United States: Seventh Circuit: Reassignment Of Disabled Workers Is Not Required

The Corporate Counselor

The United States Court of Appeals for the Seventh Circuit recently ruled in EEOC v. United Airlines, Inc., No. 11-1774 (March 7, 2012) that the Americans with Disabilities Act (ADA) does not require employers to reassign disabled employees to vacant positions for which they are qualified if better qualified candidates apply and it is the employer's "consistent and honest" policy to hire the best qualified applicant. This decision was in keeping with prior Seventh Circuit precedent in cases like EEOC v. Humiston-Keeling, 227 F.3d 1024 (7th Cir. 2000). The issue has split the federal appeals courts, with the Tenth and District of Columbia (D.C.) Circuits holding that the ADA requires reassignment; the First, Third, Fifth and Federal Circuits holding that reassignment may be required if the employee shows "special circumstances"; and the Eighth Circuit simply holding that reassignment is not required.

The Seventh Circuit's Decision in United Airlines

The policy at issue in United Airlines required disabled employees to follow a competitive transfer process if they needed reassignment to accommodate their disabilities. Although this process gave disabled employees "a preference" for the position when they were equally qualified with another applicant, the competitive nature of the process allowed United Airlines to fill vacant positions with other, more qualified applicants instead of disabled employees. The EEOC filed suit to challenge this policy in May 2009 on behalf of five disabled employees. The District Court for the Northern District of Illinois granted United Airlines' motion to dismiss under the rationale that controlling Seventh Circuit precedent, as announced in Humiston-Keeling, does not require the reassignment of a disabled employee. On appeal, the EEOC argued that the Supreme Court's decision in US Airways, Inc. v. Barnett, 535 U.S. 391 (2002), undercut Humiston-Keeling, and that Barnett requires that disabled employees be reassigned to vacant positions. The Seventh Circuit disagreed and affirmed the district court's decision. However, because it found the EEOC's argument persuasive, the court recommended en banc review to consider whether the EEOC's position was correct.

Barnett and the Circuit Split

In Barnett, the Supreme Court ruled that a request for reassignment was not automatically unreasonable simply because it would provide a preference to a disabled employee in violation of a seniority system. 535 U.S. at 398. The Supreme Court then outlined an approach for analyzing the reasonableness of requests for reassignment that violate established seniority systems. The court held that ordinarily, a request for reassignment that violates a seniority system will be unreasonable unless a plaintiff shows "special circumstances" that justify departure from the system. Id. at 403. If the plaintiff can show "special circumstances," the burden shifts back to the employer to show that the requested reassignment poses an undue hardship.

In the wake of Barnett, the circuit courts have interpreted the evidentiary burden imposed in reassignment cases involving seniority systems or other nondiscriminatory rules in different ways. Deriving their reasoning from cases like Smith v. Midland Brake Inc., 180 F.3d 1154 (10th Cir. 1998), and Aka v. Wash. Hosp. Ctr., 156 F.3d 1284 (D.C. Cir. 1998), the Tenth and D.C. Circuits hold that the employer has an affirmative obligation to reassign employees despite an established seniority system or other non-discriminatory rule unless the employer demonstrates undue hardship. See, e.g., Duvall v. Georgia- Pacific Consumer Prods., L.P., 607 F.3d 1255, 1260-61 (10th Cir. 2010). In order to avoid reassignment, these circuits require the employer to show that the seniority system is an "important fundamental polic[y] underlying legitimate business interests." Id. at 1261.

Other circuits have interpreted Barnett to allow reassignment in violation of a seniority system only if the employee first demonstrates "special circumstances" that justify departure from the system. See Tobin v. Liberty Mut. Ins. Co., 553 F.3d 121, 137 (1st Cir. 2009); Medrano v. City of San Antonio, 179 Fed. Appx. 897, 900-01 (5th Cir. 2006); Office of the Architect v. Office of Compliance, 361 F.3d 633, 641-42 (Fed. Cir. 2004); Shapiro v. Twp. of Lakewood, 292 F.3d 356, 360-361 (3d Cir. 2002). These courts require an employee to show either: 1) "that the employer retains the right to change the seniority system unilaterally, and exercises that right fairly frequently, reducing employee expectations that the system will be followed"; or 2) that "the system already contains exceptions such that, in the circumstances, one further exception is unlikely to matter." Barnett, 535 U.S. at 405. If the employee can demonstrate such "special circumstances," the request may be deemed reasonable, and the burden will shift to the employer to show undue hardship.

