Recent Developments from Around the States

Finding that health insurance distinctions that apply equally to all cannot be discriminatory, the California Court of Appeal held that Knight could not establish a prima facie case of disability discrimination under FEHA. In making this determination, the court began by looking to EEOC interpretations of the ADA, a statute that closely mirrors state employment discrimination law under FEHA. According to the court, EEOC Guidance makes clear that “a distinction that has a greater adverse impact on disabled individuals who require a particular form of treatment but not other disabled persons does not discriminate on the basis of disability within the meaning of the ADA.” Acknowledging the deficiency of the alternative conclusion, the California Court of Appeal found that “[i]f the ADA and the FEHA prohibited the treatment-based distinction [Knight] challeng[ed], the statutes would constitute not just shields against disability discrimination but swords mandating comprehensive healthcare coverage for all job-related disabilities, because that is the only form of coverage that does not discriminate on the basis of treatment.” The court found further support for the legality of the District's health plan coverage in the Knox-Keene Health Care Service Plan Act of 1975, which also specifically authorizes the exclusion of coverage for IVF treatment, even while it mandates coverage of other fertility treatments. Likewise, the court cited several federal cases interpreting the ADA that did not prohibit treatment-based distinctions in the provision of healthcare coverage (See Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th Cir. 2000) (holding that provision of greater benefits for physical disabilities than mental disabilities does not violate ADA because employer did not treat affected employee differently due to her disability); Saks v. Franklin Covey Co., 117 F.Supp.2d 318 (S.D.N.Y. 2000) (holding that the exclusion of surgical impregnation procedures like IVF does not violate the ADA and other antidiscrimination laws because the employer's plan offers the same coverage to all employees, fertile and infertile alike); Krauel v. Iowa Methodist Medical Center, 95 F.3d 674 (8th Cir. 1996) (holding that because the Plan's infertility exclusion applied equally to all individuals, it did not violate the ADA by singling out a particular group of disabilities). The California Court of Appeals thus upheld the lower court's granting of summary judgment to the District.

Prima Facie Case Under California Disability Discrimination Statute Does Not Require Plaintiff to Prove He is a 'Qualified Individual'

The California Court of Appeals has held that in a disability discrimination case under the Fair Employment and Housing Act (FEHA), it is the employer's burden to establish that plaintiff is incapable of performing his essential duties with reasonable accommodation, rather than the plaintiff's burden to prove that he is a “qualified individual,” as under the ADA. Green v. State of California, 2005 WL 2031107 (Cal. Ct. App. Aug. 24).

Plaintiff Dwight D. Green, stationary engineer for defendant State of California's correctional facility, discovered that he had Hepatitis C in 1990, after working for defendant for 16 years. His duties as stationary engineer, including supervision and work on the maintenance and repair of boilers, air-conditioners, and other equipment and mechanical systems, were carried out with the help of a crew of inmates. Green also aided the facility's guards in performing searches and preventing injury and escape. When Green began treatment for his condition with a drug called Interferon, the resulting side effects, including fatigue, aches, and stress, caused his physician to request that Green be placed on light duty for several months. Defendant accommodated Green by allowing him to arrive late on days when he received treatment and by occasionally permitting him to take on assignments that did not require heavy labor. After a series of back injuries, which also necessitated that Green be given light duty assignments, that coincided with a second Inferon treatment session, Green was given clearance to return to performing “full duty” work. However, supervising employees' review of Green's file persuaded them that he should not have been given such clearance and that he was incapable of carrying out his duties. Green's supervisors gave him a few options regarding his continued relationship with defendant, none of which included a return to his position as a stationary engineer unless he could obtain a letter clearing him for full duty. Initially, Green opted to accept the option of disability retirement. However, Green subsequently asked for and was denied his job back, and then refused to complete an application for disability retirement, instead filing a claim for disability discrimination with the Department of Fair Employment and Housing and a claim for damages with the Superior Court. The Superior Court, Bernardino County entered judgment on the jury verdict for Green, but reduced the award for economic damages.

