Requiring Medical Disclosure to Excuse Absence Still a Gray Area for Employers Despite EEOC’s Headline Grabbing Settlement with Retailer

Earlier this year we analyzed a decision of the U.S. District Court for the Southern District of California in EEOC v. Dillard’s, Inc. that found presumptively unlawful an absenteeism policy that was not unusual. (Our analysis was published in the September 2012 edition of Employee Benefit Plan Review, Vol. 67, No. 3.)

Briefly, in Dillard’s the EEOC’s claimed that the employer’s policy that to excuse an employee’s absence a doctor’s note disclose the condition that caused the absence was a compelled disclosure of employee disabilities forbidden by § 12112(d)(4)(A) of the Americans with Disability Act (ADA).

In essence, the EEOC’s position, which is consistent with its published guidance, is that if any employee could possibly feel that a policy might force disclosure of a disability, that policy is presumed unlawful – unless the employer can produce evidence that the rule is job-related and consistent with business necessity.

As we pointed out, the agency’s position is a substantial expansion of the statute’s prohibitory language; it equates asking what symptoms required the employee’s absence with a demand that the employee disclose any of his or her disabling medical conditions – whether or not the employee is disabled or whether the employer intended to obtain information about an ADA-protected disability.

Nevertheless, as we reported, in the face of a split in authority – the 9th Circuit not yet having addressed the issue – in February 2012 the district court deferred to the EEOC’s position in refusing to dismiss the lawsuit unless Dillard’s produced evidence justifying the requirement as job-related and consistent with business necessity. It now appears that Dillard’s has given up the fight.

EEOC Trumpets Wide-Ranging (and Expensive) Court-Approved Settlement

On December 18, the EEOC posted a press release headlined “Dillard’s to Pay $2 Million to Settle Class Action Disability Discrimination Lawsuit by EEOC.” Dillard’s will be paying $2 million into a fund to compensate employees and former employees somehow injured by the policy, including those purportedly fired for excessive unexcused absences after refusing to have their physicians disclose any diagnostic information (whether or not about a protected disability) in the notes they provided to Dillard’s. According to the press release, “[t]he EEOC expects to identify thousands of victims across the U.S. through the claims notice process designed to distribute the class fund arising from this settlement.”

To settle the case Dillard’s also has agreed to implement, and the court has ordered, significant non-economic, ostensibly remedial measures. According to the agency, the consent decree further requires that Dillard’s

• hire a consultant with ADA experience to review and revise company policies as appropriate;
• post documentation related to the settlement;
• implement effective training for both supervisors and staff on the ADA with an emphasis on medical inquiries and maximum leave policies;
• develop a centralized tracking system for employee complaints involving disability discrimination; and
• submit annual reports to the EEOC verifying compliance with the decree during its three-year term.

Protecting against Dillards’ fate

There remains a significant difference of judicial opinion over the EEOC’s interpretation of the ADA’s protection against compelled disclosure of a disability. A more-than-respectable case can be made that the agency’s blanket rule is vastly overreaching. However, that remains the EEOC’s position, and unless an employer welcomes a battle over the issue – one that Dillard’s and a few others have lost – it is prudent to pay attention and act accordingly. As we suggested in our article analyzing the Dillard’s opinion, employers still should consider:

1. Reviewing their attendance policies and amending those that require disclosure of the medical condition that caused an absence for any reason, whether by a treating physician or the employee.

2. Instructing all managers, supervisors, and human resources staff not to ask an employee to identify the medical condition that caused or is causing an absence.

3. Directing managers, supervisors, and human resources staff as a general rule to limit all questions concerning an employee’s health strictly to the employee’s ability to perform the functions of the position – until it is appropriate to commence an interactive process concerning reasonable accommodation.