ADA Denial of Rehire

Hernandez filed a charge with the Equal Employment Opportunity Commission (EEOC), claiming that he had been discriminated against in violation of the ADA. Hernandez's theory was that the company rejected his application because of his record of drug addiction and/or because he was regarded as being a drug addict. The EEOC issued a right-to-sue letter, and Hernandez subsequently filed an action alleging a violation of the ADA. The Company's representative testified that when it reviewed and rejected Hernandez's application, it had a policy against rehiring employees who were terminated for workplace misconduct, and that they did not know that Hernandez was formerly a drug addict when his application was rejected.

The Company moved for summary judgment at the District Court and, for the first time, Hernandez argued in the alternative, that even if the Company applied a neutral “no rehire” policy in his case, it still violated the ADA because of the policy's disparate impact. The District Court found the disparate impact claim had not been timely pleaded or raised, and granted the Company's motion for summary judgment on the disparate treatment claim.

On appeal, the Ninth Circuit vacated the decision granting the Company's motion for summary judgment on the disparate treatment claim. The Ninth Circuit found that Hernandez had established a prima facie case of discrimination, and that the Company had failed to meet its burden under the burden-shifting approach of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). The Ninth Circuit held that maintaining a blanket policy against rehire of all former employees who violated company policy not only screens out persons with a record of addiction who have been successfully rehabilitated, but may well result, as Hernandez contends it did here, in the individual making the employment decision remaining unaware of the “disability” and thus of the fact that she is committing an unlawful act. The Ninth Circuit further held that a policy barring the reemployment of a drug addict despite his successful rehabilitation violates the ADA.

Supreme Court Decision

The United States Supreme Court disagreed. In a decision written by Justice Thomas, the Court found that the Ninth Circuit erred in its analytical framework for disparate-impact and disparate-treatment claims. “Had the Court of Appeals correctly applied the disparate-treatment framework, it would have been obliged to conclude that a neutral no-rehire policy is, by definition, a legitimate, non-discriminatory reason under the ADA.” The Court further explained that it has consistently recognized a distinction between claims of discrimination based on disparate-treatment and claims of discrimination based on disparate-impact. Relying on its decisions in Teamsters v. United States, 431 U.S. 324, 335 (1977) and Hazen Paper Co. v. Biggins, 507 U.S. 604, 609 (1993), the Court stated “disparate treatment is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of the race, color, religion, sex or other protected characteristic. Liability in a disparate treatment case depends on whether the protected trait actually motivated the employer's decision. By contrast, disparate impact claims involve employment practices that are facially neutral in their treatment of different groups but that can in fact fall more harshly on one group than another and cannot be justified by business necessity.”

The Court vacated and remanded the Ninth Circuit's decision, directing the Ninth Circuit to reanalyze Hernandez's denial of rehire case by reviewing whether or not there is sufficient evidence from which a jury can conclude that the company made its decision based on Hernandez's status as disabled. The Court did not answer the question of whether or not the ADA confers preferential rehire rights on employees lawfully terminated for misconduct, such as illegal drug use.

Thus, under Raytheon, employers can have a policy (written or unwritten) against rehiring former employees who were terminated for misconduct. The Supreme Court, however, did not decide if the same policy can also legally have a disparate impact on disabled former employees. Thus, under the disparate-impact theory of disability discrimination, that same facially neutral employment practice may still be deemed illegally discriminatory on remand.

Thus, employers should pay close attention to this decision. Even if a no-rehire policy is a legitimate, non-disability based reason for not rehiring a former employer, if there is a disparate-impact against a protected class, like reformed drug addicts, then the employer may still be at risk of claims of disability discrimination under the disparate-impact theory.

Recently, a unanimous, seven-member, United States Supreme Court held that the only relevant question on summary judgment in an action alleging disparate treatment under the American with Disabilities Act (ADA) was whether there was sufficient evidence from which a jury could conclude that an employer made its decision based on an employee's status as disabled, notwithstanding the employer's proffered explanation. Raytheon Company v. Hernandez, 504 US __ , 124 S.Ct. 513 (2003). The Court further held that the employer's unwritten policy against rehiring former employees who were terminated for any violation of its misconduct rules was a legitimate, non-discriminatory reason under the ADA. This case briefing discusses the Court's opinion in Raytheon, and the decision's implications for employers.

