A Look Back At This Year´s Most Important Supreme Court Employment Law Decisions

This year’s Supreme Court docket, while host to far fewer employment-related cases than last year, is shaping up to be no less dramatic. While the Court last year chose to settle (or create) issues regarding sexual harassment, the theme this year was the Americans with Disabilities Act (ADA). Indeed, in June the Court issued several opinions clarifying employee rights and employer responsibilities under the ADA. In another case, the Court clarified the effect that an employee’s receipt of disability benefits has on a subsequent ADA claim. In addition to the ADA cases, the Court clarified the standard for a punitive damages award under Title VII of the Civil Rights Act.

The following is a brief year-end recap of these important decisions, as well as a look at the employment-related cases facing the Court this term.

Since last June, when the Supreme Court decided a trilogy of cases that clarified certain ADA definitions and requirements, courts and employers around the country have been wrestling with the implications of these decisions. Each of the Court’s three rulings represented a victory for employers, and several points addressed within the Court’s opinions and arising from them deserve attention.

One of the main issues addressed by the Court in all three cases decided in June was the definition of "disability" under the ADA. According to the statutory language of the ADA, a "disability" with respect to an individual is "(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment."¹ In order to state a claim under the ADA, a plaintiff must be able to establish that he or she is disabled within the meaning of one of these subsections.

An issue that had been raised repeatedly among the Circuit Courts of Appeal–yielding different conclusions–was whether an individual who utilizes "mitigating measures" such as medications or corrective devices to control or limit the effects of an impairment could satisfy the definition of disability under subsection (A). In a 7-2 decision in Sutton v. United Air Lines, Inc., the Court held that "the determination of whether an individual is disabled should be made with reference to measures that mitigate the individual’s impairment."² Thus, courts should look to "whether the limitations an individual with an impairment actually faces are in fact substantially limiting."³

Applying this rule in Sutton, the Court concluded that the petitioners, twin sisters whose severe myopia could be corrected by glasses or contact lenses such that they could function identically to individuals without a similar vision problem, could not claim to be disabled under subsection (A) of the statutory definition.⁴ The Court reached the same conclusion in Murphy v. United Parcel Service, Inc., finding that because the petitioner’s blood pressure was controlled by medication, his impairment did not substantially limit him in any major life activity.⁵

While the Court's holdings in these cases will limit the number of individuals who may proceed under subsection (A) of the ADA's definition of disability, the result may be that more individuals will attempt to make use of the other two avenues for demonstrating disability. In both Sutton and Murphy, for example, the petitioners also asserted claims under subsection (C), arguing that they had been "regarded as" having a substantially limiting impairment.

The Court addressed these arguments, finding two ways in which the "regarded as" definition could be satisfied: "(1) a covered entity mistakenly believes that a person has a physical impairment that substantially limits one or more major life activities, or (2) a covered entity mistakenly believes that an actual, non-limiting impairment substantially limits one or more major life activities."⁶ Thus, a violation of the ADA occurs when an employer "makes an employment decision based on a physical or mental impairment, real or imagined, that is regarded as substantially limiting a major life activity."⁷

Application of this rule in Sutton led the Court to conclude that the petitioners had not been regarded as disabled by United. At most, United regarded their poor vision as precluding them from holding the position of global airline pilot, not from numerous other positions which would utilize petitioners' skills.⁸ The petitioner in Murphy also failed to state a claim under subsection (C), because his high blood pressure caused UPS at most to regard him as unable to drive commercial motor vehicles regulated by the Department of Transportation (DOT), not as unable to perform numerous other jobs utilizing his mechanic skills.9

The Court addressed a third issue in Albertsons, Inc. v. Kirkingburg: whether an employer could use its compliance with DOT safety regulations to justify a job qualification standard, despite the existence of a DOT waiver program.¹⁰ In answering this question, the Court revisited the ADA’s statutory language regarding qualification standards. Under the Act, such standards are permissible so long as they are "job-related and consistent with business necessity, and performance cannot be accomplished by reasonable accommodation."¹¹

The Court suggested that where such a qualification is of the employer’s own devising, it would be subject to scrutiny to determine whether it was genuinely appropriate and justifiably applicable to the individual in question. Where the job qualification is based on a valid federal regulation, however, the employer has the obligation and the right to insist upon it, even when the government adopts an experimental waiver program in which the regulation at issue may, in some circumstances, be waived.¹²

Several aspects of the Court's decisions deserve emphasis, as they suggest ways in which employers can avoid liability under the ADA. First, an employer must consider all employees or potential employees individually. Employers should avoid making decisions based on prejudice, stereotypes, or their own (potentially misinformed) perception of how an impairment affects an individual. Employers defending actions under subsection (C) must be able to demonstrate that mistaken beliefs did not color their judgment regarding an employee.