In upholding the lower court's judgment for Green on his discrimination charge, the California Court of Appeals clarified the elements of plaintiff's burden of proof under FEHA. While noting that California courts had previously used the ADA as a model for determining the elements of a prima facie case under FEHA, the court in this case began by recognizing the significant differences between the two statutes. The court indicated that “[i]n contrast to the Disabilities Act's use of the term 'qualified individual,' the general rule under the FEHA prohibits disability discrimination against 'any person' without reference to employment qualifications” (citing 42 U.S.C. '12940(a)). Likewise, in the California Code of Regulations, “'[d]isability discrimination is established by showing that an employment practice denies, in whole or in part, an employment benefit to an individual because he or she is an individual with a disability'” (Cal.Code Regs., tit. 2, ' 7293.7). Further, the Fair Employment and Housing Commission's regulations, to which courts give considerable deference, include “inability to perform” in their list of potential defenses (citing Cal.Code Regs., tit. 2, ' 7293.8). Therefore, the court found that unlike under the ADA, for a plaintiff to recover on a FEHA claim, he must only show that he was discriminated against because of his disability; and if the defendant cannot establish an inability to perform or other defense, the plaintiff will be entitled to relief.

The California Court of Appeals, while acknowledging that this interpretation of state statute gives plaintiffs greater protections than federal disability discrimination law, found that “FEHA requires liberal construction of its provisions to accomplish its purposes.” In support of this analysis, the court quoted the California Legislature's statement that “[a]lthough the federal act provided a floor of protection, this state's law has always, even prior to passage of the federal act, afforded additional protections.” The court found that its reading of FEHA would achieve this goal by removing plaintiffs' burden to prove capacity to perform as part of their prima facie case. Reviewing Green's case under this statutory framework, the court found evidence in the record that Green's disability or work restrictions were a “motivating factor” for defendant's decision to retire him, and that defendant had not proven that due to his physical restrictions, Green was unable to perform the essential functions of his position as stationary engineer. Defendants, rather than identifying “to what extent plaintiff's restrictions actually affected his work performance, had “simply assumed that an employee with plaintiff's limitations would not be able to fix boilers, climb stairs, and supervise inmates.” The California Court of Appeals thus upheld the judgment in favor of Green under FEHA.

Union Employees Engaged in Work Stoppage, Rather Than Lockout, Denied Unemployment Compensation

The Ohio Court of Appeals has upheld a decision of the Unemployment Review Commission holding that union employees who failed to maintain the status quo after the expiration of a collective bargaining agreement were unemployed due to a labor dispute other than a lockout, and thus were not eligible for unemployment compensation benefits. Abrams-Rodkey v. Summit County Children Services et al., 2005 WL 2031775 (Ohio App., Aug. 24).

After negotiations failed to produce an agreement prior to the extended deadline for expiration of their previous collective bargaining agreement, numerous members of Communi-cation Workers of America, Local 4546, who were employees of Summit County Children Services (SCCS), took part in presenting their employer with a notice of intent to strike or picket form and did not show up to work. These members, approximately 230 in all, then filed claims for unemployment-compensation benefits. The Ohio Department of Job and Family Services' Unemployment Compensation Division denied their claims, finding that because these members were engaged in a work stoppage, and not a lockout precipitated by their employer's actions, they were not entitled to unemployment compensation pursuant to R.C. 4141.29. Both the Unemployment Compensation Review Commission and the Summit County Court of Common Pleas upheld this decision.

