Employers Have Discretion to Determine Essential Job Functions and What Accommodations are Reasonable

The U.S. Court of Appeals for the Fourth Circuit recently issued a decision that is remarkable for its focus on the need to balance the prerogative of employers to make decisions about the workplace in the context of accommodating employees with disabilities under the Americans with Disabilities Act.

Facts of the Case: In Elledge v. Lowe’s Home Centers, Inc., a Market Director of Stores (MDS) (Elledge) responsible for overseeing the quality and profitability of a dozen Lowe’s stores, developed mobility issue and his doctor restricted him to walking no more than four hours and working no more than eight hours per day. Normally, Elledge worked 50 to 60 hours a week and conducted at least two store visits each day which required him to drive regularly and walk the stores well in excess of four hours. Lowe’s accommodated the restrictions temporarily, but when it became clear after several months that the restrictions would be permanent, HR met with Elledge to identify other positions that he could perform. Elledge refused to pursue lesser positions and instead applied for two open director-level positions. He was rejected for each in favor of two candidates deemed by the company to be more qualified. Elledge accepted a severance package through early retirement which apparently did not require him to sign a release because he filed suit against Lowe’s. Of relevance to this case summary, he claimed that Lowe’s violated the American with Disabilities Act (“ADA”) when it declined to further accommodate him and then failed to hire him for either director opening. The trial court granted summary judgment to Lowe’s and Elledge appealed.

The Fourth Circuit’s Decision. The U.S. Court of Appeals for the Fourth Circuit (which covers Maryland, Virginia, West Virginia, and the Carolinas) affirmed.

With respect to the essential functions determination, the court specified that such functions are ones that bear “more than a marginal relationship to the job” and emphasized that the employer’s judgment must be accorded considerable deference.  As the court observed, “That makes sense. The employer’s business judgment—that is, the judgment of the entity that defined the employee’s role in the first place—commences the analysis.” While a written job description can be helpful, “a court performing the essential functions inquiry must consult the full range of evidence bearing on the employer’s judgment, including the testimony of senior officials and those familiar with the daily requirements of the job.” The court concluded that both the job description and the uncontroverted testimonial evidence made clear that an MDS was required to walk and drive extensively, and that each of two store visits per day required 2 to 3 hours of walking the floor. The same applied to the weekly schedule exceeding the 40-hour limit placed on Elledge’s work, which he testified was, in fact, his pre-surgery regular schedule. The fact that Lowe’s permitted him to work fewer hours on a temporary basis while he was recovering did not change the essential functions of the job (and the fact that Elledge himself worked beyond those limits during this period demonstrated that he knew a 40 hour week was inconsistent with his role).

The determination of what constituted reasonable accommodation was, the court noted, a fact-specific inquiry. The mere identification in the text of the ADA to accommodations that “may” be reasonable (including assignment to an open position) does not mean that these accommodations will be reasonable in all cases. Instead, the court reasoned, what is reasonable must begin with the “actor responsible in the first instance for reducing this wide solution-space to a concrete accommodation [which] is not the judiciary, or even the disabled employee—it is the employer. To the extent an employee may be accommodated through a variety of measures, the employer, exercising sound judgment, possesses ‘ultimate discretion’ over these alternatives.” The court then reasoned that Lowe’s offered accommodations to try to enable Elledge to perform the job functions, including the use of a scooter, which he rejected. Ultimately, however, when his doctor opined that the limitations were permanent, no accommodations would enable Elledge to work the required hours and engage in the degree of driving and walking indisputably required by the job.

Finally, the court examined Elledge’s assertion that he should have been placed in one of the two director level positions for which he was qualified as an accommodation mandated by the law. Although two Lowe’s HR employees identified a number of positions in company stores that would accommodate Elledge’s restrictions, he rejected them because of their lesser status and pay. The court observed that both the EEOC and other courts view reassignment to a vacant position as “a last resort” and (in the court’s word) having “last among equals” status. The foregoing status, said the court:

[R]espects core values underlying the ADA and employment law more generally. It recognizes that basic fairness in such a context rests atop an often-rickety three-legged stool, whose legs are the employer, the disabled employee, and—easiest to neglect—the other employees. Allowing other reasonable forms of accommodation to take precedence over reassignment protects the employer’s discretion over hiring. This discretion is what makes it possible for the employer to discharge its responsibility to promote workplace stability as its workforce changes over time, and—to the extent appropriate—to reward merit through predictable advancement. Such discretion is also fundamental to the employer’s freedom to run its business in an economically viable way.

The court also noted that reassignment as a last resort respected the rights of disabled employees to be afforded accommodations in the positions they hold where possible. Finally, it preserves what the court deemed the “fair balance in the relationship between the disabled employees and his colleagues.” Said the court, “[h]olding reassignment in reserve for unusual circumstances bolsters the confidence of other employees that the misfortune of a colleague will not unfairly deprive them of opportunities for which they themselves have labored.”

The court rejected Elledge’s argument that only certain narrow exceptions (such as a seniority system established by a collective bargaining agreement) will allow an employer to deny reassignment to a disabled employee as an accommodation when he no longer is able to perform his own job. Equality of opportunity for disabled employees that is the goal of the ADA should not, the court reasoned, “require employers to construct preferential accommodations that maximize workplace opportunities for their disabled employees. It does require, however, that preferential treatment be extended as necessary to provide them with the same opportunities as their non-disabled colleagues.”

The court likened Lowe’s internal system for merit-based promotions, which identified and created promotion pipelines, to the established seniority systems that the statute and the Supreme Court have recognized as not requiring displacement to favor disabled employees. The Fourth Circuit found there to be no dispute of fact that each of the individuals selected by Lowe’s for the open director spots were most qualified under that system and that the ADA was not violated by failing to preferentially transfer Elledge into the jobs.  That Lowe’s made numerous efforts to accommodate Elledge in his MDS job and worked to identify openings into which he could have transferred without competition had he accepted them satisfied Lowe’s obligations under the ADA.

Lessons Learned:  The Fourth Circuit’s decision displays an unusual (and for employers, welcome) recognition that the rights of disabled employees to be reasonably accommodated under the ADA must take into account the legitimate interests of employers in managing their workforces and of other employees in not having their reasonable expectations for advancement nullified. The principle that merit-based qualification standards may be followed in appropriate cases (especially where the employer assists disabled employees in finding other opportunities for work when they can no longer perform the essential functions of their jobs) is helpful.

One final caveat – employers in Maryland should be aware that the State Civil Rights Act was interpreted by the Maryland Court of Appeals in Peninsula Reg. Med. Cntr v. Adkins, 137 A.3d 211 (Md. 2016) as imposing a broad right to reassignment to an open position to employees with disabilities who no longer are able to perform their jobs. The Fourth Circuit, by contrast, viewed this as one among a number of other possibilities that may or may not be appropriate in a given case (and in the case before it, where the employer engaged in numerous other efforts to accommodate the employee and where it demonstrated an interest in honoring its existing system of promotions, an option the employer did not have to choose).