Benefits & Compensation News

‘Your 180 days are up, so you’re fired’: Rigid leave policy costs biz $8.6M

Are all of your leave policies flexible enough to incorporate the ADA’s interactive process? If not, here’s a painful reminder of what it can cost. 

The EEOC has been suing employers found to have rigid — or fixed — leave policies, and it’s costing employers millions in some cases.

The agency even released a resource document (i.e., informal guidance) to address what employers’ leave policies need to start doing to comply with the ADA.

The main takeaway from the document: Even if an employee’s leave has expired under an existing leave policy, if that employee is disabled, you must enter into the ADA’s interactive process to consider whether providing additional leave under the ADA is a) appropriate, and b) whether it would create an unreasonable hardship.

(HR Morning’s plain-English breakdown of the document is available here.)

Huge, nationwide lawsuit

Shortly after the document was issued, the EEOC announced a settlement with Lowe’s, and it happens to be one of the largest — or, at least, most expensive — legal spats to date over the issue of rigid leave policies.

The settlement is a capstone for the document that provides a good example of the kinds of leave policies/practices the EEOC is trying to thwart.

The agency sued Lowe’s claiming the home improvement giant violated the ADA by firing disabled individuals and failing to provide reasonable accommodations to them when their medical leaves of absence exceeded the 180-day (and subsequent 240-day) limits under Lowe’s policies.

The EEOC also claimed that Lowe’s violated the ADA by terminating individuals who were “regarded as” disabled, had a record of disability, and/or were associated with someone with a disability.

To end the litigation, Lowe’s entered into a consent decree with the EEOC, which will require the employer to:

  • distribute $8.6M to effected individuals
  • retain a consultant with ADA experience to review and revise company policies
  • implement effective training for supervisors and staff
  • develop a centralized tracking system for employee requests for accommodation
  • maintain an accommodation log
  • post documentation related to the settlement, and
  • provide regular reports to the EEOC to verify compliance with the settlement.

EEOC General Counsel David Lopez had this to say about the agreement with Lowe’s:

“This settlement sends a clear message to employers that policies that limit the amount of leave may violate the ADA when they call for the automatic firing of employees with a disability after they reach a rigid, inflexible leave limit. We hope that our efforts here will encourage employers to voluntarily comply with the ADA.”

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