United States: Third Circuit Affirms Judgment In Favor Of Employer In ADA Action, Finding That Compliance With NRC Regulations Justified Employee's Termination

Executive Summary: Recently, the United States Court of Appeals for the Third Circuit in McNelis v. Pennsylvania Power & Light Company affirmed the district court's grant of summary judgment to the employer in a lawsuit alleging disability discrimination under the Americans with Disability Act (ADA), finding the employer properly terminated a security guard at a nuclear plant after he was declared "unfit for duty" pursuant to Nuclear Regulatory Commission (NRC) regulations and lost his security clearance. The Court of Appeals found that the former employee was not a "qualified individual with a disability" under the ADA since he was required to be fit for duty and maintain a security clearance to be able to perform the essential job functions of his position under NRC regulations, a conclusion supported by lower court decisions. Finally, the Court of Appeals found that the implementing regulations to the ADA, 29 C.F.R. § 1630.15(e), provided a defense to the employer when a regulatory requirement collided with the ADA- "that a challenged action is required or necessitated by another Federal law or regulation, or that another Federal law or regulation prohibits an action . . . that would otherwise be required."

Background of the Case

The employer, Pennsylvania Power & Light Company (PPL) is a nuclear plant operator subject to the regulations issued by the NRC. One regulation requires PPL to have a "fitness for duty" program to make sure that "individuals are not under the influence of any substance, legal or illegal, or mentally or physically impaired from any cause, which in any way adversely affects their ability to safely and competently perform their duties." Another provision requires PPL to immediately stop an employee from performing his or her job duties if the employee's fitness is determined to be "questionable." NRC regulations also require PPL to have an "access authorization program" to monitor employees granted access to sensitive areas of the plant. Under its access authorization program, PPL is required to "provide high assurance" that employees "are trustworthy and reliable, such that they do not constitute an unreasonable risk to public health and safety or the common defense and security." The regulations require employees to undergo a psychological assessment that evaluates "the possible adverse impact of any noted psychological characteristics on the individual's trustworthiness and reliability" before they are granted unrestricted access. The regulations also require PPL to implement a "'behavioral observation program' to identify aberrant behaviors," and all employees have a duty to report suspicious behavior, which triggers a reassessment of an employee's access. Where "an official believes the employee's trustworthiness or reliability is questionable, the official must terminate the employee's unrestricted access during the review period."

In 2009, PPL hired plaintiff Daryle McNelis as a Nuclear Security Officer, which gave him unrestricted access to PPL's plant. He "was responsible for, among other things, protecting its vital areas and preventing radiological sabotage," and carried a firearm. In April 2012, McNelis began to experience "personal and mental health problems," including a problem with alcohol and separation from his wife. McNelis sought treatment at a "psychiatric facility," and the treating physician's initial evaluation "noted paranoid thoughts, . . . sleeplessness, [and] questionable auditory hallucinations." He was discharged after three days with "with instructions to '[d]iscontinue or reduce the use of alcohol.'" A concerned friend and co-worker of McNelis, aware of McNelis's problems, reported his concerns to PPL management pursuant to company policy and NRC regulations. PPL placed McNelis's "unrestricted access . . . on hold pending medical clearance." McNelis was interviewed and evaluated by a third-party psychologist who opined, in two reports, that McNelis was "not fit for duty pending receipt and review of a report from the facility where he receives an alcohol assessment and possibly treatment." Based on the psychologist's reports, "PPL revoked McNelis's unescorted access authorization and terminated his employment." McNelis filed an unsuccessful internal appeal then filed suit in district court alleging that PPL violated the ADA by terminating his employment. The district court granted PPL's motion for summary judgment and McNelis appealed.

The Third Circuit's Decision

The Court of Appeals began its analysis by reviewing the requirements of an ADA disability discrimination claim under the "regarded as" prong. McNelis alleged that PPL erroneously regarded him as having "a disability in the form of alcoholism, mental illness and/or illegal drug use, and that this misperception was a motivating factor in his firing." The Court of Appeals stated that to make out a prima facie case under the ADA, McNelis had to establish the following elements: "(1) [that he] has a 'disability,' (2) is a 'qualified individual,' and (3) has suffered an adverse employment action because of that disability." [quoting Turner v. Hershey Chocolate USA, 440 F.3d 604, 611 (3d Cir. 2006)]. The court and the parties agreed that the critical question was whether McNelis "is a qualified individual."

Next, the Court of Appeals examined the EEOC's regulations that address the "qualified individual" inquiry. To be considered a "qualified individual" the plaintiff "must satisfy the prerequisites for the position, such as possessing the appropriate educational background, employment experience, skills, licenses, etc.," and "be able to "perform the essential functions of the position held or desired, with or without reasonable accommodation." [quoting 29 C.F.R. Pt. 1630 (Appendix)]. The Third Circuit found that McNelis's ADA claim failed as a matter of law since he "could not perform the 'essential functions' of his job," which under NRC regulations required that he "be fit for duty" and maintain "unescorted security clearance." As support for its conclusion, the Court of Appeals cited numerous district court decisions finding that employees at nuclear plants who have been deemed to be unfit for duty or lost their security clearance are not qualified individuals under the ADA.

In further support, the court also cited decisions from other circuit courts of appeal holding that persons unable to meet DOT's regulatory requirements were not qualified individuals under the ADA. Moreover, the Third Circuit stated that its conclusion was consistent with the U.S. Supreme Court's decision in Albertson's, Inc. v. Kirkingburg, 527 U.S. 555 (1999), which found that employers have an "unconditional obligation to follow the [DOT] regulations and [a] consequent right to do so...." In addition, the Court of Appeals cited the EEOC's ADA regulations (29 C.F.R. § 1630.15(e)) that provide employers with a defense when "a challenged action is required or necessitated by another Federal law or regulation, or that another Federal law or regulation prohibits an action . . . that would otherwise be required."

The court ended its analysis by rejecting McNelis's various arguments, including his argument that a jury should have been permitted to second guess the third-party psychologist's fitness assessment. The court cited the Supreme Court's decision in Murphy v. United Parcel Serv., Inc., 527 U.S. 516, 522 (1999), for the proposition that "a court should not 'second-guess' a physician's determination that an employee failed to meet the regulatory requirements of his job." The court further noted that NRC regulations "prohibited" PPL from questioning the findings of the third-party psychologist. Therefore, the Court of Appeals affirmed the district court's grant of summary judgment to PPL.

Employers' Bottom Line: The Third Circuit's decision in McNelis highlights the important role that certain federal laws and regulatory requirements can play in ADA litigation, particularly those that apply to safety-sensitive positions. For example, federal laws and regulations such as those issued by the NRC and DOT set standards that may directly impact the issue of whether an employee is a qualified individual for purposes of the ADA. Moreover, employer actions taken in compliance with federal laws or regulations that establish fitness or other employment standards may provide employers with a defense when they conflict with the requirements of the ADA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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