In upholding the trial court's determination that the union employees in question had in fact participated in a work stoppage as opposed to a lockout, and were thus prevented from securing unemployment compensation, the Ohio Court of Appeals defined a “lockout” as “'a cessation of the furnishing of work to employees or a withholding of work from them in an effort to get for the employer more desirable terms'” (quoting Bays v. Shenango, 53 Ohio St.3d 132, 133 (1990)). The court noted that a lockout occurs when “'the conduct of the employer in laying down terms must lead to unemployment inevitably in the sense that the employees could not reasonably be expected to accept the terms and, in reason, there was no alternative for them but to leave their work'” (quoting Zanesville Rapid Transit, Inc. v. Bailey, 168 Ohio St. 351, 355 (1958)). Using this definitional understanding of “lockout”, the Ohio Supreme Court developed the “status quo” test for determining whether a lockout occurred upon expiration of a collective-bargaining agreement. Under the status quo test, courts must answer the following: “Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations?” A lockout is said to have occurred only if the employer, by refusing to extend the expired contract, fails to maintain the status quo.

Applying the status quo test to the circumstances at hand, the Ohio Court of Appeals found that even though, upon expiration of the contract extension, SCCS provided a written statement indicating that all previous and existing offers would be considered withdrawn and all tentative agreements null and void, the union employees who refused to return to work failed to maintain the status quo.

Exclusion of IVF Treatment from Employer-Provided Health Insurance Policy Does Not Violate California Disability Law

The California Court of Appeal has held that a school district's provision of employee health insurance that did not provide coverage for in vitro fertilization treatment (“IVF”) did not constitute disability discrimination in violation of the Fair Employment and Housing Act (FEHA). Knight v. Hayward Unified School District, 2005 WL 2033333 (Cal. Ct. App. Aug. 24).

Andrew K. Knight, a teacher, brought a claim of disability discrimination under FEHA against his employer, the Hayward Unified School District (the District), when he and his wife required and were forced to obtain IVF treatment at their own expense, as it was not covered by the District-provided group health plan. While Knight's wife had never been employed by the District, she was listed as a dependent covered by her husband's health plan. The PacifiCare Health Maintenance Organization (the PacifiCare Plan) that the District made available covered many other forms of infertility treatment, but specifically excluded IVF. After being diagnosed with polycystic ovarian disease, Knight's wife received a number of infertility treatments covered by the PacifiCare Plan to no avail. She then underwent two IVF treatment procedures that resulted in pregnancy and subsequent miscarriages. Knight initially filed a charge with the Equal Employment Oppor-tunity Commission (EEOC) alleging sex and disability-based discrimination under the Americans with Disabilities Act (ADA), and the EEOC issued a right-to-sue letter. However, due to the intervening U.S. Supreme Court decision in Board of Trustees of the Univ. of Ala. v. Garrett , 531 U.S. 356 (2001), which held that the ADA does not apply to the states, Knight sued the District for disability discrimination under FEHA. The first and second causes of action alleged disparate treatment discrimination and disparate impact discrimination based on Knight's own disability, and the third and fourth alleged the same charges based on Knight's association with his disabled wife. The lower court dismissed the first and second causes of action for failure to exhaust administrative remedies, and granted summary judgment in favor of the District on the third and fourth causes of action.

