Inflexible Leave Policies and the EEOC

Monday, October 6, 2014

The last several years have seen the Equal Employment Opportunity Commission (“EEOC”) take an aggressive stance on inflexible leave policies.  According to the EEOC, these policies – which subject employees to termination after a maximum period of leave – are unlawful because they do not consider whether an additional period of leave might be a reasonable accommodation for individuals with a disability.  The EEOC has achieved considerable success pursuing class-action lawsuits against companies that maintain fixed leave policies, including lawsuits against Supervalu, Inc. and Sears, Roebuck & Co. that settled to the tune of $3.2 million and $6.2 million, respectively.
In May, however, the EEOC’s smooth sailing hit some headwinds when the Tenth Circuit Court of Appeals issued its decision in Hwang v. Kansas State University finding that a state university lawfully terminated a professor after she had exhausted her leave under a six-month maximum leave policy.  Although the court readily acknowledged that the professor was a capable teacher, it noted that the professor, by her own admission, had been unable to perform any duties of her position for six months.  Given the length of the absence, the court found it difficult to conceive how an absence so long “could be consistent with discharging the essential functions of most any job in the national economy today.”  And, even if it were, the court concluded that it was still “difficult to conceive when requiring so much latitude from an employer might qualify as a reasonable accommodation.”

In reaching its conclusion, the court briefly addressed the EEOC’s guidance that employers must modify a “no-fault” leave policy if an employee with a disability needs additional unpaid leave as a reasonable accommodation.  According to the court, the EEOC’s guidance did not address the preliminary question it was trying to tackle, which was:  when is a modification to an inflexible leave policy a reasonable accommodation?  Without giving a definitive answer to that question, the court found that, in this particular case, granting an additional period of unpaid leave beyond six months was simply not reasonable.

Although the Hwang decision has the potential to turn the tide on the EEOC, the agency has not sent out any signals that it sees muddy waters ahead.  Just one month after Hwang, the EEOC announced that it had reached another settlement with Princeton HealthCare Systems for $1.35 million, resolving claims concerning PHCS’s 12-week leave policy.  In its press release, the EEOC noted that “addressing emerging and developing issues under the ADA is one of six national priorities” identified in its Strategic Enforcement Plan.  Whether the EEOC chooses to clarify its position through additional guidance, or through further litigation, remains to be seen.