Finally, the Eighth Circuit has held that reassignment of a disabled employee is not required if it violates an employer's legitimate, nondiscriminatory policy to hire the most qualified candidate. Huber v. Wal-Mart Stores, Inc., 486 F.3d 480, 483-84 (8th Cir. 2007). The defendants in United Airlines cited the Huber case in support of their argument that reassignment was not required under Humiston-Keeling.

Two Tests

With the exception of the Eighth Circuit approach, which simply holds reassignment requests to be unreasonable whenever a valid nondiscriminatory rule allows the employer to place someone else into an open position, the circuit spilt essentially centers on who bears the burden of proof—the employee, or the employer—and the two competing tests contain different evidentiary presumptions. The test followed by the Tenth and D.C. Circuits presumes that reassignment is mandatory unless the employer proves otherwise. By contrast, the test followed by the First, Third, Fifth, Seventh, and Federal Circuits presumes that reassignment in violation of an established seniority system is unreasonable unless the employee can prove otherwise.

Imposing the burden of proof on the employer as required under the Tenth and D.C. Circuits seems inconsistent with the text of the Barnett opinion. The Supreme Court said that normally a request for reassignment in violation of a seniority system would be an unreasonable request because "it would not be reasonable in the run of cases that the assignment in question trump the rules of a seniority system." Barnett, 535 U.S. at 403. The Court then imposed a requirement for a plaintiff to show "special circumstances" justifying departure from the seniority system before she could prevail on the reasonable accommodation prong of her claim and shift the burden to the employer to prove undue hardship. Barnett, 535 U.S. at 405-06. The Circuits that side with the EEOC's view in United Airlines do not follow this analytical approach because they do not require the plaintiff to show "special circumstances" that justify departure from the seniority system or another nondiscriminatory rule.

This is a very important distinction because the two tests produce different results. Under the approach followed by the Tenth and D.C. Circuits, an employer must show that the policy is an "important fundamental polic[y] underlying legitimate business interests." Duvall, 607 F.3d at 1261. The application of this test may produce different results for an employer depending on how the seniority system is structured. For example, a seniority system negotiated as part of a collective bargaining agreement in order to protect worker's rights would probably pass the Tenth and D.C. Circuit test. However, another seniority system that was established by an employer to protect the seniority of the owner's friends and relatives who have worked for the company for the longest time period may fail the test because the policy would not underlie a legitimate business interest.

By contrast, the Barnett test grants the employer a presumption that an established seniority system always renders a request for reassignment in violation of the policy unreasonable unless the employee can first show "special circumstances" that justify departure from the policy. See Barnett, 535 U.S. at 408 (Stevens, J., concurring). Under the Barnett test, the second seniority system discussed above would pass muster, and the employee would have no claim unless she could show that special circumstances permit a departure from the established policy.

Implications

In United Airlines, the Seventh Circuit recommended en banc review to determine the validity of the EEOC's position. However, even if the full panel of the Seventh Circuit reverses the decision and adopts the EEOC's rationale, the circuit split will remain. Additionally, reversal will not change the fact that the Eighth, Tenth and D.C. Circuits appear to incorrectly interpret the Supreme Court's guidance in Barnett. The Eighth Circuit does not use the correct test, and the rationale used in the Tenth and D.C. circuits derives from Midland Brake and Aka, both of which were decided before Barnett, and their subsequent validity is questionable in light of Barnett's holding. The EEOC already tried to persuade the Seventh Circuit to adopt the Midland Brake / Aka rationale in Humiston-Keeling. If the Seventh Circuit refused to adopt that rationale prior to the decision in Barnett, it seems unlikely that it will do so now. However, should the EEOC prevail on its position en banc, it will deepen the existing split and likely hasten Supreme Court intervention to address this issue.

In the meantime, this recent decision from the Seventh Circuit should serve as a reminder for employers to carefully consider the propriety of reasonable accommodations for disabled workers in light of the specific facts at hand. Additionally, in cases where reassignment is requested as an accommodation and where a seniority system or similar nondiscriminatory rule is at issue, employers should carefully read Barnett and ensure that the analytical approach outlined in that case is correctly followed.

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