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Ka-ching! FedEx suffers punitive pain for failing to deliver on its ADA policy

By Mindy Chapman, Esq., Mindy Chapman & Associates
1/31/2008 - 2:00pm
ADA

Mindy Chapman, Esq., Mindy Chapman & Associates

Mindy is a nationally recognized authority in EEO laws and is a contributing editor to the HR Specialist: Employment Law monthly newsletter. She is highly regarded for her workplace compliance training that “clicks and sticks,” because it is practical and memorable. She is also the coauthor of the American Bar Association’s bestseller and authority on civil rights training, “Case Dismissed! Taking Your Harassment Prevention Training to Trial."

The Society for Human Resources Management (SHRM) has recognized Mindy as one of its Top Ten Speakers nationally. She has trained extensively in all industries at all levels of the workforce—from boardroom executives to managers and supervisors and to hourly employees in union and non-union environments.

View all articles by Mindy Chapman, Esq., Mindy Chapman & Associates

You’ve probably got an ADA policy that extends reasonable accommodations to any disabled workers. That’s good. But are your managers following through? If your paper policy is the only thing granting accommodations, a court could make you pay the price … big time. As in punitive damages.

The Americans with Disabilities Act (ADA) offers job protection to people with qualified disabilities who can perform the essential functions of the job (with or without a reasonable accommodation). The kicker: As FedEx learned last week, your company can get hit with punitive damages in ADA lawsuits if it shows “reckless indifference” for the law and rights of the employees.

Case in Point: Ronald Lockhart, who was deaf, worked as a FedEx package handler in Maryland for three years. He never requested accommodations to perform his regular work, but he repeatedly asked for a sign language interpreter or written materials to understand what was said in meetings and training sessions. FedEx ignored his requests. Lockhart couldn’t even tell what was being discussed during the meetings.

In one instance, he became very upset during the national anthrax emergency because FedEx delayed giving him a security badge for several months due to lack of an interpreter.

Eventually, Lockhart filed an EEOC charge. FedEx fired him. The EEOC won him a jury award of $8,000 in compensatory damages and $100,000 in punitive damages (which the court agreed was “nothing” compared to what FedEx could afford.)

Still, FedEx appealed, arguing that it made “good faith efforts” to comply because it had an ADA policy in its employee handbook.

So the question arose: Does having a written ADA policy shield a company from punitive damages? (EEOC v. Federal Express Corp. 4th Cir., 1/23/08)

How did this case end…and what lessons can be learned?

The court rejected FedEx’s argument, saying, “Unfortunately for FedEx, the mere existence of an ADA compliance policy will not alone insulate an employer from punitive damage liability. An employer also must take affirmative steps to implement the policy.”

The court noted that at least three higher FedEx officials “received notice that a deaf package-handler requested or was in need of ADA accommodations. In spite of such notice, there is no evidence that any alarm bells sounded in FedEx offices.”

It went on to say this: ”While an employer’s institution of a written policy against discrimination may go a long way toward dispelling any claim about the employer’s reckless or malicious state of mind, such a policy is not automatically a bar to the imposition of punitive damages. FedEx’s commitment to implementing its grievance process did not go beyond including the procedure in its manual.”

FedEx was lucky that the damages only rose to $100,000—that’s “puny” for them, not “puni-tive.”

3 Lessons Learned … Without Having to Go to Court

1. Include an ADA policy in your employee handbook. I have reviewed so many “Anti-Harassment Policies” that are too narrow and fail to address discrimination altogether. Most employers today can protect themselves, at least initially, by having a “Harassment, Discrimination & Retaliation Prevention Policy.” But, you must follow through and actually implement it.

2. Train managers & supervisors to listen for ADA requests and contact HR for centralized compliance. In this case, managers knew about the ADA and its requirements to provide reasonable accommodations but took the risks of doing nothing or delaying.

3. Respond to ADA requests & do so promptly. Remember to engage the employee in an interactive dialogue about their requests. If you have granted such requests in the past, be consistent. If it is a new request and it is reasonable, it will be cheaper to provide it than incur the unending costs of litigation and appeals only to have to pay out in the end. It also goes a long way to have a better business culture where respecting the individual is seen and heard by all.

Tags: ada, americans with disabilities act, discrimination, employee handbook, employees, hr, meetings, reasonable accommodation, retaliation

The Office Organizer: 10 tips on file organizing, clutter control, document management, business shredding policy, record retention guidelines and how to organize office emails