two vacant director-level positions with pay levels similar to his current role. However, Lowe’s filled those positions with two candidates whom the company deemed more qualified than Elledge pursuant to its succession planning and best-qualified hiring policies. Ultimately, Lowe’s offered Elledge a severance package and early retirement, which he accepted.

Nevertheless, Elledge sued Lowe’s, alleging that it violated the ADA by compelling him to retire despite his ability to perform the essential functions of his job with reasonable accommodations, and refusing to reassign him to a similarly situated vacant managerial position. The U.S. District Court for the Western District of North Carolina granted summary judgment in favor of Lowe’s, finding that Elledge had failed to show he was a “fully qualified” individual under the ADA, who could perform the “essential functions” of the director-level job “with or without reasonable accommodation.” The district court further concluded that Lowe’s was not required to provide Elledge further accommodation, including reassignment to the director-level positions he applied for, after he declined the motorized wheelchair and reassignments that would have resulted in lower pay, both of which the court found were reasonable accommodations. Holding that an employer’s competitive hiring policy “effectively trumps the ADA duty to reassign” a qualified, disabled employee to a vacant comparable position, the district court reasoned that reassignment to the vacant director-level positions Elledge applied for would not have been reasonable under the ADA because the Company had determined, pursuant to its disability-neutral policies, that other candidates for those positions were more qualified.

On appeal, Elledge argued that the accommodations he accepted from Lowe’s, and the transportation assistance he arranged from his co-workers, allowed him to perform the essential functions of his job, and that Lowe’s violated his rights under the ADA by failing to reassign him to another vacant and comparable position. The Equal Employment Opportunity Commission (EEOC) filed an amicus brief in support of Elledge’s position, stating that the district court’s ruling contradicted its guidance on reasonable accommodations and “ignored the plain language of the ADA’s reasonable accommodation and reassignment provisions,” which require that if a current employee would otherwise lose their job due to a disability, they must be reassigned to any open position for which they are qualified.

Affirming the lower court’s judgment, the Fourth Circuit held that given his permanent restrictions, no reasonable accommodation would have allowed him to perform his essential job functions in accordance with Elledge’s doctor’s orders. The Court also noted that Lowe’s acted reasonably in attempting to accommodate Elledge and properly determined, under the circumstances, that Elledge was no longer qualified to perform the essential functions of his job. As a result, the Court held that Lowe’s had met its legal obligations under the ADA by offering Elledge reasonable accommodations.

Notably, the Fourth Circuit rejected Elledge’s contention that Lowe’s violated his rights under the ADA by failing to reassign him to another vacant and comparable position, as “the record demonstrates that Lowe’s extended reasonable accommodations to Elledge acting at every stage to ensure that his disability did not unfairly compromise his equality of opportunity at Lowe’s.” Indeed, as the Court pointed out, the ADA requires that reasonable accommodations be made as necessary to provide disabled employees with the same opportunities as their non-disabled colleagues. It does not require employers to construct preferential accommodations that increase workplace opportunities for their disabled employees. Importantly, the Court ruled that Lowe’s declining to reassign Elledge to the two manager-level positions he applied for was reasonable because it selected more qualified candidates for those positions in accordance with the Company’s merit-based hiring system, which the Court found was disability-neutral on its face and a “reasonable, orderly, and fundamentally fair way of directing employee advancement within the company.”

The Elledge decision reinforces prior decisions holding that while an employer’s burden to accommodate disabled employees is significant, employers need not provide a specific accommodation – including reassignment – if it is not reasonable or if another reasonable accommodation is offered. For example, employers are not required to create new positions, change the essential functions of an existing position or require other employees to perform the disabled employee’s essential job duties. Employees are not entitled to their preferred accommodation if a reasonable alternative is available.

Still, employers should exercise caution when declining to reassign a disabled employee to a vacant position, given the EEOC’s contradictory guidance on this issue and the possibility of a further appeal. In the interim, employers should consider adopting a disability-neutral merit-based hiring policy similar to Lowe’s best-qualified system or updating any existing policies regarding succession planning consistent with the Court’s decision and should strictly adhere to such policies when making hiring decisions to avoid the appearance of discrimination.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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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