United States: The Perfect Storm – Changes To ADA And Increased EEOC Enforcement Signal Trouble For Employers

Key Points:

• With increased funding from the federal government, the Equal Employment Opportunity Commission promises more suits against private employers.

• A chain reaction works against the employer: poor economic conditions lead to Reductions In Force, which lead to increased claims of discrimination.

• Congress reacts to Supreme Court ruling in Gross v. FBL Financial to expand ADA coverage to many ailments previously excluded from definition of "disability."

• Private employers must keep policies, and insurance, current to protect against The Perfect Storm.

The Perfect Storm. A combination of factors, great and small, signals trouble for employers throughout the country. Recent changes to the Americans with Disabilities Act ("ADA"), combined with an increase in funding for the Equal Employment Opportunity Commission ("EEOC"), the federal agency charged with enforcing the country's anti-discrimination laws through investigation and litigation, and a stated desire by the EEOC to increase its litigation efforts have created that Perfect Storm. The storm comes as no real surprise, as years of under-enforcement during one presidential administration was almost certain to lead to over-enforcement in the face of a new presidential administration. That time has come. While employers are certain to see an increase in litigation, having proper insurance coverage, and taking some basic steps to protect the employer's interests, will lessen exposure and leave employers in a better position to withstand the rigors of litigation, should it come.

The United States Equal Employment Opportunity Commission reached near record highs in the number of workplace discrimination charges filed in 2009, with the largest increases coming in disability and retaliation matters, according to the agency. For the 2009 fiscal year, the EEOC registered 93,277 charges, their second highest total ever. By comparison, from 1997 to 2007, the number of charges fluctuated from 75,428 to a high of 84,442. While the 2009 numbers represent a slight drop from 2008, several categories saw a distinct increase:

While the number of age bias claims decreased slightly, it was still the second highest total ever for the EEOC. For its part, the EEOC has promised even greater enforcement efforts, bolstered by a $15 million increase in its budget, with an additional $40 million increase targeted for 2010. As EEOC acting Chairman Stewart Ishimaru has warned, "Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC." It is not just an increased budget, and an apparent new found penchant for litigation that is troubling, as other factors mean an increase in lawsuits for employers who fail to take heed. Poor economic conditions always mean a rise in discrimination claims as reductions in force ("RIFs") lead employees to file more claims. Were this not enough, the EEOC has gone one step further and proposed changes to the regulations attendant to the ADA which certainly spell trouble for employers. Largely in reaction to recent Supreme Court cases (Gross v. FBL Financial, 129 S.Ct. 2343 (2009)), both Congress and the EEOC have sought to expand the coverage of the ADA, and anti-discrimination laws, generally. In Gross, the Supreme Court reminded would-be litigants that the burden of proof in an age discrimination ("ADEA") claim rests with the plaintiff. While Circuit Courts scrambled to seek ways to distinguish Gross (See E.G. Smith v. City of Allentown, 2009 U.S. App. LEXIS 28188 (December 22, 2009)), Congress and the EEOC seized on the backlash of a perceived attempt to limit discrimination claims and proposed new regulations that would make a plaintiff's job that much easier. While the EEOC claims that an additional one million workers will be subject to the broader definitions of disability and "regarded as" disability that it proposes, to most employers it will appear that the new EEOC regulations mean that the vast majority of their employees are "disabled" under the new definitions as it seems almost everyone fits one of the new, expanded definitions that the EEOC proposes. For example, under the new regulations, an employer must seek a reasonable accommodation for employees with post traumatic stress disorder, cancer which is in remission, or asthma that they treat with an inhaler. While not every solution demanded by an employee necessarily meets the definition of a "reasonable accommodation," the fact that employers must engage in an interactive process with an even broader range of employees is a change of which all should be aware.

While the proposed regulations specifically exclude employees who use only eyeglasses or contact lenses to correct vision, they do expand the definition of "disability" and place more of the burden on the employer than ever before. While temporary non-chronic impairments, such as colds, sprained ankles or broken bones that are expected to heal, will not be considered disabilities, impairments lasting less than six months may still be considered disabilities depending on how limiting they are. For example, a condition such as cancer, epilepsy, multiple sclerosis, HIV, major depression (other than general depression), post traumatic stress disorder, bipolar disorder and schizophrenia will automatically be considered disabilities. Other conditions will no longer be subject to an extensive analysis, with the plaintiff needing to show only that an impairment substantially limits one major life activity. Perhaps not surprisingly, the EEOC also has expanded the definition of "major life activity," which now includes walking, reading, and many major bodily functions, such as the immune system; normal cell growth; digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions. In addition, an impairment that is episodic or in remission is considered a disability if it would substantially limit a major life activity when it is active. Thus, employees are considered disabled even if they are not showing symptoms of their disease if the disease would qualify as a disability when the employee is experiencing symptoms.

While the pendulum has certainly swung, the news is not all bad. Employers who keep their policies current and subject them to periodic review may provide a great deal of protection for themselves. Changing institutional attitude is never easy, but informing human resources, managerial and supervisory personnel of the changes in the law and placing reporting systems in place that will allow competent review of discrimination claims and requests for reasonable accommodations will go a long way. Being aware of the changes to the ADA, and being proactive in your efforts, will go a long way toward protecting yourself from stepped-up enforcement by the EEOC and may well head off claims before they occur.

Finally, and perhaps most importantly, as even the best intentioned and carefully instituted policies and procedures cannot head off all claims, especially in the face of the EEOC's promised increase in litigation, employers do well to make sure their insurance coverage for such claims is in place and that they are consulting with either in-house or competent outside counsel. Notifying your insurer of such claims and allowing for their proper defense at the earliest possible stage will often limit both exposure and the company resources that must go into defense. While the EEOC, Congress and the economy may have conspired to create the "perfect storm," employers and their insurers have not been cast adrift. Read the law, update your policies, train your employees and make sure your insurance coverage is in place. These simple steps will go a long way to preventing litigation and diminishing the time, money and energy that follow institution of a suit.

*Chris is an associate in the King of Prussia, Pennsylvania, office of Marshall, Dennehey, Warner, Coleman & Goggin.

This article was originally published in the June 2010 issue of Defense Digest, newsletter of the regional defense litigation law firm of Marshall, Dennehey, Warner, Coleman & Goggin, and is reprinted with the permission of MDWC&G. This article is for educational and informational purposes only. The material contained herein is not to be construed as legal advice or to create an attorney-client relationship. www.marshalldennehey.com. Copyright © 2010 Marshall, Dennehey, Warner, Coleman & Goggin all rights reserved.

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