HR Management & Compliance

10th Circuit: Fedex Regards Employee as Disabled Based on Inaccurate Aetna Claim

There are numerous reported cases that address whether an employee suffered discrimination because of a disability, but not many of them are grounded on a “perceived” disability the employee didn’t actually have.

In a recent case before the U.S. Court of Appeals for the 10th Circuit (which covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming), a high-level FedEx employee argued that he was discriminated against because his employer thought he had a particular disability—an addiction to a controlled substance. He did have a disability—severe anxiety and stress—but not the one FedEx thought he had.

His problems began when a short-term disability intake employee who worked for FedEx’s insurance company mistakenly classified him as having a substance abuse problem, leading FedEx to impose a series of adverse employment conditions as a condition of his continued employment.

Background

“James” worked for FedEx as a regional sales manager almost continually since 1989. In 2010, FedEx realigned its sales territories, giving him a much larger territory to manage. He immediately started complaining that his workload had doubled and he had to work 16-hour days. However, his supervisor summarily dismissed his complaints. That supervisor was replaced by “Henry,” who also didn’t take his complaints seriously. Among other things, Henry belittled him, told him to stop whining, and called him a “baby.”

As part of his duties, James was supposed to regularly enter sales call data into a computer program. However, for 2 months in the summer of 2011, he didn’t enter any data into the program. Alerted to his inaction, Henry attempted to contact him in early September, but he received no response.

In mid-September, “Brad” took over from Henry as James’ supervisor and began trying to contact him to ascertain why his sales call data was missing from the computer program. Several days later, James contacted Brad to tell him that he had been in the emergency room and would be off work for a few more days.

On September 26, James requested and was granted a medical leave of absence for what was described by his doctor as “chronic neck pain and anxiety.” In 2008, he had injured his neck in a car accident, and he had taken OxyContin, a prescribed narcotic, for chronic pain for 2 years. In 2010, a pain specialist prescribed Suboxone as a substitute medication for the narcotic.

In September 2011, he began trying to taper off the Suboxone on his own, but the side effects of the tapering off regime landed him in the emergency room and caused him to miss work during the same weeks his supervisors had been attempting to contact him about the missing data from the computer program.

FedEx provides a short-term disability plan for its employees administered by Aetna. On September 30, James called Aetna to file a claim for short-term disability benefits. During the intake interview, he explained that he was requesting short-term disability benefits for work-related stress and anxiety and that his withdrawal from Suboxone was preventing him from working. Based on his statement that he was tapering off the Suboxone, Aetna determined that he had a chemical dependency, defined in the disability plan to include the addictive use of alcohol or any controlled substance.

Aetna notified FedEx that James had filed a disability claim for alcohol or substance abuse. That notification set off a cascade of problems for him. First, FedEx notified him that he had to call a counseling service it used for employees with substance abuse problems. James objected, arguing he was taking time off for stress and anxiety, not substance abuse, but Brad told him that all FedEx employees with substance abuse problems had to report to the service for mandatory counseling.

Second, Brad sent James FedEx’s drug and alcohol policy, which states that all employees who seek assistance for drug or alcohol abuse have to undergo return-to-work drug testing before they are allowed to resume employment. Under the policy, he would be required to submit to follow-up drug testing for 5 years in order to remain employed.

Even though James provided multiple letters and reports in which his medical providers stated that he did not have a current substance abuse or dependence diagnosis, FedEx insisted that he had to follow the companywide protocol for employees who sought assistance for substance abuse, including the return-to-work drug testing, continued monitoring for 5 years, and complete disclosure of all his prescription medicines.

Employee Files Claims in Federal District Court

James returned to work in February 2012 after he completed his mandatory return-to-work drug testing and counseling, in which it was determined—ironically—that he didn’t have a substance abuse problem. He continued to be tested for drugs monthly until he resigned from FedEx, 2 years later.

In the meantime, James filed a lawsuit in federal district court in Utah asserting six claims against FedEx and its insurance company. Among other things, he claimed that FedEx discriminated against him based on a disability in violation of the Americans with Disabilities Act (ADA) and Aetna breached its fiduciary obligations to him in violation of the Employee Retirement Income Security Act (ERISA).

The trial court dismissed all of his claims before trial, including his claim that he had been discriminated against because of his actual disability of stress and anxiety. But the twist in his case was that he also complained that his former employer discriminated against him on the basis of a perceived disability—substance abuse—and violated the ADA when it required him to disclose his use of prescription medicine. Following the dismissal of his case at the trial court level, James filed an appeal with the 10th Circuit.

10th Circuit’s Decision

The ADA protects individuals who are “regarded” as having a physical or mental impairment that substantially limits one or more major life activities. An employee may be regarded as disabled if his employer erroneously believes he engaged in the illegal use of drugs. James argued forcefully to both the trial court judge and the 10th Circuit on appeal that he didn’t have a substance abuse problem and that he had provided FedEx multiple reports and documents to that effect.

The 10th Court stated that it didn’t need to determine whether James had a substance abuse problem, only whether FedEx had a good-faith belief that he was a substance abuser when it placed him in the mandatory drug-testing and counseling programs.

Aetna initially caused the misunderstanding when it reported to FedEx that he had filed a disability claim for alcohol or substance abuse, but the insurer wasn’t being sued. The claims were against FedEx, so the appeals court’s focus was on whether the employer held a good-faith belief in the perceived disability.

The appeals court ruled against James because he was unable to provide any evidence that FedEx hadn’t acted on Aetna’s statement in good faith. While FedEx’s treatment of him and its decision to place him in the companywide substance abuse protocol may not have been fair, that isn’t the standard of review. The governing standard is merely whether the employer had a good-faith belief that the employee was a substance abuser.

The ADA prohibits an employer from requiring an employee to undergo a medical examination or from making inquiries about the nature or severity of a disability “unless such examination or inquiry is shown to be job-related and consistent with business necessity.” James argued that FedEx violated the ADA by requiring him to provide a list of his legally prescribed medications in conjunction with his monthly drug tests.

A requirement to disclose legally prescribed medications has been held to violate the ADA in other cases when the employer is unable to show a business necessity for the request. However, if the employer can identify legitimate nondiscriminatory reasons to doubt the employee’s capacity to perform his duties, it hasn’t violated the ADA’s prohibition against medical inquiries.

The 10th Circuit sent that issue back to the trial court to determine the factual sufficiency underlying FedEx’s inquiries into James’ prescription drug use. Williams v. FedEx Corporate Services, No. 16-4032 (10th Cir., Feb. 24, 2017).

Takeaway

The 10th Circuit emphasized the established principle of law that the role of a court is not to determine whether an employer made a wise, fair, or correct decision regarding its employee. A court must prevent discrimination, not act as a super personnel department.

The issues in this case were (1) whether the employer held a good-faith belief when it required the employee to participate in its companywide substance abuse program and (2) whether the employer had a job-related or business necessity to require the employee to disclose his use of prescribed medicines.

James may have been treated poorly by his employer, but the trial court will have to determine whether FedEx’s actions were based on a good-faith belief that he was a substance abuser. If so, he is out of luck.

Barbara J. Koenig, a contributor to New Mexico Employment Law Letter, can be reached at barbara@frjlaw.com.