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Interaction Between The Employee Retirement Income Security Act And The Americans With Disabilities Act

Interaction Between The Employee Retirement Income Security Act And The Americans With Disabilities Act: Figuring Out the Disability Benefits Claim and Your Disability Rights in Employment

This paper will discuss how to effectively handle long term disability claims under the Americans With Disabilities Act (ADA). Specifically, whether a claimant can sue both the employer and insurance carrier for unlawful discrimination under the ADA. This paper will not address Employee Retirement Income Security Act litigation. However, ERISA claims are closely related to ADA disability benefit claims.
This paper will bring you up to date on current methods being used and how the courts have created new wrinkles in the applications of the ADA in the disability income benefits area.
On October 3, 2000, the EEOC released an addition to the Compliance Manual regarding ADA discrimination in the application of long term disability benefits. Although not discussed herein, the new directives also examine other benefits involving the ADEA and Title VII in the area of: life and health insurance, severance benefits, service retirement benefits, and early retirement benefits. See (hereinafter referred to as œEEOC Guidance)
The new EEOC Guidance probably resulted from discussion in cases such as EEOC v. Staten Island Savings Bank, 207 F.3d 144 (2d Cir.2000). In that case, the Court stated that in determining whether long term disability plans violated the ADA by providing different disability benefits for mental and physical disabilities, it would not defer to EEOC informal guidance on application of the ADA to health insurance, where interim guidance stated that it addressed only health insurance and did not address application of the ADA to other types of fringe benefits such as disability insurance. The Court further stated that the interim guidance was in tension with an interpretive guidance published in the Code of Federal Regulations.
In 42 U.S.C. 12112(b)(2), it provides that an employer cannot discriminate against a qualified applicant or employee through a contractual arrangement with an insurer which in turn œprovides fringe benefits to an employee. Congress recognized the risk assessment and costs associated with the operation of a welfare benefit plans, which provide long term disability benefits. Thus, disability distinctions were allowed under the employee benefit plans, so long as they were based on sound actuarial data and reasonable experience.
Because the Guidance is issued to the EEOC field offices, it provides instruction to investigators on how to evaluate benefit claim disability discrimination. It also provides instruction to the attorney to enforce the guidance against an uncooperative investigator. The Guidance also now serves as persuasive logic for the courts, when rendering decisions in disability benefit cases.
The author notes one important caveat to this guidance and the role of the EEOC investigator in a case. A recent, unofficial survey, conducted by the author, in the American Trial Lawyers Association (ATLA) list serve, revealed a general five percent (5%) cause finding rate in employment discrimination cases nationwide. Although this controversy is not new to litigators, there is some discussion among ATLA members to compel an investigation of the charge administration process conducted by the EEOC.
As is common, most attorneys utilize the EEOC investigatory process for discovery purposes and to gain an early understanding of the client’s case. Every effort should be made during the EEOC investigation, to fully develop the client’s case. Also, the author has some doubt whether the EEOC field office investigators will comprehend the full impact of the new guidance and follow its mandates.
In light of the not so recent developments in the electronic discovery area, the attorney should serve a copy of the EEOC charge upon the employer along with a written request to preserve all electronic evidence and other relevant evidence. The request places the opposing party on notice, and can later become invaluable during discovery disputes when a loss of evidence is claimed.
The new EEOC Guidance states in relevant part the following information. The author has included the guidance information because it was recently issued by the EEOC in September/October of 2000. Much of the guidance reiterates the holdings in cases on the same subject. Whereever possible, the author will provide relevant citation on the particular issue. However, the discussion on this topic is not meant to be comprehensive. Further research in the relevant jurisdiction will provide up to date interpretations and holdings.
œIf a charge alleges that the terms of an employee benefit plan discriminate on the basis of disability, the first question is whether the employer has provided benefits to a qualified employee with a disability that are equal to the benefits provided to employees generally under the plan. Benefits will be equal only if all employees participating in the plan, regardless of disability, receive the same types of benefits, the same payment options, and the same amounts of coverage for the same cost. EEOC Guidance at 43.
œIf the employer has provided equal benefits, there is no ADA violation. If, on the other hand, the employer has provided benefits to a qualified employee with a disability that are unequal to the benefits provided to other employees, the next question is whether the difference is based on the employee’s disability. If the difference is not a result of a disability-based distinction, and if the challenged provision is applied equally to all employees participating in the plan, then there is no violation of the law. EEOC Guidance at 43.
œIf the unequal benefits provided to a qualified employee with a disability are based on disability, the benefit plan will be unlawful unless the employer can show that the disability-based distinction is not a ˜subterfuge’ to evade the purposes of the ADA. There are several ways an employer can make this showing, See Section IV, infra. EEOC Guidance at 43.
