A recent $20 million settlement between the Equal Employment Opportunity Commission (EEOC) and Verizon should cause employers to review their leave and Americans with Disabilities Act (ADA) policies and procedures.  


On July 6, 2011, Verizon agreed to pay $20 million as part of a consent decree to settle a class action filed by the EEOC in federal court in Maryland, which alleged the company maintained a "no fault" attendance policy which contains multiple steps of discipline, up to and including discharge, for all absences, including absences caused by an employee's disability, except for certified FMLA leave, jury or military duty, death in the immediate family or excused time without pay. Verizon's policies mandate that when an employee accumulates a certain number of "chargeable absences" an employee is placed on a disciplinary step, and additional absences incurred during the step period result in the employee being placed in the next step, which has more serious consequences, including termination. In its operation, the EEOC alleged that an employee who was on workers' compensation leave due to a disability arising from a work-related injury was automatically terminated after one year of leave without consideration of whether a reasonable accommodation under the ADA might have allowed the employee to return to work.

Verizon denied that its leave policies violated the ADA and did not admit any wrongdoing, but under the terms of the consent decree, Verizon agreed to revise its attendance plan to examine individuals on a case by case basis, and prior to making any decision to suspend or terminate an employee's employment, Verizon agreed to make good faith reasonable efforts to determine whether or not the absence is non-chargeable. An absence is non chargeable if the employee has a disability, is absent because of the disability, the employee requested time off because of the disability, the absences have not been and are not expected to be unreasonably unpredictable, repeated, frequent or chronic, Verizon was able to determine, in an interactive reasonable accommodation process, a reasonably certain period of time that the employee will need because of the disability, and the need for time off as a reasonable accommodation does not pose significant difficulty or expense for Verizon. If these elements are not satisfied, Verizon may determine the absence is chargeable under its no fault attendance policy.

Also, the agreement obligates Verizon to post notice of the agreement, to appoint an executive to monitor the implementation of the agreement's terms, and to provide personnel who administer the attendance policies or determine whether absences are "non-chargeable" with at least 90 minutes of live ADA training. Additionally, the company agreed to report to the EEOC all employee complaints about disability discrimination linked to the attendance policies and about Verizon's compliance with the settlement agreement.  

Continuing the Trend

The Verizon settlement follows other similar large dollar settlements between the EEOC and employers regarding the same issue. On September 29, 2009, Sears, Roebuck and Company agreed to pay $6.2 million as part of a consent decree to resolve a class action lawsuit filed by the EEOC in federal district court in Chicago, alleging that the retailer's inflexible workers' compensation leave policy violated the ADA. The $6.2 million settlement award was to be distributed to individual eligible claimants through a settlement fund. The case arose from a charge of discrimination filed with the EEOC by a former Sears service technician, John Bava, who was injured on the job, took workers' compensation leave, and, although remaining disabled by the injuries, repeatedly attempted to return to work. However, Sears never found a reasonable accommodation and fired him when his leave expired. Pre-trial discovery in the lawsuit revealed that hundreds of other employees who had taken workers' compensation leave were also terminated by Sears without seriously considering reasonable accommodations to return them to work while they were on leave, or seriously considering whether a brief extension of their leave would make their return possible.  

Sears denied that its leave policies violated the ADA. But under the terms of the consent decree, the company agreed to revise its policies to: (1) notify affected employees, at least 45 days before their leaves expire, of their right to request a reasonable accommodation to return to work; and (2) inform the employees of examples of reasonable accommodations including modified duty, part-time work, reassignment, additional leave and assistive devices.  

On January 14, 2011, Supervalu Inc. agreed to pay $3.2 million to 110 former employees as part of a consent decree to settle a class action filed by the EEOC in federal court in Chicago, which alleged that the grocery giant's Jewel-Osco stores operated an overly rigid and illegal disability leave policy that violated the ADA.  

The EEOC's complaint alleged that disabled employees who were on the company's one year paid disability leave, or were eligible for it, were prohibited from returning to work unless they could return to full service without any accommodation, or physical or mental restrictions. Employees who did not return to work were terminated at the end of the one year leave period. The EEOC alleged that this practice was arbitrary and inflexible and resulted in the termination of more than 1,000 employees since 2003. (Only 110 employees were eligible for settlement proceeds.)

In addition to the monetary terms, the consent decree requires the defendants to revise their policies and fulfill various training and reporting obligations. Among them are instructions to its employees regarding how to request a reasonable accommodation and examples of the type of reasonable accommodations available, including modified duty, part time work, reassignment to a vacant position, acquisition of assistive devices, modification of equipment, and additional leave. Other requirements include the sending of letters to employees out on disability leave after 26 weeks of leave, after 40 weeks of leave, and 10 business days prior to the end of the leave. These letters must advise the employees they are not required to be free of all restrictions in order to return to work and that they have the option to request a reasonable accommodation. The letters must also include examples of such reasonable accommodations. Further, the company must, after 26 weeks of leave, 40 weeks of leave, and four weeks prior to the end of any leave, request from any third party benefits administrator (workers' compensation or disability) a copy of the most recent doctor's release or report of attending physician and use it to make a decision under the ADA whether or not the employee can return to work with or without an accommodation.