The legal worlds of workers’ compensation law and the laws against disability discrimination sometimes collide and leave employers with difficult decisions about how to comply with each. Earlier this month, the U.S. Court of Appeals for the Sixth Circuit (which covers Ohio, Michigan, Kentucky, and Tennessee) issued a decision that serves as a cautionary tale to employers that impose work restrictions upon an employee based on what they perceive their responsibilities to be under a workers’ compensation or some other administrative order.

The Court held that the employer violated the Americans With Disabilities Act (“ADA”) when it imposed overbroad medical restrictions and unpaid leave upon an employee based on the employer’s own interpretation of a workers’ compensation order instead of an individualized inquiry into an employee’s actual medical condition. (Jones v. Nissan N. Am. Inc., 6th Cir., No. 09-5786, unpublished opinion 8/18/11).

Thus, no matter what a workers’ compensation order or other administrative order might say, employers must undertake an individualized inquiry into an employee’s capabilities before imposing work restrictions that have an adverse effect on the employee’s employment.

Factual Background

The case involved Mark Jones, an employee who worked for a Nissan manufacturing plant. Jones injured his elbow in 2003 while working the “hood install” job. He eventually required surgery in September 2004 and was cleared to work with no restrictions in January 2005. Jones’ treating physician for workers’ compensation purposes, who was on Nissan’s approved list, assigned an “anatomical impairment rating of 3%” to Jones’ right arm.

A year later, Jones visited the treating physician again, complaining of right arm pain. By this time, Jones worked in a “body trim fits” job, where he used hand tools to adjust panels on vehicle bodies. His doctor again released him to return to work with no restrictions.

Meanwhile, during his workers’ compensation trial for his 2003 elbow injury, the judge concluded that Jones “couldn’t probably do the job he was doing at the time of his injury [i.e., hood install] because it required lots of lifting and more use of vibratory tools.” Although the judge concluded Jones could use the hammer and chisel in his body-trim-fits job, he noted that the hammer and chisel use was a “light type of use” that did not cause Jones the same type of pain and difficulty as the use of heavier duty “vibratory tools.” The Judge found a “30% permanent disability to the right arm.” The written ruling also noted Jones’ restrictions on working with power tools and heavy lifting.

Afterward, Nissan interpreted the court’s order as affirmatively ordering broad medical restrictions and restricted Jones from lifting and using power tools. Significantly, Nissan also restricted Jones from using hand tools in his job, even though the judge’s order said nothing of hand-tool restrictions.

Based on these restrictions, Nissan found that there were no jobs in the plant that Jones could perform. Over Jones’ objection, Nissan placed Jones on unpaid medical leave. In 2007, Jones obtained a job elsewhere, and Nissan fired Jones for violating its policy requiring advance approval prior to taking other employment.

Jones then sued Nissan alleging that Nissan regarded him as disabled and discriminated against him under the ADA. In other words, Jones argued that Nissan regarded him as having a “substantially limiting” physical impairment when he did not, in fact, have one that prevented him from performing his job. At trial, the jury returned a defense verdict for Nissan. Jones appealed to the Sixth Circuit.

Nissan Inappropriately Relied on its Own Overbroad Interpretation of a Court Order

For its defense, Nissan contended that it could not disregard a workers’ compensation order and was merely attempting to comply with the state court ruling. Nissan’s reliance on the court order, however, did not insulate it from ADA liability under a “regarded as” theory.

Under Sixth Circuit precedent, an employer is required to conduct an “individualized inquiry” into an employee’s “actual medical condition” when deciding whether an impairment disqualifies that employee from a particular job.

The court of appeals found that the workers’ compensation order did not require Nissan to restrict Jones from continuing in the body-trim-fit position he previously held. The court also found that the record contained no evidence that Nissan performed the “individualized inquiry” required by the ADA. Indeed, Nissan had relied completely on the court order as imposing a medical restriction, even though the court did not purport to make any medical judgment with respect to Jones’ physical capability.

The court of appeals then reversed the judgment in Nissan’s favor, found in favor of Jones, and ordered the trial court to determine the amount of damages Jones should recover.

Employer Takeaway: The Employer Cannot Shortcut the ADA’s Individualized Inquiry

This decision serves as a reminder about the requirements of the ADA and the perils that can befall even those well-meaning employers that seek to comply with workers’ compensation orders. To comply with the ADA, no matter what a workers’ compensation order or other administrative order might say, employers must undertake an individualized inquiry into an employee’s capabilities before imposing work restrictions that have an adverse effect on the employee’s employment.