The protections of ADA Titles I-III are limited by a so-called œsafe harbor provision set forth in Title IV at 42 U.S.C. Section 12201(c). This section provides at paragraph (1) that: œ[s]ubchapters I through III of the chapter and Title IV of this Act shall not be construed to prohibit or restrict . . . an insurer. . .from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law. However, Section 12201(c) also provides that œ[p]aragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposes of subchapter I and III of this chapter. Id. See Lewis v. Aetna Life Insurance Co., 982 F.Supp.1158, 1166 (E.D.Va.1997)
œThus, if the charge challenges discrimination in the terms or provisions of a benefit plan, the relevant questions are the following:
“ Has the employer provided equal benefits to employees with disabilities and to other employees covered by the plan? If not,
“ Is the difference in benefits the result of a disability-
based distinction in the plan? If so,
“ Can the employer show that the benefit plan is bona fide and that the disability-based distinction is not a subterfuge to evade the purposes of the ADA? EEOC Guidance at 43.
In order for benefits to be equal and thus no violation of the ADA, all the following contractual terms must be equal: premiums, deductibles, caps on coverage and waiting periods.
In addressing litigation strategy, the first question that arises, is whether the attorney can obtain this information early in the case? Of course the employer and insurance company will tell you that all benefits are equal. One can only discover the inequality by obtaining information about how other types of disabilities are treated under the same employer policy prior to filing the charge or during discovery. There may be other creative measures to pursue in obtaining this information.
The area of disability based distinctions has received the most attention in the reported cases. See Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99 (2d Cir. 1999)(in applying Title III, health insurers distinction between mental and physical disabilities did not violate the act). See also, EEOC v. Aramark Corp., Inc., 208 F.3d 266 (D.C. Cir.2000) (plan differentiating between different disabilities falls under safe harbor provisions of the ADA).
However, an alternative explanation was reached in Lewis, 982 F.Supp.1158, œthe ADA prohibits discrimination on the basis of an individual’s particular disability. Thus, whether a disabled person is treated differently than a non-disabled person or another disabled person, the same wrong has occurred. That is, the person has been discriminated against because of his particular disability. The Supreme Court recently affirmed this exact principle within the context of age discrimination, a type of claim that often accompanies claims of disability under the ADA. See, O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 116 S.Ct. 1307, 134 L.Ed.2d 433 (1996). As the Court explained: ˜The fact that one person in the protected class lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of his age.’ Id. at 1168; compare, Doe v. Mutal of Omaha Ins. Co. 999 F.Supp.1188(N.D.Ill.1998).
œNot all provisions of an employer’s benefit plan that are related to health, and that result in unequal benefits for individuals with disabilities, are based on disability. A health-related distinction that is not disability-based, and that is applied equally to all employees, does not violate the ADA. Therefore, the next question is whether any difference in benefits arises from a disability-based distinction. A health-related distinction is a benefit plan is disability based if it singles out:
“ a particular disability;
“ a discrete group of disabilities; or
“ disability in general.
Generally, a health-related distinction in a benefit plan is not disability-based if:
“ it is a broad distinction which applies to a multitude of dissimilar conditions, and
“ it constrains both individuals with and individuals without disabilities. EEOC Guidance at 44-45.
In Boots v. Northwestern Mut. Life Ins. Co., 77 F.Supp 2d 211 (D.N.H.1999), the district court held that former employee stated claim against disability insurance company which provided long term disability benefits to her through her employer sponsored plan. The plaintiff alleged that the company violated the ADA provisions prohibiting disability discrimination in employment by granting benefits for physical disability as long as such disability existed, but limited mental disabilities to two years of coverage.
In footnote 77 of the EEOC Guidance the Commission writes:
œ[t]he Commission has taken the position in litigation … that distinctions between mental and physical conditions in long-term disability (LTD) plans are disability-based. Generally, an employee becomes eligible for LTD benefits when s/he is no longer able to work because of a serious permanent or long-term illness or injury. This means that in most instances employees who are eligible for or are receiving LTD benefits have disabilities as defined by the ADA, because their impairments substantially limit their ability to work or to engage in one or more other major life activities. Courts have disagreed with the Commission’s position and have held that treating physical or mental conditions differently in an LTD plan does not violate the ADA. See, e.g., EEOC v. Staten Island Savings Bank, 207 F.3d 144 (2d Cir.2000) (equal coverage of all disabilities not required by ADA); Lewis v. Kmart Corp., 180 F.3d 166, 170 (4th Cir.1999)(ADA does not require a long-term disability plan sponsored by a private employer to provide the same level of benefits for mental and physical disabilities), cert. denied, 68 U.S.L.W. 3311 (U.S. Jan.24, 2000); Ford v. Schering-Plough Corp., 145 F.3d 601, 611 (3d Cir.1998)(en banc) (employer and insurance company need not justify actuarial basis for difference in benefits in long-term disability plan for mental and physical conditions), cert. denied, 119 S.Ct. 850 (1999); but see Olmstead v. L.C., 527 U.S. 581 (1999)(ADA prohibits discrimination between different types of disabilities).
In reality, in order to determine whether an illegal health-related issue played a part in the denial of long-term disability benefits, the attorney must find evidence leading to this conclusion. However, this information is not readily available at the start of the case. Most often, the attorney only has one example of a discriminatory denial, the one received by his or her client. This places the attorney in a precarious position. A charge can easily be filed alleging disparate treatment, but to pursue a federal action upon receipt of the notice of right to sue, an attorney will need hard facts. Facts which can only be adduced during discovery.