Second, when determining that an employee suffers from an impairment that substantially limits them to the point of precluding them from performing a job, employers must take care to define narrowly the position from which the individual is excluded as a result of the impairment. If the employer regards the individual simply as unable to perform a specific job rather than a substantial class of jobs, the employer likely will be protected from claims under prong (C) of the ADA.

Finally, since courts will scrutinize carefully a determination that an impairment precludes an individual from holding a particular job, employers must be prepared to demonstrate that a qualification standard is job-related and necessary. Employers also must be willing to consider reasonable accommodations. Employers should re-examine their current policies to ensure that they are appropriate and valid under the ADA.

In order to receive disability benefits under the Social Security Act (SSA), an individual must demonstrate that as the result of an impairment, she is unable to work.¹³ On the other hand, an individual pursuing an ADA claim against her employer must allege that despite having a substantially limiting impairment, she is able to work; that is, she is able to perform the essential functions of her job with or without an accommodation.¹⁴ These assertions would seem to be contradictory and mutually exclusive.

In Cleveland v. Policy Management Systems Corp.,¹⁵ however, the Supreme Court held that there is no inherent conflict between pursuing both SSA disability benefits and an ADA claim. Central to the Court’s holding was its belief that "there are too many situations in which an SSDI Social Security Disability Insurance claim and ADA claim can comfortably exist side by side."¹⁶ For example, while the ADA requires employers to provide "reasonable accommodations," the SSA does not consider the availability of accommodations when determining whether the individual is disabled and eligible for benefits. Thus, a plaintiff may be able to perform her job with reasonable accommodation but be unable to do so without.¹⁷ Furthermore, because an individual’s physical condition may improve or otherwise change over time, a statement concerning disability at the time an individual applies for disability benefits "may not reflect an individual’s capacities at the time of the relevant employment decision."¹⁸

While the Court thus rejected the legal conclusion that the pursuit and receipt of disability benefits inherently conflicts with and therefore precludes a plaintiff’s successful ADA claim, the Court recognized that as a result of factually contradictory statements, "in some cases an earlier SSDI claim may turn out genuinely to conflict with an ADA claim."¹⁹ As a result, an ADA plaintiff will not be permitted to "simply ignore" such contradictions, but rather will be required to provide an "explanation of any apparent inconsistency with the necessary elements of an ADA claim."²⁰

Since the Court’s decision, two Circuit Courts of Appeal have found that ADA plaintiffs properly were precluded from asserting an ability to work for purposes of the ADA claim. In Moore v. Payless Shoe Source,²¹ the plaintiff applied for disability benefits after being injured at work, asserting that she was "unable to work." In her ADA claim, the Court of Appeals for the Eighth Circuit found no evidence that an accommodation would allow the plaintiff to perform the job; each time the plaintiff had returned to work in the past she had been re-injured and forced to leave. Thus, the Court affirmed summary judgment against the plaintiff.²²

In Mitchell v. Washington Central School District,²³ the Court of Appeals for the Second Circuit read the Supreme Court’s decision in Cleveland as permitting it to apply judicial estoppel where factual assertions would be inconsistent.²⁴ The Court found that the plaintiff’s assertions before the SSA that he was "incapable of standing for any length of time or of walking and that he required work he could perform seated,"²⁵ would clearly contradict an assertion by the plaintiff for purposes of his ADA claim that he could "stand and walk for a substantial portion of the work day."²⁶ The Court therefore precluded the plaintiff from advancing, for purposes of the ADA litigation, a position contrary to his position before the SSA regarding his ability to walk.²⁷

These decisions demonstrate that under the Supreme Court’s decision in Cleveland, plaintiffs who have made factual representations before an administrative agency such as the SSA will not be permitted simply to contradict those assertions for purposes of an ADA claim against the employer. Instead, plaintiffs will be forced to explain how apparently contradictory statements can be reconciled. If the plaintiff is unable to explain the statements satisfactorily, summary judgment on the ADA claim will be granted in favor of the employer.

Prior to 1991, damages available for Title VII violations included only equitable relief, such as back pay. In 1991, however, Congress made both compensatory and punitive damages available to plaintiffs, so long as they could prove unlawful intentional discrimination.²⁸ A further statutory limitation on punitive damages provides that they are recoverable only if the defendant "engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual."²⁹

Courts and parties alike have struggled to interpret these limitations and determine just when punitive damages are appropriate. In June, the Supreme Court took up the question. In Kolstad v. American Dental Association,³⁰ the Court concluded that "the terms ‘malice’ and ‘reckless’ ultimately focus on the actor’s state of mind."³¹ As a result, in order to be liable for punitive damages, "an employer must at least discriminate in the face of a perceived risk that its actions will violate federal law."³²

While this standard may seem light considering most employers’ awareness of the existence of Title VII, the Court stated that there would be instances where intentional discrimination were proven and yet punitive damages unavailable. For example, an employer may reasonably believe its particular action was not discriminatory, or that it was permissible because of a statutory defense or exception.

