In a recent case, the 4th U.S. Circuit Court of Appeals declined to decide whether small companies that are extensions of larger entities must comply with the Americans with Disabilities Act.
The court in Reynolds v. American National Red Cross (No. 11-2278, 11-2280 (Dec. 7, 2012)) said it would not address the matter in a recent disability discrimination case involving a local chapter of the Red Cross that employed fewer than 15 employees — the threshold for ADA coverage.
Benjamin Reynolds, an employee of a West Virginia chapter of the Red Cross, filed suit in the U.S. District Court for the Southern District of West Virginia (No. 5:10-cv-00443 (2011)) but that court dismissed his claims, finding that he did not have a disability. (For the facts of his disability claim, see Timing of Basis for Claim Matters, Ruling Shows, below.)
It held, however, that the chapter was an employer for ADA purposes because even though it employed fewer than 15 people, it was an “agent” of the national American Red Cross.
Reynolds appealed the disability ruling and the chapter cross-appealed, arguing that the two entities could not be counted together to meet the 15-employee threshold required to be an “employer” covered by ADA.
The court, however, declined to decide that question. The issue of whether the chapter is an “employer” under ADA is non-jurisdictional in nature, the 4th Circuit said, citing Supreme Court precedent. In other words, because a dispute existed over whether the chapter was an “agent” of the Red Cross — and therefore a covered entity — the question must be resolved at trial.
Furthermore, the cross-appeal was unnecessary because the Red Cross had already received a favorable judgment from the district court. “[T]he cross-appeal on whether the Chapter is an ‘employer’ is unnecessary, as it merely seeks affirmance of the district court’s judgment on an alternate ground,” the court said, citing United States v. Moran (393 F.3d 1, 12 (1st Cir. 2004)). “Therefore, the cross-appeal must be dismissed.”
The appellate court also vacated the lower court’s finding that the chapter was an employer because the discussion was moot. “This is because, having affirmed the district court’s judgment, our resolution of the question of whether the Chapter is an ‘employer’ would have no practical effect on the outcome of this matter,” the court said. “The customary practice when a case is rendered moot on appeal is to vacate the moot aspects of the lower court’s judgment.”
For additional information about covered employers, see Thompson’s employment law library, including the ADA Compliance Guide.