Thus, the attorney must develop a complaint which in essence makes a conclusory, yet factually supported, allegation that the denial of disability benefits was based on an unlawful health-related disability distinction. Pursuant to Fed.R.Civ.P. Rule 11, the attorney must perform an investigation of the allegations and support the claims with factual evidence. Here is the conundrum, the employer and insurer will possess the information and certainly not provide the critical information necessary to form a valid disparate treatment case. As is common in most of these cases, the employer avers in its motion to dismiss that plaintiff fails to state a claim for which relief can be granted. The attorney should utilize a motion to the court requesting permission to conduct limited discovery of the employer’s and insurer’s records. Hopefully, additional supporting evidence of similarly situated individuals will be revealed and further support the factual assertion(s) in the complaint.
Congress envisioned this problem and developed legal premises to assist the plaintiff/beneficiary to make arguments and gather discoverable evidence after the complaint has been filed. œIf an employer has made a disability-based distinction in a benefit plan, it will be liable for a violation of the ADA unless it can show that the distinction is justified. The ADA sets forth two elements to the defense. An employer must demonstrate that:
“ the benefit plan is bona fide; and
“ the plan is not a subterfuge to evade the purposes of the ADA (42 U.S.C. Section 12201(1994); 29 C.F.R. 1630.16(f)(1998)) EEOC Guidance at 45-46.
œUnder the first prong of the defense, an employer must demonstrate that its plan is either a bona fide insured plan that is not inconsistent with state law, or a bona fide self-self insured plan. To be bona fide, a plan must exist and pay benefits; in addition, the terms of the plan must have been accurately communicated to eligible employees. To determine whether a plan meets this standard, investigators typically need simply obtain a copy of the employer?s plan documents and confirm that benefits have in fact been paid. EEOC Guidance at 46.
œThe term ˜subterfuge’ refers to disability-based disparate treatment in an employee benefit plan that is not justified by the risks or costs associated with the disability that is, disability-based distinctions that are not ˜based on sound actuarial principles or related to actual or reasonably anticipated experience.’ Whether a provision of a benefit plan is a subterfuge must be determined on a case by case basis. EEOC Guidance at 46.
œThere are several ways that an employer can prove that disability-based distinction in a benefit plan is not a subterfuge. Among the possible justifications are the following:
“ the employer may prove that is has not engaged in the disability-based disparate treatment alleged;
“ the employer may prove that the disability-based disparate treatment is justified by legitimate actuarial data, or by actual or reasonably anticipated experience, and that conditions with comparable actuarial data and/or experience are treated the same way.
Actuarial data will measure both the likelihood that the employer will incur insurance costs related to the disability and the magnitude of those costs as they arise. Thus, employers must show that the reduction in coverage for the disability or disabilities is required to account for an increased possibility that the benefit will be claimed or that the amounts required for coverage will be higher. Employers may not, however, rely on actuarial data that is outdated or that is based on myths, fears, stereotypes, or assumptions about the disability at issue. EEOC Guidance at 46.
In the authors experience, there is one particular disability which falls into the last category mentioned in the guidance. In Chronic Fatigue Immune Dysfunction Syndrome (CFIDS) cases, insurance companies press the hardest to deny coverage. The industry lacks quantifiable actuarial data on CFIDS. There is a wide spread industry understanding, i.e. propaganda, that CFIDS does not exist. That the impairments reported by patients is the result of some form of feigning or depressive disorder. Thus, the insurance industry manages these claims based on œmyths, fears, stereotypes and assumptions about CFIDS.
This controversy was finally put to rest when the National Centers for Disease Control and the Social Security Administration recognized CFIDS as a true disease. The author was handling two CFIDS cases during the later part of 1999, when this news came to light. Eventually, each case against a large employer and its insurance company resulted in the claims being paid.
œIf there is evidence that an employer has treated other conditions differently from the disability at issue, the employer has discriminated by singling out a particular disability for disadvantageous treatment. Investigators should find cause.
“ The employer may prove that the disability-based disparate treatment is necessary to maintain the solvency of the plan. To establish this defense, employers must show:
“ that covering the disability or disabilities at issue would require such substantial payments of benefits that it would threaten the fiscal soundness of the plan under commonly accepted or legally required standards, and
“ that there is no non-disability-based benefit plan change that could be made to limit those fiscal consequences.
“ The employer may prove that the challenged practice or activity is necessary to avoid unacceptable changes in the coverage of, or the premiums for, a benefit plan. An ˜unacceptable’ change is a drastic increase in premium payments (or in co-payments or deductibles), or a drastic alteration to the scope or level of benefits provided, that would:
“ increase the cost to other employees so substantially that the benefit plan would be effectively unavailable to a significant number of them;
“ make the benefit plan so unattractive as to result in significant adverse selection;
“ make the benefit plan so unattractive that the employer cannot compete in recruiting and maintaining qualified workers due to the superiority of benefit plans offered by other employers in the community.
EEOC Guidance at 46-47.
