Mandatory Preference vs. Disability-Neutral Workplace Policies

Recently, on September 7, 2012, employers faced a blow when the Equal Employment Opportunity Commission (“EEOC”) achieved a major victory in the Seventh Circuit Court of Appeals with regard to the reassignment rights of an employee under the Americans With Disabilities Act of 1990 (“ADA”). In the case between the EEOC and a major air carrier, the Seventh Circuit reversed its own precedent which held that the ADA does not require employers to accommodate an employee with reassignment to a vacant position where another applicant is more qualified and the employer’s established policy is to select the most qualified candidate. In the wake of this case, an employer may be required to grant a requested accommodation that would violate a disability-neutral workplace policy, such as a best-candidate policy requiring a competitive selection process. This holding represents a significant departure from the widely-held view that the ADA is not “a mandatory preference statute,” and will likely have lasting implications for employers.

Here the EEOC challenged that the “reassignment” accommodation requirement under the ADA requires employers to reinstate employees who lost their positions due to disability to a vacant position for which they are qualified. The EEOC relied on the United States Supreme Court's ruling in the Barnett case, 535 U.S. 391 (2002), to support its contention that the ADA’s reassignment requirement may trump an employer’s policy requiring a competitive hiring process. In Barnett, the Supreme Court analyzed reassignment under the ADA in the context of a seniority system. After incurring a back injury, Barnett invoked his seniority status to obtain a transfer to the mailroom. Thereafter, two more senior employees submitted bids for the mailroom position. Barnett asserted that his reassignment was a reasonable accommodation under the ADA because he was a disabled individual capable of performing the essential functions of the mailroom job. The Court observed that “[t]he simple fact that an accommodation would provide a ‘preference’—in the sense that it would permit the worker with a disability to violate a rule that others must obey—cannot, in and of itself, automatically show that the accommodation is not ‘reasonable.’” Ultimately finding this accommodation constituted an undue hardship on the employer, the Court outlined the following two-step, case-specific approach: (i) an employee must show that the accommodation is reasonable on its face, i.e., “ordinarily or in the run of cases” and, if the employee is successful, (ii) the employer must then “show special (typically casespecific) circumstances that demonstrate undue hardship in the particular circumstances.”

In light of Barnett, the Seventh Circuit revisited its ruling in Humiston- Keeling in which a disabled employee had applied for several clerical positions but was rejected in favor of a more qualified applicant, which resulted in her termination. The employer had in place a bona fide policy that awarded a vacant position to the most qualified applicant rather than the first qualified applicant. Rejecting the EEOC’s interpretation of the “reassignment” accommodation as requiring that a qualified disabled person be entitled to a preference over a more qualified nondisabled person, the court concluded that the ADA does not “require employers to give bonus points to people with disabilities, much as veterans’ preference statutes do.” The court further observed that a policy of giving the job to the best applicant is legitimate and nondiscriminatory and that decisions on the merits are not discriminatory.

However, the full-member panel of the recent Seventh Circuit case determined that its reasoning in Humiston-Keeling was no longer valid. The court noted that the Barnett Court flatly rejected its anti-preference interpretation of the ADA by noting that this contention “fails to recognize what the Act specifies, namely, that preferences will sometimes prove necessary to achieve the Act’s basic equal opportunity goal.” Moreover, the court observed that “[m]erely following a ‘neutral rule’ did not allow (the employer) to claim an ‘automatic exemption’ from the accommodation requirement of the Act” in Barnett. While the defendant’s (in this Seventh Circuit case) policy provided preferential treatment for reassignment of disabled individuals to vacant positions, it only enabled disabled employees “to submit an unlimited number of transfer applications, be guaranteed an interview and receive priority consideration over a similarly qualified applicant—that is, if two candidates are equally qualified, the employee-applicant seeking accommodation will get the job.” Accordingly, the Circuit Court remanded the matter to the district court to apply the two-part test established in Barnett.

That means that the court must first determine whether the accommodation is “reasonable in the run of cases.” If so, the employer must then demonstrate “that granting the accommodation would impose an undue hardship under the particular circumstances of the case.” If not, the employee may nevertheless prevail by demonstrating “special circumstances warrant a finding that the accommodation is reasonable under the particular circumstances of the case.”

Other Jurisdictions

Although Humiston–Keeling is now overruled in the Seventh Circuit, several other circuits have relied on this decision in reaching similar outcomes. For example, the Eighth Circuit explicitly adopted a similar reasoning when it determined that an employer does not run afoul of the ADA by denying reassignment to a disabled applicant as a result of an established policy of filling vacant job positions with the most qualified applicants. In a case against a major retailer (486 F.3d 480, 483-84 (8th Cir. 2007)), the plaintiff-employee was injured and, as a result, she sought reassignment to an equivalent vacant position as a reasonable accommodation. Pursuant to its policy of hiring the most qualified applicant for the position, the employer required plaintiffemployee to apply and compete for the position with other applicants resulting in her being denied the position. In a case of first impression in the Eighth Circuit, the court held that “the ADA is not an affirmative action statute and does not require an employer to reassign a qualified disabled employee to a vacant position when such a reassignment would violate a legitimate nondiscriminatory policy of the employer to hire the most qualified candidate.” Interestingly, the Eighth Circuit also relied on Barnett to reach this decision by equating seniority status with qualifications.

Conversely, the Tenth Circuit took that position that the ADA may require reassignment as a reasonable accommodation notwithstanding an employer’s bona fide policy of selecting the most qualified applicant for a vacant position. In Smith v. Midland Brake, Inc., a Div. of Echlin, Inc., 180 F.3d 1154 10th Cir. 1999), the court adopted the EEOC’s position prior to Barnett, determining that “the reassignment obligation must mean something more than merely allowing a disabled person to compete equally with the rest of the world for a vacant position.” The court further observed that “[i]f a disabled employee had only a right to require the employer to consider his application for reassignment but had no right to reassignment itself, even if the consideration revealed that the reassignment would be reasonable, then this promise within the ADA would be empty.” Thus, the court held that requiring a qualified disabled employee to compete for a vacant position does not comport with the ADA’s reasonable accommodation requirement for reassignment.

Conclusion

The recent turnabout demonstrated by the Seventh Circuit adopting the EEOC’s position regarding reassignment as a reasonable accommodation may signal a significant shift in how courts will interpret this requirement post-Barnett. Employers may no longer be insulated from providing reassignment simply because of an established disability-neutral workplace policy. While it appears that an established seniority-based system may be beyond the purview of the reassignment obligation of the ADA, a “best candidate” policy will be subject to significant scrutiny in the event a qualified disabled individual is rejected for the position. Moreover, a policy merely providing preference to similarly-qualified disabled individuals with regard to reassignment to vacant positions will likely be challenged as running afoul of the ADA.