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Inflexible Return-to-Work Policy is Risky Business

by Emily Hobbs-Wright

Employers that have a policy of automatically terminating employees who fail to return to work after they’ve exhausted their workers’ compensation leave need to be aware that such a policy puts them at risk of a class-action lawsuit under the Americans with Disabilities Act (ADA). Read on to learn more about the largest ADA settlement in the history of the Equal Employment Opportunity Commission (EEOC) and how you can take steps to avoid the threat of similar litigation.

HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including the Americans with Disabilities Act

On September 29, 2009, a federal district court in Illinois approved a $6.2 million settlement of an EEOC class action filed on behalf of former employees who were fired under a policy that required automatic termination of injured workers at the conclusion of their workers’ comp leave. The settlement is the largest Americans with Disabilities Act settlement in the EEOC’s history.

In the lawsuit, several former employees of Sears Roebuck & Co. who claimed they were disabled under the ADA alleged that the company violated the statute by failing to explore reasonable accommodations that would have allowed them to return to work after their workers’ comp leave had expired. The ADA requires employers to accommodate disabled workers unless doing so would result in an “undue hardship” — defined as an action requiring significant difficulty or expense.

The case didn’t go to trial, so it’s unclear how the claims would have been resolved by a jury. However, the details of the settlement provide guidance on best practices.

Settlement agreement
In addition to paying $6.2 million, Sears will be required as part of the settlement to revise its internal policies to notify injured employees at least 45 days before the expiration of their leave period that they can request an accommodation to enable their return to work. The revised policy must give examples of the types of accommodations available, such as modified duty, part-time work, reassignment, and extended leave.

To manage the process going forward, Sears will put in place a centralized leave-management team to transition injured workers back to work and explore alternative work arrangements, like reassignment to another job.

Americans with Disabilities (ADA) Compliance Manual

Takeaway for employers
Because of the size of the Sears settlement and recent amendments to the Americans with Disabilities Act that broaden the Act’s scope, the EEOC likely will be on the lookout for companies with similar “return-to-work-or-you’re-fired” policies. Employers should review their existing leave policies — whether they’re for workers’ comp or the Family and Medical Leave Act (FMLA) — and omit any statement that provides for automatic termination if an employee fails to return when his leave expires. Employers that terminate disabled workers whose leave has expired without seriously exploring all reasonable accommodations risk violating the ADA.

Instead of automatic termination, consider reasonable accommodations like extended leave, light-duty work, or reassignment to another job. For example, extending the leave period beyond the expiration of the 12-week FMLA allowance by a few weeks, or even a few months, may be necessary to accommodate employees who are protected by the ADA. If you offer appropriate accommodations to employees who are unable to return to work following leave for an injury or a disability, you’ll be in good shape to argue that you complied fully with the requirements of the ADA.

For more information on the ADA and reasonable accommodations, contact Emily Hobbs Wright at (303) 295-8584.

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