In Ford v. Schering-Plough Corp., 145 F.3d 601 (3rd Cir.1998), the Court held that disparity in employer’s insurance benefits for mental and physical disabilities did not violate the ADA. While the plan did differentiate between types of disabilities, every employee had the opportunity to join the same plan with the same schedule of coverage, such that each employee received equal treatment. The Court noted that the ADA does not require employer to provide equal insurance coverage for every type of disability; such a requirement would destabilize the insurance industry in a manner definitely not intended by Congress when passing the ADA. Finally, safe harbor provisions of the ADA covering the insurance industry does not require insurance company to justify its policy coverage or show actuarial data demonstrating that their plan is not a subterfuge after plaintiff makes a prima facie allegation of discrimination in disability benefits. See also, Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th Cir.2000).
There are two kinds of disability clients, those that have current disability discrimination claims and those who have disability discrimination claims and are applying for or receiving some form of disability benefit from their employer.
An employee who is currently receiving some form of disability benefits from their employer will almost invariably experience complications regarding the disability benefit. The attorney must recognize where along the post active employment continuum the client falls under. Is the employee on Family Medical Leave Act leave and receiving short-term disability benefits, but will go back to work in the future? Or is the employee making an application for long-term disability benefits and unsure whether he or she will return to work?
In both instances, the attorney must not accept the common presumption that once an employee is receiving or applying for disability benefits, that employee will never return to full time active employment. The presumption exists because employers generally and unlawfully predetermine that the disabled employee is no longer healthy and not a valuable asset to the company. It is important to note, that almost all LTD policies contain provisions for continual re-certification and rehabilitation programs.
The attorney must be creative in fashioning a request for accommodation. Remember, the list of accommodations envisioned in the ADA is not exclusive and are only examples. The author has found that anything can be a reasonable accommodation. Do not be misled by the fact the employee is not seeking an accommodation to perform the essential functions of his or her job. Although the employee is receiving or anticipates receiving company welfare benefits under ERISA, this does not preclude the employee from requesting accommodations that impact the terms, conditions and privileges of his or her employment.
More important, what ever the request for accommodations, the employee has engaged in a œprotected activity, under the ADA. The attorney should always request an accommodation while the employee is applying for disability benefits or is currently receiving disability benefits. In the worst case scenario, where the disability benefits are unlawfully denied or terminated, the employee has immediate recourse in filing a charge of discrimination with the Equal Employment Opportunity Commission. Although the courts are somewhat unfamiliar with this sort of claim, the plain language of the ADA presumptively allows such a claim to be redressed.
The theory utilized by the employee is that the denial or termination of disability benefits was in retaliation for requesting reasonable accommodations. The attorney must prove that the protected activity was closely related to the adverse employment action, regardless of whether the accommodation would have been effective. There is no legal difference between this type of retaliation claim and one asserted by an active employee.
The United States Supreme Court in the case of Cleveland v. Policy Management Systems, 526 U.S. 795 (May 24, 1999), provided powerful ammunition for such a retaliation claim. The Court held that an employee does have standing to sue under the ADA and receive LTD/SSDI benefits, so long as the employee had requested reasonable accommodations, which if provided, would have allowed him or her to perform the essential functions of the position.
This past spring the Second Circuit, in Parker v. Columbia Pictures, 204 F.3d 326, followed the Cleveland decision in holding in favor of the plaintiff employee. The Parker Court also adopted the mixed motive analysis in ADA cases followed by a majority of the Circuit Courts of Appeals.
The burden on the plaintiff was further lightened by the Supreme Court’s decision in Sanders v. Plumbing Supply (citation omitted). Although the case involved an age discrimination claim pursuant to the Age Discrimination in Employment Act, the Court’s œpretext only analysis can easily be adopted in ADA cases.
In 1997, the U.S. Equal Employment Opportunity Commission issued guidance on whether statements made in an application for disability benefits acts as a complete bar to maintain standing under an ADA claim. The Guidance was issued to resolve conflicts among the courts on this issue. The EEOC examined the procedural differences between the ADA, state workers’ compensation laws [not examined herein], SSDI and contractual disability insurance plans. Where ever possible, the author will provide relevant citation on the particular issue. However, the discussion on this topic is not meant to be comprehensive. Further research in the relevant jurisdiction will provide up to date interpretations and holdings.
The guidance states, œbecause of the fundamental differences in the definitions used in the ADA and the terms used in disability benefits programs, an individual can meet the eligibility requirements for receipt of disability benefits and still be a ˜qualified individual with a disability’ for ADA purposes. Thus, a person’s representations that s/he is ˜totally disabled’ or ˜unable to work’ for purposes of disability benefits are never an absolute bar to an ADA claim. [Enforcement Guidance found at EEOC.Gov]
The EEOC points out there are important elements that distinguish the definition of the term œqualified individual with a disability under the ADA from definitions of œdisability or œtotally disabled under SSDI and ERISA LTD policies. œBecause of these inherent differences, an individual may be able to meet the eligibility requirements for receipt of disability benefits and still be a ˜qualified individual with a disability’ for ADA purposes. That is an individual may be ˜unable to work’ for purposes of a disability benefits program and yet still able to perform the essential functions of a particular position with or without reasonable accommodations. Id.
