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Dillard’s to Pay $2 Million to Settle Class Action Disability Discrimination Lawsuit by EEOC

on Wednesday, 23 January 2013 in Labor & Employment Law Update: Kara E. Stockdale, Editor

Dillard’s Inc., a national retail chain, agreed to pay $2 million and commit to extensive, company-wide injunctive relief to settle a class action disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”). At issue was Dillard’s longstanding national policy and practice of requiring all employees to disclose personal and confidential medical information in order to be approved for sick leave. The settlement also resolves claims that Dillard’s terminated a class of employees nationwide for taking sick leave beyond the maximum amount of time allowed, in violation of the Americans with Disabilities Act (ADA).

The EEOC originally filed its lawsuit in 2008 in the United States District Court for the Southern District of California, on behalf of Corina Scott, a former cosmetics counter employee at a Dillard’s store in El Centro, California, and others who were required to disclose the exact nature of their medical conditions to be approved for sick leave since 2005.

While the class members had verifications from doctors to assure Dillard’s that the absences were due to medical reasons, many did not feel comfortable disclosing the specifics of their conditions to the company. According to the EEOC, Scott – who was absent from work for a mere four days – and others were then fired in retaliation for their refusal to provide details of their medical conditions, despite the fact that many of their own doctors advised them not to disclose specific medical information in accordance with the law.

The EEOC argued that the policy violated the ADA which prohibits employers from making inquiries into the disabilities of their employees unless such inquiries are job-related and necessary for the conduct of business. The District Court ruled that Dillard’s medical disclosure policy was facially discriminatory under the ADA.

Additionally, the EEOC claimed that Dillard’s enforced a maximum-leave policy limiting the amount of health-related leave an employee could take and, in practice, did not regularly engage in an interactive process with employees to determine if more leave was allowed under the ADA as an accommodation of the employee’s disability.


Lessons Learned

Employers should evaluate their leave policies to assure they are not requiring more medical information than necessary from employees to justify the need for leave. Likewise, employers with strict, maximum leave policies should reassess those policies, as the EEOC has consistently argued they violate the law and that at the conclusion of a leave period, an employer cannot automatically terminate the employee (even upon the expiration of FMLA leave). The employer must first engage in the interactive process to determine whether a reasonable accommodation is available which would enable the employee to return to work (which often involves some extension of the leave).

Kelli P. Lieurance

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Read the Full Newsletter: Labor & Employment Law Alert January 23, 2013

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