Finding that health insurance distinctions that apply equally to all cannot be discriminatory, the California Court of Appeal held that Knight could not establish a prima facie case of disability discrimination under FEHA. In making this determination, the court began by looking to EEOC interpretations of the ADA, a statute that closely mirrors state employment discrimination law under FEHA. According to the court, EEOC Guidance makes clear that “a distinction that has a greater adverse impact on disabled individuals who require a particular form of treatment but not other disabled persons does not discriminate on the basis of disability within the meaning of the ADA.” Acknowledging the deficiency of the alternative conclusion, the California Court of Appeal found that “[i]f the ADA and the FEHA prohibited the treatment-based distinction [Knight] challeng[ed], the statutes would constitute not just shields against disability discrimination but swords mandating comprehensive healthcare coverage for all job-related disabilities, because that is the only form of coverage that does not discriminate on the basis of treatment.” The court found further support for the legality of the District's health plan coverage in the Knox-Keene Health Care Service Plan Act of 1975, which also specifically authorizes the exclusion of coverage for IVF treatment, even while it mandates coverage of other fertility treatments. Likewise, the court cited several federal cases interpreting the ADA that did not prohibit treatment-based distinctions in the provision of healthcare coverage (See Weyer v. Twentieth Century Fox Film Corp. , 198 F.3d 1104 (9th Cir. 2000) (holding that provision of greater benefits for physical disabilities than mental disabilities does not violate ADA because employer did not treat affected employee differently due to her disability); Saks v. Franklin Covey Co. , 117 F.Supp.2d 318 (S.D.N.Y. 2000) (holding that the exclusion of surgical impregnation procedures like IVF does not violate the ADA and other antidiscrimination laws because the employer's plan offers the same coverage to all employees, fertile and infertile alike); Krauel v. Iowa Methodist Medical Center , 95 F.3d 674 (8th Cir. 1996) (holding that because the Plan's infertility exclusion applied equally to all individuals, it did not violate the ADA by singling out a particular group of disabilities). The California Court of Appeals thus upheld the lower court's granting of summary judgment to the District.

Prima Facie Case Under California Disability Discrimination Statute Does Not Require Plaintiff to Prove He is a 'Qualified Individual'

The California Court of Appeals has held that in a disability discrimination case under the Fair Employment and Housing Act (FEHA), it is the employer's burden to establish that plaintiff is incapable of performing his essential duties with reasonable accommodation, rather than the plaintiff's burden to prove that he is a “qualified individual,” as under the ADA. Green v. State of California, 2005 WL 2031107 (Cal. Ct. App. Aug. 24).

Plaintiff Dwight D. Green, stationary engineer for defendant State of California's correctional facility, discovered that he had Hepatitis C in 1990, after working for defendant for 16 years. His duties as stationary engineer, including supervision and work on the maintenance and repair of boilers, air-conditioners, and other equipment and mechanical systems, were carried out with the help of a crew of inmates. Green also aided the facility's guards in performing searches and preventing injury and escape. When Green began treatment for his condition with a drug called Interferon, the resulting side effects, including fatigue, aches, and stress, caused his physician to request that Green be placed on light duty for several months. Defendant accommodated Green by allowing him to arrive late on days when he received treatment and by occasionally permitting him to take on assignments that did not require heavy labor. After a series of back injuries, which also necessitated that Green be given light duty assignments, that coincided with a second Inferon treatment session, Green was given clearance to return to performing “full duty” work. However, supervising employees' review of Green's file persuaded them that he should not have been given such clearance and that he was incapable of carrying out his duties. Green's supervisors gave him a few options regarding his continued relationship with defendant, none of which included a return to his position as a stationary engineer unless he could obtain a letter clearing him for full duty. Initially, Green opted to accept the option of disability retirement. However, Green subsequently asked for and was denied his job back, and then refused to complete an application for disability retirement, instead filing a claim for disability discrimination with the Department of Fair Employment and Housing and a claim for damages with the Superior Court. The Superior Court, Bernardino County entered judgment on the jury verdict for Green, but reduced the award for economic damages.

In upholding the lower court's judgment for Green on his discrimination charge, the California Court of Appeals clarified the elements of plaintiff's burden of proof under FEHA. While noting that California courts had previously used the ADA as a model for determining the elements of a prima facie case under FEHA, the court in this case began by recognizing the significant differences between the two statutes. The court indicated that “[i]n contrast to the Disabilities Act's use of the term 'qualified individual,' the general rule under the FEHA prohibits disability discrimination against 'any person' without reference to employment qualifications” (citing 42 U.S.C. '12940(a)). Likewise, in the California Code of Regulations, “'[d]isability discrimination is established by showing that an employment practice denies, in whole or in part, an employment benefit to an individual because he or she is an individual with a disability'” (Cal.Code Regs., tit. 2, ' 7293.7). Further, the Fair Employment and Housing Commission's regulations, to which courts give considerable deference, include “inability to perform” in their list of potential defenses (citing Cal.Code Regs., tit. 2, ' 7293.8). Therefore, the court found that unlike under the ADA, for a plaintiff to recover on a FEHA claim, he must only show that he was discriminated against because of his disability; and if the defendant cannot establish an inability to perform or other defense, the plaintiff will be entitled to relief.