The first main distinction is that under SSDI and LTD claims only a generalized assessment is performed, as to whether the individual is disabled and unable to work in any occupation. In some situations, each scheme will presume a person is totally disabled in light of the particular disability. Under the ADA, a generalized assessment is prohibited by the statutory language. Whether an individual is a œqualified individual with a disability is determined after an œindividualized assessment. The focus here is whether the individual can perform the essential functions of a particular position, with or without accommodations. The ADA never presumes an individual is unable to work or that some impairments are presumptively severe. Id.
The second distinction is that other statutory and contractual schemes never take into account whether an individual can perform employment with or without reasonable accommodations. Id. The six-part test used in assessing a SSDI claim does not take into account this important factor. Also, most LTD applications, and plans, for the time being, do not present questions whether the applicant requires some form of reasonable accommodation. A recent review of some LTD policies reveals that insurance companies are now inquiring from the applicant’s physicians about possible accommodations to the position in question. Presumably, the insurance companies will try to use the physician’s statements against the LTD applicant in order to resolve this apparent distinction.
On the issue of judicial estopple, the EEOC takes the position that the common law defense should not apply in light of the aforementioned distinctions. When an individual makes sworn contradictory statements on his SSDI, LTD and ADA claims, the EEOC believes an absolute bar is inappropriate. Thus, in defending against a motion to dismiss, an individual should proffer the inconsistent positions between the regulatory and contractual schemes. Further, an explanation should be provided as to how the individual is a œqualified individual with a disability capable of œperforming the essential functions of the position with or without reasonable accommodations.
This was the exact analysis the United Supreme Court utilized in the case of Cleveland v. Policy Management Systems Corp., 526 U.S. 795 (May 24, 1999), discussed infra.
On May 24, 1999, the U.S. Supreme Court issued a decision in the seminal case of Cleveland v. Policy Management Systems, Corp., 526 U.S. 795, 119 S.Ct. 1597. The Court held that the disabled employees claims for Social Security Disability Insurance (SSDI) benefits and ADA damages did not inherently conflict. The employee was entitled to an opportunity to explain the factual discrepancy between her statements contained in the SSDI application and her ADA claim that she was qualified to perform the essential functions of her position.
The Cleveland Court supported its holding by stating:
œ[i]n our view, however, despite the appearance of conflict that arises from the language of the two statutes [SSDI and ADA], the two claims do not inherently conflict to the point where courts should apply a special negative presumption like the one applied by the Court of Appeals here. That is because there are too many situations in which an SSDI claim and ADA claim can comfortably exist side by side. For one thing, as we have noted, the ADA defines a ˜qualified individual’ to include a disabled person ˜who . . . can perform the essential functions’ of her job ˜with reasonable accommodation.’ . . . By way of contrast, when the SSA determines whether an individual is disabled for SSDI purposes, it does not take the possibility of ˜reasonable accommodation’ into account, nor need an applicant refer to the possibility of reasonable accommodation when she applies for SSDI. (internal citations omitted) . . .Hence, an individual might qualify for SSDI under the SSA’s administrative rules and yet, due to special individual circumstances [need for reasonable accommodations], remain capable of ˜performing the essential functions’ of her job. . . An ADA plaintiff bears the burden of proving that she is a ˜qualified individual with a disability’ that is, a person ˜who, with or without reasonable accommodation, can perform the essential functions’ of her job. (internal citation omitted). An a plaintiff’s sworn assertion in an application for disability benefits that she is, for example, ˜unable to work’ will appear to negate an essential element of her ADA case at least if she does not offer a sufficient explanation. For that reason, we hold that an ADA plaintiff cannot simply ignore the apparent contradiction that arises out of the earlier SSDI total disability claim. Rather, she must proffer a sufficient explanation. . .To defeat summary judgment, that explanation must be sufficient to warrant a reasonable juror’s concluding that, assuming the truth of, or the plaintiff’s good faith belief in, the earlier statement, the plaintiff could nonetheless ˜perform the essential functions’ of her job, with or without ˜reasonable accommodation.’
In reviewing the following recent decisions, there is really only one important practice pointer to realize. After Cleveland, the attorney must obtain full control over the client’s decisions to apply for SSDI and to maintain an ADA claim against the employer. The cases point out that it was the employee’s own statements which were controlling. The attorney must guide the client through the SSDI application process, to ensure that sworn statements of œtotal disability can coexist with the facts of the ADA case.
If the attorney receives the case prior to the employee’s exit from employment, he or she can implement appropriate reasonable accommodations which would have allowed the employee to perform the essential functions of the position. This appears to be the strongest argument to overcome inconsistent statements between the ADA claim and the LTD and SSDI applications. If the attorney receives the case after the client has applied for LTD and SSDI, an immediate examination of the application documents must take place before any further action is taken. If you cannot find a legitimate method to avoid the inconsistent statements, then the case should not be taken on.
