EEOC Bears Down on Inflexible Leave of Absence Policies

October 15, 2009

On Sept. 29, 2009, Sears, Roebuck and Company agreed to pay $6.2 million as part of a consent decree to resolve a class action lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC) in federal court in Chicago. The EEOC alleged that Sears violated the Americans With Disabilities Act (ADA) by maintaining an “inflexible” workers’ compensation leave exhaustion policy, whereby Sears automatically terminated employees after 12 months of leave instead of making a case-by-case determination whether a reasonable accommodation might have allowed employees to return to work.

In addition to providing monetary relief, the three-year consent decree includes an injunction against violating the ADA and retaliation. It also requires that Sears amend its workers’ compensation policy by: (1) notifying affected employees of their right to request a reasonable accommodation at least 45 days before their leave expires; and (2) giving employees examples of reasonable accommodations, including part-time work, reassignment and additional leave. The consent decree further requires that Sears provide written reports to the EEOC explaining how its workers’ compensation practices comply with the ADA, train its employees regarding the ADA, and post a notice of the consent decree at all Sears locations.

Sears did not admit wrongdoing or liability, and the consent decree did not address the legality of Sears’ policy. However, the EEOC’s Chicago District Office recently filed at least two other federal lawsuits asserting claims under the ADA against employers with similar inflexible 12-month leave policies. EEOC v. United Parcel Service, Inc. (No. 09-C-5291) was filed on Aug. 27, 2009, and EEOC v. SuperValu, Inc. and Jewel-Osco (No. 09-CV-5637) was filed on Sept. 11, 2009.

These cases suggest that employers should re-evaluate their leave of absence policies to ensure that company leave, attendance and other practices are flexible and provide employees an opportunity to request a reasonable accommodation.

For advice, assistance or training regarding leave of absence policies and the ADA or in updating your company’s current practices, please contact the authors or any other member of the McGuireWoods Labor & Employment  or Employee Benefits teams.