The Ticking Time Bomb of Auto-Termination Programs

Monday, January 31, 2011 | 0

By Eugene Keefe and John Campbell
Keefe Campbell & Associates
 
We define "Auto-Termination Program" to mean you terminate your employees without further question, appeal or inquiry after a defined period of absence, usually six months or twelve months.

The main idea is to have a completely non-discriminatory path for ending  employment for someone who isn't around for whatever reason. In our view, this HR model worked for a time, as you couldn't be accused of firing such a worker due to their race, religion, gender, national origin, sexual orientation, age, height, weight or smelly socks.
 
We know hundreds of our readers who are in human resources, benefits and risk  management are proud to tell folks about their auto-termination programs and how strict they are to blindly enforce it. The fervor about such discussions can approach religious zealotry-they will not consider any discouraging words about them. Well, we assure you such concepts should be quickly going into the nearest HR junk pile-you have got to  reconsider what you are doing or face the wrath of the federal government that appears to love to torture U.S. business. Please remember, their resources are effectively infinite and they recently got millions of dollars from Washington to cause the multi-million dollar problems this concept is now causing folks just like you.
 
Consider these facts:
 
Last September, a federal jury awarded a 47-year-old Delray Beach, Florida woman $8.1 million in a lawsuit in which she claimed her employer, Michaels Stores, Inc. violated federal employment law for repeatedly criticizing her work performance, then firing her while she was suffering from cancer and undergoing chemotherapy.

Claimant was not a line employee; she was a store manager! Jurors determined plaintiff was unjustly fired from her manager's position at a Boca Raton store after she claimed she was forced to work while undergoing chemotherapy, was harassed and was wrongfully accused of stealing from the arts and crafts store. After a five-day trial, jurors deliberated for about five hours over two days before awarding plaintiff $4 million for pain and suffering, $4 million for punitive damages and $100,000 for lost wages. The judge reserved the right to increase the award for lost wages up to $1 million, said plaintiff's attorney.

That is one multi-million dollar verdict from one disabled claimant, alleging the employer wouldn't accommodate her disabilities.

In EEOC v. Sears, Roebuck & Co., the U.S. Equal Employment Opportunity Commission obtained a record-setting consent decree resolving a class lawsuit against Sears under the ADA for $6.2 million and significant remedial relief. The suit alleged Sears maintained an inflexible workers' compensation leave exhaustion policy and terminated employees instead of providing them with requested reasonable accommodations for disabilities. The EEOC District Director said the case arose from a charge filed with the EEOC by a former Sears service technician. According to the EEOC, the worker was injured on the job, took workers' compensation leave, and, although remaining disabled by the injuries, repeatedly attempted to return to work. Sears followed its policy and did not provide a reasonable accommodation which would have put him back to work and, instead, fired him when his leave expired.

Pre-trial discovery in the lawsuit revealed numerous employees had taken workers' compensation leave and were terminated by Sears without seriously considering reasonable accommodations to return them to work while they were on leave, or seriously considering whether a brief extension of their leave would make their return possible. The EEOC outlined inflexible leave policies which ignore reasonable accommodations making it possible to get employees back on the job cannot survive under federal law. If you have an inflexible leave policy, reconsider and keep reading.
 
In EEOC v. Supervalu, Inc., the EEOC again alleged violations of the ADA by claiming Supervalu (Jewel-Osco) had a policy and practice of terminating employees with disabilities when medical leaves of absence ended rather than bringing them back to work with reasonable accommodations. Allegedly Supervalu had a policy where disabled employees must be completely healed to return to work and approximately 1,000 employees were terminated under this policy since 2003. We assure our readers such a policy is certain to result in a suit filed by the federal government and if you fired numerous employees due to such a  policy, you may be facing seven-figure exposure. The Equal Employment Opportunity Commission has taken a position such a policy is unlawful under the ADA. On January 5, 2011, a consent decree was entered resolving the matter for $3.2 million and remedial relief. In shortest terms, if you have such a policy, stop using it.
 
hen an employee is out of work on workers' compensation or for any medical reason and you hit your "auto-termination deadline" whether it be six months, one year or whatever, the employer should ask:

1. At the time the auto-termination is approaching or about to trigger, we feel the employer should ask the employee in writing if  he/she has been or will soon be released to work under any temporary or permanent restrictions.
2. If there is a total medical restriction from all work in your file, we recommend you place a memo in the personnel file that you carefully considered  reasonable accommodation potential under ADA but there is a continuing total prohibition from all work and therefore, you are proceeding with termination, as the employee cannot and will not be able to perform the essential job functions of their position. This remains "legal" under Illinois law based upon the rulings in Hartlein v. Illinois Power and Hayden v. Industrial Commission.
3. If the employer finds out the treating doctor has any type of light duty restrictions prior to or as you near an auto-termination deadline, we feel the employer should evaluate whether the stated restrictions can be "reasonably accommodated" and ideally, the employer should even ask the employee if he/she has any suggestions for either (a) modifying the prior position to allow accommodation or (b) whether there are any open positions that would fit the restrictions, allowing the employee to be returned to those positions.

Remember, the employer's obligation is one of "reasonableness" and employers need not overhaul an entire facility or production line to accommodate persons with disabilities. However, simple accommodations such as step stools, chairs, inexpensive modifications to existing equipment should and must be considered before termination. 

4. If the employer has no open positions and cannot safely and reasonably accommodate the restrictions with a job modification, we recommend the employer document the effort made to consider such accommodation and place such memorandum in the employee's personnel file. You may then more safely proceed with termination.

We already have an exit document created for your consideration to use when an injured or disabled worker is leaving your employment. The concept has not been tested in litigation but we bet someone will take a shot at it soon. The idea is to affirmatively ask anyone you are firing to tell you in writing if they could return to work with reasonable accommodation and to outline the requested accommodation.

Another approach in the right situation is to try to settle any potential discrimination or retaliatory discharge charge or claim before they get rolling. If you are going to terminate a workers' compensation claimant with a pending claim, consider getting a release/resignation at the time of settling the WC claim. For folks with non-work-related issues, consider settling if you hear the drums of war at the time of discharge. Again, we have a draft release/resignation we can send, if you want to review our form.

Please also note these issues may arise if you stop paying TTD to a recalcitrant claimant-as part of the TTD dispute, the employee can demand reasonable accommodation or light duty which you don't provide.

If you get such a request, we urge you to confer with us to discuss such delicate and potentially explosive concerns. You don't want a workers' compensation claim to morph into an EEOC or IDHR charge and have to defend them all at a high cost.

Eugene Keefe and John Anderson are partners with Keefe, Campbell & Associates, a Chicago workers' compensation defense firm. This column was reprinted with their permission from the firm's client newsletter.