1. Second Circuit Decisions
In Parker v. Columbia Pictures Industries, 204 F.3d 326 (2d. Cir. Feb.28, 2000), the employee injured his back and required surgery. After exhausting his short-term disability, the employer terminated his employment. Parker brought an ADA claim alleging wrongful termination and the employer moved for summary judgment on the basis that he was not a qualified employee under the ADA and judicially estopped. In reversing the district court’s grant of summary judgment, the Court held that Parker raised genuine factual questions as to both his ability to perform the essential functions of his job and the employer’s motive for discharging him.
The Court cited Cleveland, in holding, œ[a]lthough this case presents a close question, we conclude that Parker’s statements in his applications for long-term disability and SSDI benefits do not fall with the category of ˜directly conflicting statements about purely factual matters’ that we faced in Mitchell. [Mitchell v. Washingtonville Cent. Sch. Dist., 190 F3d 1 (2d Cir.1999)] . . . Parker’s explanation for the contradiction is sufficient to survive summary judgment. In his Rule 56.1 statement opposing summary judgment, Parker asserted that he completed the application for long-term benefits ˜with the understanding that … his medical need for continued physical therapy entitled him to long-term disability benefits once he was being denied the opportunity to work, notwithstanding that he felt able to endure the pain and discomfort involved in getting to his form place of employment and was desirous of doing so’ Given this explanation, a reasonable jury could find the Parker’s description of himself as ˜completely incapacitated disabled’ referred to [employer’s] explanation for terminating him and not to whether he was capable of performing the essential functions of the job with reasonable accommodations. In light of Parker’s proffered explanation for the apparent conflict between his benefits forms and his affidavit in this ADA action, therefore, we find that under Cleveland, his benefits forms do not preclude him form establishing a triable questions regarding the ˜essential functions’ element of his prima facie case.
2. Third Circuit Decisions
In Motley v. New Jersey State Police, 196 F.2d 160 (3d
Cir.1999), the Court held that former state trooper was not a qualified individual under the ADA, where he had stated in his application for a disability pension that he was œpermanently and totally disabled and further failed to provide a sufficient explanation for his inconsistent statements.
3. Fourth Circuit Decisions
In EEOC v. Stowe-Pharr Mills, Inc., 216 F.3d 373 (4th Cir. 2000), the Court reversed the lower court’s grant of summary judgment in favor of the employer. The Court held that fact issues existed as to whether employee’s statement of total disability in SSDI application was consistent with her ADA claim and whether the employee could perform the essential functions of her position with reasonable accommodations. When faced with an ADA plaintiff’s previous sworn statement asserting œtotal disability ir the like, a court should require an explanation of any apparent inconsistency with the necessary elements of an ADA claim; to defeat summary judgment, that explanation must be sufficient to warrant a reasonable juror’s concluding that, assuming the truth of, or plaintiff’s good faith belief in, the earlier statement, the plaintiff could nonetheless perform the essential functions of the job, with or without reasonable accommodation.
4. Fifth Circuit Decisions
In Reed v. Petroleum Helicopters, Inc., 218 F.3d 477 (5th Cir.(La), 2000), the Court held, that even if pilot’s inconsistent statements in connection with her application for social security disability benefits compelled a conclusion that she was unqualified for her job after her termination due to an inability to fly, she failed to prove her claim under the ADA primarily because she provided no evidence that she could perform an essential function of her job, namely flying, with a reasonable accommodation, whenever she was on leave or when she was terminated.
5. Sixth Circuit Decisions
In Gibson v. Wal-Mart Stores, Inc., 182 F.3d 917, 19999 WL 502459 (6th Cir.1999)(unpublished disposition), the Court vacated district court’s award of summary judgment on plaintiff’s ADA claim and remanded the case for further consideration. In following Cleveland, the Court held, œthe plaintiff presented evidence that he is able to perform the functions of a loss prevention associate. He testified to that effect and also submitted a note from his doctor indicating that he was able to return to work full-time and engage in all of ˜normal duties.’ He did not, however, offer an explanation for the contradictory statement made in his disability application. Although the claim of total disability on his application for disability benefits undermines his position that he was able to perform the functions of his job, the evidence in the record suggest to us, at least, that Gibson may be able to present sufficient proof to establish a genuine issue of material fact on this issue. Gibson applied for SSDI benefits, claiming disabilities of carpal tunnel syndrome and impairments resulting from a stroke. He was later denied the SSDI benefits. In other cases, we have seen that an individual’s receipt of SSDI benefits will provide further support for total disability, although not necessary dispositive in light of the inherent distinctions between the statutory and contractual disability schemes.
In Totty v. International Business Machines, 198 F.3d 247, 1999 WL1111500 (6th Cir.1999)(unpublished disposition), a highly litigious yet wholly unsuccessful plaintiff lost his ADA claim based on the fact he failed to properly file an EEOC charge. The district court awarded summary judgment to the employer on the ADA claim. The Sixth Circuit affirmed the grant of summary judgment on the employee’s failure to properly file a charge. The Court rejected the district court’s holding that he ADA claim was barred based on his statements in his SSDI application for benefits, which he received, pursuant to Cleveland.
