Nevada Employer Pays $3.5 Million To Settle '100-Percent Healed' Claim

Slots chain employer Dotty's recently agreed to pay $3.5 million to settle litigation alleging its "100-percent-healed" policy discriminates against disabled workers. The June 5 settlement and consent decree entered in the federal court case of EEOC v. Nevada Restaurant Services Inc. is just the most recent victory in the EEOC's campaign to target employer "maximum-leave" and "100-percent-healed" policies.

This $3.5 million price tag should serve as a reminder to all employers that the EEOC continues to target both the formal written policy limitations on medical and disability leave and employers' administration of return-to-work requests for reasonable accommodations.

Background: EEOC Targets Employer Blanket Policies

The Equal Employment Opportunity Commission (EEOC) complaint against Dotty's alleged that the company's "well-established 100-percent-healed practice" discriminated against disabled employees in violation of the Americans with Disabilities Act (ADA). Under the 100-percent healed policy, employees returning from a medical, sick, or disability leave needed to be fully recovered before being permitted to return to work. The EEOC alleged that Dotty's 100-percent-healed policy was discriminatory because it established "an unlawful qualification standard that does not allow for reasonable accommodation of qualified individuals with disabilities."

For example, under such a policy, an employee who was on FMLA leave to have knee surgery would not be allowed to return from leave until the employee was fully recovered from the surgery. This means that if an employee was released to work with medical restrictions (such as not being permitted to stand for more than two hours without sitting for 10 minutes), the employee was not considered to be fully healed and therefore could not return to work.

The concern about such a policy is that, depending on the employee's position and essential job duties, restrictions such as sitting for 10 minutes might be an easily granted accommodation under the ADA. These types of policies automatically presume that the employee cannot work but do not allow management to consider the essential functions of the position or whether an alternative position within the company may represent a reasonable accommodation. Employers with such policies frequently reject return-to-work notes that contain any limitations out of hand rather than engaging in the interactive process.

Litigation targeting employer...