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Employers Are Advised to Review Disability Leave Policies in Light of $4.85 Million EEOC Settlement with Trucking Company

December 27, 2012

Recently, national trucking company, Interstate Distributor Co. (Interstate), paid $4.85 million to settle a lawsuit brought by the Equal Employment Opportunity Commission (EEOC) over Interstate’s allegedly unlawful disability leave policies. The EEOC and nine former employees alleged Interstate’s policies violated the Americans with Disabilities Act (ADA) because employees were automatically discharged after exhausting their 12 weeks of leave afforded under the Family and Medical Leave Act (FMLA), unless they could return to work without any medical restrictions. The EEOC alleged that Interstate’s policies denied reasonable accommodations under the ADA to hundreds of disabled employees since 2007. Interstate also purportedly failed to engage in an “interactive process” with the disabled employees to determine what, if any, reasonable accommodations could be implemented to allow the employees to continue employment.

In addition to paying $4.85 million to settle the case, the settlement places a myriad of other requirements on Interstate through 2015. According to the settlement, Interstate must provide the EEOC “a list of all employees disqualified from employment for illness or injury-related reasons” since 2007 to identify the aggrieved employees that will receive notice that they are eligible to receive payment from the settlement fund. Any amounts remaining in the fund after distribution to the aggrieved employees must be donated to a local non-profit disability rights organization. Additionally, the settlement requires Interstate to: (1) implement new anti-discrimination policies; (2) notify employees that Interstate’s no medical restrictions and 12-week maximum leave policies are discontinued; (3) notify the EEOC within 14 days of modifying any equal opportunity policies; (4) adopt an internal reasonable accommodation policy that is distributed to employees; (5) perform annual equal employment training by an outside vendor for all non-supervisory, supervisory, and human resources employees; (6) post a notice on Interstate’s bulletin boards and intranet advising employees of its equal employment policies; (7) appoint a “qualified professional” to monitor Interstate’s ADA policies and compliance; (8) meet with the EEOC every six months to review settlement compliance and ADA policies; (9) report terminations, FMLA extensions, reasonable accommodations, disability complaints, training logs, etc. to the EEOC every six months; (10) keep records for four years related to equal employment opportunity compliance; and (11) provide to the EEOC any requested information within 30 days of receipt.

The settlement between the EEOC and Interstate coincides with the EEOC’s recent report for fiscal year 2012 in which it reported that “the EEOC secured a historic monetary recovery through [its] private sector administrative enforcement – $365.4 million – the highest level of monetary relief ever.” Of this figure, $36.2 million “came from investigations and conciliations of systemic charges of discrimination,” such as the Interstate settlement, which is “four times the amount received in the previous fiscal year.”

In light of the Interstate settlement and the EEOC’s increasing enforcement efforts, employers are advised to review their disability leave policies. Critically, employers should be aware that exhaustion of all 12 weeks of FMLA leave does not necessarily mean a disabled employee is not entitled to additional leave under the ADA.

If you have any questions regarding this issue or would like assistance in implementing disability leave policies that are compliant under the ADA, please contact one of Honigman’s Labor and Employment attorneys.

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