In Oliva v. Pride Container Corp., 81 F.Supp. 2d 907 (N.D.Ill.2000), the district court held that Social Security determination that one is not disabled is not dispositive and does not estop plaintiff from claiming disability under the ADA.
6. Seventh Circuit Decisions
In Feldman v. American Memorial Life Insurance Co., 196 F.3d 783 (7th Cir.1999), the Court affirmed the district court’s decision to award summary judgment for the employer, because Feldman was not a qualified individual under the ADA. Further, she failed to explain the inconsistent statements between her SSDI declaration of œtotal disability and her ADA claim.
œCleveland, however, explained that the mere act of applying for SSDI should not estop a plaintiff from making a subsequent ADA claim. (citation omitted). We have already ruled that claims under the ADA and SSDI are not so inconsistent that judicial estoppel is always appropriate. Weigel v. Target Stores, 122 F.3d. 461, 467-468 (7th Cir.1997). Sufficient divergence exists between the definitions of ˜disability’ under the ADA and SSDI that, in some circumstances, an individual can claim truthfully both that she is unable ˜to engage in any substantial gainful activity’ under SSDI but also a ˜qualified individual with a disability’ under the ADA. Id. at 790.
The Feldman Court offered this interesting and unusual explanation regarding how a disability may change over time, thus providing a legitimate explanation for the inconsistent statements made. œThird, the severity of a disability may change over time such than an individual was totally disabled when she applied for SSDI, then later was a qualified individual at the time of the employment decision disputed in an ADA suit. Even though the underlying disability is the same, the SSDI application and the ADA suit might reference quite different points in time between which an improvement or deterioration in the plaintiff’s disability may have transpired. Although an ADA suit must be brought promptly after the relevant employment decision, it is possible that the passage of time and a concomitant change in the disability could explain an inconsistency between SSDI and ADA status. Id at 790-91.
In Malec v. Sanford, 1999 WL 183770 (N.D.Ill.), the district court followed Seventh Circuit decisions prior to the Cleveland decision. œThe Seventh Circuit instructs that a social security finding of a complete disability is not conclusive for purposes of the ADA. Flowers v. Komatsu Mining Sys., Inc., 165 F.3d 554, 557 (7th Cir.1999); Haschmann v. Time Warner Entertainment Co., 151 F.3d 591, 603 (7th Cir.1998). That Court’s reasoning that the Social Security Act and the ADA ’employ quite different standards, procedures and objectives,’ Haschmann, 151 F.3d at 603, applies with equal force here. At this point in the proceedings, we do not know the standards, procedures, and objectives employed by the Oak Brook Pension Board. We assume the underlying purpose of the pension regulations is not, like the ADA, to eliminate invidious employment discrimination and instead is, like the SSA, to provide employment insurance. For this reason, dismissal of Malec’s ADA claim would be inappropriate.
7. Eight Circuit Decisions
In Moore v. Payless Shoe Source, Inc., 187 F.3d 845 (8th
Cir.1999), the Court on remand, after Cleveland was decided, held that plaintiff’s affidavit, stating that she was working as a sales clerk in a hobby store with accommodations for heavy lifting, did not support finding that she was able to perform the essential functions of her prior job as shoe store manager with reasonable accommodation, thus defeating her ADA claim in the face of her prior sworn representations of total disability in social security proceedings.
In Lloyd v. Hardin County, Iowa, 207 F.3d 1080 (8th Cir.2000), the Court held that plaintiff could not perform one or more of the essential functions of his position as a county road maintenance employee, even with accommodations. In addition, the employer was not require to restructure his job by allocating one or more essential functions to other employees. Finally, the plaintiff could not overcome the presumption of total disability made to social security, because he could offer no legitimate explanation for the inconsistent statements.
8. Ninth Circuit Decisions
In Norris v. Sysco Corp., 191 F.3d 1043 (9th Cir.1999), the
Court was faced with a Rule 50 motion claiming inconsistencies in the jury’s verdict. The Court held that the jury did not take inconsistent positions with regard to plaintiff’s ADA claim. The Court also ruled that whether plaintiff was judicially estopped from asserting her ADA claims due to statements she had made in applying for disability insurance and state disability benefits was for the jury.
The Court provided some interesting commentary regarding the facts of this case and this area of law. œEven after a full blown trial on the merits, the record in this case does not demonstrate that the definition of disability under the ADA and the definitions under the insured disability plan (and state disability plan) were so congruent that Norris is guilty of a degree of mendacity which requires that a judgment as a matter of law should have been entered against her. Nor is the record devoid of explanations for any inconsistencies. Beyond that, proof that a party, like Norris, has made prior inconsistent statements is not a rare event in our courts. Juries are regularly called upon to consider evidence of that sort, and we all know that prior inconsistency does not inexorably lead to defeat. Moreover, it is well known that ˜the nature of an individual’s disability may change over time.’ Cleveland 526 U.S. at ”-, 119 S.Ct. at 1603. The healing process is often both manifest and marvelous. Id at 1049.
