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Maximum Leave Policies Can Cost Employers – Big Time

UPS recently agreed to pay a $2M to settle a disability discrimination suit brought by the EEOC relative to its maximum leave policy. The company’s policy required “administrative separation” if an employee was unable to return to work after 12 months.  The EEOC said this inflexible leave policy violated the ADA. In addition to the $2M, UPS agreed to update its policies on reasonable accommodation to include extended leaves of absence; improve implementation of its interactive process; conduct ADA training for management; and submit reports regarding its compliance for 3 years.

What is an inflexible leave policy?

Maximum leave policies (sometimes referred to as “no-fault” or “inflexible” leave policies) provide for automatic or administrative termination of employees after they reach a set leave limit. These policies come in a variety of forms, some simply track applicable FMLA requirements, some limit the amount of leave an employee can take in a given period, and some – as in the UPS case – call for separation after a fixed period, e. g. 6 or 12 months. These neutral absence control policies in the context of workers’ compensation were specifically upheld in Connecticut in Chiaia v. Pepperidge Farms, in which Attorney Christopher Hodgson represented the company.

The EEOC’s position

Despite UPS’ generous maximum leave policy, the EEOC said it violated the Americans with Disabilities Act (ADA) because its automatic termination did not allow the employer and employee to engage in the interactive process as required by the ADA.  According to the EEOC guidance issued in May 2016, an employer must modify its inflexible leave policy to provide additional unpaid leave as a reasonable accommodation unless another effective accommodation would allow the employee to perform the essential functions of his/her job or granting additional leave would be an undue hardship.  The guidance identifies inflexible leave as one of three leave-related employer practices it sees as a violation of the ADA; the other two are (1) 100% healed policies and (2) failure to allow employee transfer to vacant alternative positions.

What do the courts say?

Although EEOC has taken a strong position, there does not appear to be a bright line rule among the federal courts.  In the Second Circuit, which includes Connecticut and New York, courts have held that a reasonable accommodation under the ADA may include offering a limited amount of additional leave over and above a uniformly applied “neutral” leave policy.  See, Graves v. Finch Pruyer & Co. (2nd Cir. 2006) A recent District Court case in Connecticut, the Court took the majority view and held that “a disabled employee’s request for leave to recover from a medical condition that causes a disability may, under certain circumstances, constitute a request for reasonable accommodation under the ADA. The key is an employer’s willingness to consider definite and short extension of leave period, however, the court noted this does not require an employer hold a position open for an indefinite period of time. Green v. Cellco Partnership, (D. Conn. 2016)

Your takeaway

So, although employers are allowed to have leave policies that establish the maximum amount of leave an employer will provide or permit, they may, depending on the facts of the particular situation, have to grant leave for a definite period beyond the maximum policy amount as a reasonable accommodation to employees who require it because of a disability, unless the employer can show that doing so will cause and undue hardship.