In Walton v. U.S. Marshall Service, the Ninth Circuit clarified the legal standard for establishing a "regarded as" disability discrimination claim. Naomi Walton, a court security guard, was terminated from her employment after failing to meet her employer's hearing standard. Medical tests revealed Walton had difficulty localizing the direction of sound because she had only one functioning ear. Walton's employer concluded that her medical condition posed a significant risk to the health and safety of herself and others, and it terminated her employment. Walton sued for disability discrimination under the federal Rehabilitation Act ("the Act") claiming that her employer "regarded" her as being disabled. The court dismissed her claim, and the Ninth Circuit affirmed.

In its affirmance, the Ninth Circuit articulated a two-part test to establish a "regarded as" disability discrimination claim. The employee must prove that: (1) the employer believes that the plaintiff has some impairment, and (2) the employer subjectively believes that the plaintiff is substantially limited in a major life activity. If the employee lacks direct evidence of the employer's subjective belief that the employee is substantially limited in a major life activity, the employee may nevertheless establish the second part of the test with evidence that the imputed impairment is objectively substantially limiting.

Applying this rule, the Ninth Circuit found that Walton could demonstrate only that her employer regarded her as having an "impairment" (i.e. the inability to localize sound), and she presented no evidence that her employer considered the impairment to be "substantially limiting" in one or more major life activities. The court found that standing alone, Walton's failure to meet her employer's hearing standards did not support a finding that her employer regarded her as disabled.

Employers should be aware that, under California's Fair Employment and Housing Act, a plaintiff need only show that she has a physical or mental condition that merely "limits" a major life activity (not "substantially limits," as required under ADA and the Rehabilitation Act claims) to establish that she is disabled or regarded as disabled by her employer.