Additionally, and perhaps most importantly, the Court provided a way for employers to avoid punitive damages altogether. The Court stated that "in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer’s 'good faith efforts to comply with Title VII.'"³³

This significant statement underlines once again the importance of the development, dissemination, and enforcement of anti-discrimination policies. Such policies should define discrimination, explain that discrimination will not be tolerated, and provide multiple avenues for complaints. Such policies must assure employees that complaints will be addressed immediately and appropriately. The good-faith enforcement of such policies not only will assist an employer in avoiding liability for punitive damages, but will help avoid discrimination lawsuits altogether.

The answer to the above question is "relatively nothing." While the last two Supreme Court terms have been perhaps the most eventful in over a decade in terms of employment-related decisions, you can expect very little to change over the course of the next few months.

Of the 46 cases to be heard this term, only two should have any impact on employers. The first case, Daniel v. Florida Bd. of Regents, presents a constitutional argument: whether the Eleventh Amendment prohibits state employees from bringing suit in federal court against their government employers in order to enforce their rights under the Age Discrimination in Employment Act (ADEA). Should the Court decide that the states are immune from these types of lawsuits, state government employees will have no redress for violations of the ADEA, and perhaps other civil rights statutes.

The second case, Brzonkala v. Morrison, concerns the constitutionality of the Violence Against Women Act (VAWA). If the VAWA is upheld, the decision may have unintended consequences for employers. VAWA could be used as a vehicle to impose liability on employers for gender motivated crimes such as assault or sexual harassment. Caveat: the VAWA does not require a victim to exhaust administrative remedies, and provides for unlimited compensatory and punitive damages, plus attorney’s fees.

Also of note: On November 8, 1999, the Supreme Court agreed to consider the proper legal standard for overturning a jury verdict and granting judgment as a matter of law on claims of Age Discrimination. The case -- Reeves v. Sanderson Plumbing Products, Inc. -- will not be considered until next year.

1 Americans with Disabilities Act of 1990, 42 U.S.C.A. § 12102(2) (West Supp. 1995).

2 119 S. Ct. 2139, 2143 (1999).

3 The Court emphasized that the use of medication or a corrective device does not prevent an individual from being disabled; rather, the inquiry focuses on whether the individual is substantially limited even with the use of such mitigating measures. See Id.

4 See, Id.

5 119 S. Ct. 2133, 2137 (1999).

6 Sutton, 119 S. Ct. at 2149-50.

7 Id. 2150. On the other hand, the Act does "allow employers to prefer some physical attributes over others and to establish physical criteria." Id. Thus, "an employer is free to decide that physical characteristics or medical conditions that do not rise to the level of an impairment" or which are not substantially limiting impairments, "make individuals less than ideally suited for a job." Id.

8 Id. 2151.

9 Murphy, 119 S. Ct. at 2139.

10 119 S. Ct. 2162 (1999). An ADA plaintiff not only must demonstrate that she is disabled within the meaning of the Act, but also that she is qualified to perform the duties of her job with or without reasonable accommodation, and that she was discriminated against because of her disability. See Harris v. H & W Contracting Co., 102 F.3d 516, 518 (11th Cir. 1996).

11 42 U.S.C.A. § 12113(a).

12 See Albertsons, 119 S. Ct. at 2171.

13 See 42 U.S.C.A. § 423(d)(1)(A).

14 See 42 U.S.C.A. § 12111(8).

15 119 S. Ct. 1597 (1999).

16 Id. at 1602.

17 See Id.

18 Id.

19 Id.

20 Id. at 1603-04.

21 No. 97-2110, 1999 WL 619058 (8th Cir. 1999).

22 See Id. at *2-3.

23 No. 98-7185, 1999 WL 627019 (2nd Cir. 1999).

24 Judicial estoppel forbids a party "from taking a position inconsistent with one successfully and unequivocally asserted by the same party in a prior proceeding." Teledyne Indus., Inc. v. NLRB, 911 F.2d 1214, 1217 (6th Cir. 1990).

25 Mitchell, 1999 WL 627019.

26 Id.

27 See Id.

28 See 42 U.S.C. § 1981a(a)(1).

29 Id. § 1981a(b)(1).

30 119 S. Ct. 2118 (1999).

31 Id. at 2124.

32 Id. at 2125.

33 Id. at 2129 (quoting 139 F.3d 958, 974 (1998) (Tatel, J., dissenting)).

First published in December 1999