The California Court of Appeals, while acknowledging that this interpretation of state statute gives plaintiffs greater protections than federal disability discrimination law, found that “FEHA requires liberal construction of its provisions to accomplish its purposes.” In support of this analysis, the court quoted the California Legislature's statement that “[a]lthough the federal act provided a floor of protection, this state's law has always, even prior to passage of the federal act, afforded additional protections.” The court found that its reading of FEHA would achieve this goal by removing plaintiffs' burden to prove capacity to perform as part of their prima facie case. Reviewing Green's case under this statutory framework, the court found evidence in the record that Green's disability or work restrictions were a “motivating factor” for defendant's decision to retire him, and that defendant had not proven that due to his physical restrictions, Green was unable to perform the essential functions of his position as stationary engineer. Defendants, rather than identifying “to what extent plaintiff's restrictions actually affected his work performance, had “simply assumed that an employee with plaintiff's limitations would not be able to fix boilers, climb stairs, and supervise inmates.” The California Court of Appeals thus upheld the judgment in favor of Green under FEHA.

Union Employees Engaged in Work Stoppage, Rather Than Lockout, Denied Unemployment Compensation

The Ohio Court of Appeals has upheld a decision of the Unemployment Review Commission holding that union employees who failed to maintain the status quo after the expiration of a collective bargaining agreement were unemployed due to a labor dispute other than a lockout, and thus were not eligible for unemployment compensation benefits. Abrams-Rodkey v. Summit County Children Services et al., 2005 WL 2031775 (Ohio App., Aug. 24).

After negotiations failed to produce an agreement prior to the extended deadline for expiration of their previous collective bargaining agreement, numerous members of Communi-cation Workers of America, Local 4546, who were employees of Summit County Children Services (SCCS), took part in presenting their employer with a notice of intent to strike or picket form and did not show up to work. These members, approximately 230 in all, then filed claims for unemployment-compensation benefits. The Ohio Department of Job and Family Services' Unemployment Compensation Division denied their claims, finding that because these members were engaged in a work stoppage, and not a lockout precipitated by their employer's actions, they were not entitled to unemployment compensation pursuant to R.C. 4141.29. Both the Unemployment Compensation Review Commission and the Summit County Court of Common Pleas upheld this decision.

In upholding the trial court's determination that the union employees in question had in fact participated in a work stoppage as opposed to a lockout, and were thus prevented from securing unemployment compensation, the Ohio Court of Appeals defined a “lockout” as “'a cessation of the furnishing of work to employees or a withholding of work from them in an effort to get for the employer more desirable terms'” (quoting Bays v. Shenango , 53 Ohio St.3d 132, 133 (1990)). The court noted that a lockout occurs when “'the conduct of the employer in laying down terms must lead to unemployment inevitably in the sense that the employees could not reasonably be expected to accept the terms and, in reason, there was no alternative for them but to leave their work'” (quoting Zanesville Rapid Transit, Inc. v. Bailey , 168 Ohio St. 351, 355 (1958)). Using this definitional understanding of “lockout”, the Ohio Supreme Court developed the “status quo” test for determining whether a lockout occurred upon expiration of a collective-bargaining agreement. Under the status quo test, courts must answer the following: “Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations?” A lockout is said to have occurred only if the employer, by refusing to extend the expired contract, fails to maintain the status quo.

Applying the status quo test to the circumstances at hand, the Ohio Court of Appeals found that even though, upon expiration of the contract extension, SCCS provided a written statement indicating that all previous and existing offers would be considered withdrawn and all tentative agreements null and void, the union employees who refused to return to work failed to maintain the status quo.