The Equal Employment Opportunity Commission (EEOC) recently announced a $2 million settlement in its class action disability discrimination lawsuit against nationwide retailer Dillard’s.  The lawsuit was venued in the U.S. District Court for the Southern District of California and challenged two practices that the EEOC alleged violated the Americans with Disabilities Act (ADA).

Medical Documentation Policy:  The EEOC alleged that Dillard’s maintained a policy that required all employees to disclose the exact nature of their medical conditions in order to be approved for sick leave.  Under the policy, a simple verification from an employee’s doctor that an absence was due to a medical reason was insufficient.  Many employees felt uncomfortable disclosing the precise nature of their conditions in order to justify an absence.  The EEOC argued that the policy was inconsistent with the requirement under the ADA that employers can only make inquiries into the disabilities of their employees when doing so is job-related and necessary for the conduct of business.

Maximum Leave Policy:  The EEOC also alleged that Dillard’s enforced a maximum-leave policy, which limited the amount of health-related leave an employee could take.  In practice, Dillard’s did not regularly engage in the interactive process with employees to determine if more leave was allowed under the ADA as an accommodation for the employee’s disability.  The EEOC argued that this practice was inconsistent with the ADA’s reasonable accommodation requirements.

Under the terms of the settlement, Dillard’s agreed to pay $2 million to identified victims of the policy and to create a fund to compensate additional, unidentified victims.  Dillard’s also agreed to:  (i) hire a consultant with ADA experience to revise the company’s policies; (ii) post documentation related to the settlement; (iii) implement training for supervisors and staff on the ADA, with an emphasis on medical inquiries and maximum leave policies; and (iv) develop a centralized tracking system for employee complaints involving disability discrimination.

Takeaways:  Policies and practices that do not comply with the ADA expose employers to unnecessary risk.  The Dillard’s case presents a good opportunity for employers to review their medical documentation and maximum leave policies and practices to correct any potential problems before liability arises.