Background

Respondent, Joel Hernandez (Hernandez) worked for Hughes Missile Systems (acquired by Raytheon Company (Company)) for 25 years. Hernandez resigned after he tested positive for using cocaine in violation of Company workplace conduct rules. More than 2 years later, Hernandez applied for a job opening at the Company, stating on his application that he had previously been employed by the Company. Hernandez included with his application two reference letters, one from his pastor, stating that respondent was a “faithful and active member” of the church, and the other from an Alcoholics Anonymous counselor, stating that respondent attends Alcoholics Anonymous meetings regularly and is in recovery. Hernandez was not rehired.

Hernandez filed a charge with the Equal Employment Opportunity Commission (EEOC), claiming that he had been discriminated against in violation of the ADA. Hernandez's theory was that the company rejected his application because of his record of drug addiction and/or because he was regarded as being a drug addict. The EEOC issued a right-to-sue letter, and Hernandez subsequently filed an action alleging a violation of the ADA. The Company's representative testified that when it reviewed and rejected Hernandez's application, it had a policy against rehiring employees who were terminated for workplace misconduct, and that they did not know that Hernandez was formerly a drug addict when his application was rejected.

The Company moved for summary judgment at the District Court and, for the first time, Hernandez argued in the alternative, that even if the Company applied a neutral “no rehire” policy in his case, it still violated the ADA because of the policy's disparate impact. The District Court found the disparate impact claim had not been timely pleaded or raised, and granted the Company's motion for summary judgment on the disparate treatment claim.

On appeal, the Ninth Circuit vacated the decision granting the Company's motion for summary judgment on the disparate treatment claim. The Ninth Circuit found that Hernandez had established a prima facie case of discrimination, and that the Company had failed to meet its burden under the burden-shifting approach of McDonnell Douglas Corp. v. Green , 411 U.S. 792 (1973). The Ninth Circuit held that maintaining a blanket policy against rehire of all former employees who violated company policy not only screens out persons with a record of addiction who have been successfully rehabilitated, but may well result, as Hernandez contends it did here, in the individual making the employment decision remaining unaware of the “disability” and thus of the fact that she is committing an unlawful act. The Ninth Circuit further held that a policy barring the reemployment of a drug addict despite his successful rehabilitation violates the ADA.

Supreme Court Decision

The United States Supreme Court disagreed. In a decision written by Justice Thomas, the Court found that the Ninth Circuit erred in its analytical framework for disparate-impact and disparate-treatment claims. “Had the Court of Appeals correctly applied the disparate-treatment framework, it would have been obliged to conclude that a neutral no-rehire policy is, by definition, a legitimate, non-discriminatory reason under the ADA.” The Court further explained that it has consistently recognized a distinction between claims of discrimination based on disparate-treatment and claims of discrimination based on disparate-impact. Relying on its decisions in Teamsters v. United States , 431 U.S. 324, 335 (1977) and Hazen Paper Co. v. Biggins , 507 U.S. 604, 609 (1993), the Court stated “disparate treatment is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of the race, color, religion, sex or other protected characteristic. Liability in a disparate treatment case depends on whether the protected trait actually motivated the employer's decision. By contrast, disparate impact claims involve employment practices that are facially neutral in their treatment of different groups but that can in fact fall more harshly on one group than another and cannot be justified by business necessity.”

The Court vacated and remanded the Ninth Circuit's decision, directing the Ninth Circuit to reanalyze Hernandez's denial of rehire case by reviewing whether or not there is sufficient evidence from which a jury can conclude that the company made its decision based on Hernandez's status as disabled. The Court did not answer the question of whether or not the ADA confers preferential rehire rights on employees lawfully terminated for misconduct, such as illegal drug use.

Thus, under Raytheon, employers can have a policy (written or unwritten) against rehiring former employees who were terminated for misconduct. The Supreme Court, however, did not decide if the same policy can also legally have a disparate impact on disabled former employees. Thus, under the disparate-impact theory of disability discrimination, that same facially neutral employment practice may still be deemed illegally discriminatory on remand.

Thus, employers should pay close attention to this decision. Even if a no-rehire policy is a legitimate, non-disability based reason for not rehiring a former employer, if there is a disparate-impact against a protected class, like reformed drug addicts, then the employer may still be at risk of claims of disability discrimination under the disparate-impact theory.