9. Tenth Circuit Decisions
In Smith v. Midland Brake, Inc., 98 F.Supp.2d, 1233
(D.Kan.2000), the district court held that when employee’s representations to the Social Security Administration regarding his or her inability to work genuinely conflict with the employee’s ADA claim, the employee cannot ignore the apparent contradiction. Rather, the employee must proffer an explanation which, to defeat summary judgment, must be sufficient to warrant a reasonable juror’s conclusion that, assuming the truth of, or the employee’s good faith belief in, the earlier statement, employee could nonetheless perform the essential functions of his or her job, with or without reasonable accommodations.
In Reichmann v. Cutler-Hammer, Inc., 95 F.Supp.2d 1171 (D.Kan.2000), the district court held that sale’s associate’s assertions on application for long term disability benefits that she was unable to perform her job duties following a stroke, that job could not be modified to enable her to return to work, and that there were no other jobs she could perform were inconsistent with her ADA claim that she was otherwise qualified for the job, precluded her claims of disability discrimination, absent evidence that her capacity to work changed between time she filed suit.
While working in the area of employment discrimination under Title I of the ADA, especially disability benefits, the attorney should be mindful of claims made under Title III. When faced with a denial of coverage under a long-term disability policy, a claim can now be made against the insurance company itself.
There are a few reported cases that support the theory that insurance companies are œplaces of public accommodation. Not only are the courts enforcing the brick and mortar public accommodation argument against insurance companies, but now the courts are holding that the very policy which insurance companies sell is subject to the ADA.
However, the courts have been slow to breach the gap between standard public accommodation insurance type cases and insurance received through employment. The former type of case provides for direct nexus between the individual and the place of public accommodation. See In Pallozzi v. Allstate Life Ins. Co., 198 F.3d28 (2d Cir.1999), (the Court held that life insurance applicants’ claim that insurer discriminated against them on the basis of their mental disabilities in violation of Title III of the ADA by refusing to issue them a joint life insurance policy and that insurers conduct violated state law).
In the employment setting, the employee is one step removed from the process, because the policy was purchased by the employer. In the author’s opinion, it will only take a short time before more courts begin to hold that insurance policies sold to employers, for the benefit of its employees, implicate the insurer as a public accommodation.
The rationale for this case development was provided in the First Circuit decision, Carparts v. Distribution Ctr., Inc. v. Automotive Wholesaler’s Ass’n, 37 F.3d 12 (1st Cir.1994). In Carparts, the Court held that œto . . .limit the application of Title III to physical structures . . .would severely frustrate Congress’s intent that individuals with disabilities fully enjoy the goods, services, privileges and advantages, available indiscriminately to other members of the general public. Id. at 20.
In fact some courts have already held that Title III applies to insurance policies offered to the employee through the employer. In Lewis v. Aetna Life Ins. Co., 982 F.Supp.1158, 1165 (E.D.Va.1997), the district court held that, œ. . .an insurer may not discriminate in the provision of insurance regardless of whether the policy is sold directly to a disabled individual or made available to the individual indirectly via an employer pursuant to a contractual or other relationship.
This employer-based distinction offered by many employers is unavailing in light of the language of Title III. Specially, Section 12182(b)(1)(A)(I) provides that:
œ[i]t shall be discriminatory to subject an individual or class of individuals on the basis of a disability or disabilities of such individual or class, directly, or through contractual licensing, or other arrangements, to a denial of the opportunity of the individual or class to participate in or benefit from the goods, services, facilities, privileges, advantages, or accommodations of an entity.
The line of cases leading in the opposite direction are Parker v. Metropolitan Life Ins. Co., 121 F.3d 1006 (6th Cir.1997)(in banc), cert. denied, 522 U.S. 1084, 118 S.Ct. 871, 139 L.Ed.2d 768 (1998), and Ford v. Schering-Plough Corp., 145 F.3d 601 (3d Cir.1998), cert. denied, 525 U.S. 1093, 119 S.Ct. 850, 142 L.Ed.2d 704 (1999).
In Parker, the Sixth Circuit held that Title III does not regulate the terms and conditions of a long-term disability policy offered by the employer to the employee through an insurance company. The Court reasoned that because the employee œdid not access her policy from an insurance office, but instead œobtained her benefits through her employer, she had œno nexus to a public accommodation. Id. at 1111. Similarly, in Ford, the Third Circuit reached the same result regarding an identical plan. Neither case directly held that Title III ensures only physical access to a places of public accommodation.
In Ford, 145 F.3d 601, the Third Circuit held disability benefits offered as part of employee’s insurance plan for employees does not qualify as a public accommodation, and, thus, disparity in benefits for mental and physical disabilities does not violate portions of the ADA.
We can expect to see in the near future, more challenges against the Parker and Ford line of cases in the employment context. In light of the broad scope of the ADA provisions, eventually employers long term disability policies will fall into the scope of a public accommodation. If the nexus requirement is all that is needed, future creative arguments and the changes in technology will foster insurance company liability in the employment setting. For the courts to continue to hold otherwise, they will directly insulate from Title III liability every employer purchased insurance policy.

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