Must an employer have ill will against an employee to be liable for disability discrimination?

Facts

Stanislaus County (“County”) hired Dennis Wallace (“Wallace”) in December 1997 as a deputy sheriff. He worked in patrol and then held various positions within the sheriff’s department.

In October 2007, Wallace injured his left knee at work and filed a Workers’ Compensation claim. He later reinjured his knee at work and his orthopedic surgeon prescribed a knee brace, which Wallace wore at work until he had surgery on September 9, 2008.

Following surgery, Wallace took a paid medical leave pursuant to Labor Code §4850 for about three months until December 15, 2008. In January 2009, Wallace began another paid medical leave for his knee until April 2009.

Following this leave, Wallace worked light duty in the property and evidence room until September 2009. He had restrictions of limited climbing, limited walking on uneven ground, and limited running.

Because of his knee, Wallace began another paid leave of absence from September 2009 through March 12, 2010, which exhausted  his one year of paid leave under Labor Code §4850.

On April 1, 2010, the County received a supplemental report about Wallace’s restrictions which were: no prolonged walking in excess of 30-45 minutes without a five-minute break, no walking on uneven ground in excess of 30 minutes without a five-minute break, and no prolonged standing in excess of 30-45 minutes without a five-minute break.

On April 9, 2010, the County offered Wallace an assignment as a bailiff for at least 12 months at his pre-injury rate of pay. This was a “permanent modified duty assignment” meeting the restrictions in the supplemental report. But the restrictions were permanent only until an agreed medical examination to occur in October 2010.

The County rated Wallace above average in his performance as a bailiff.

The October 2010 examination by Dr. Baker reflected various medical issues resulting in the following new restrictions on certain activities which were to be avoided 90% to 100% of the time with 90% being a reasonable estimate:

1. No lifting more than 50 pounds
2. No bilateral overhead work or repetitive right over shoulder work
3. No forceful pushing, pulling, torqueing with the right upper extremity
4. No weight bearing more than 75% of the time
5. No more than occasional climbing, squatting, kneeling, crouching, crawling or pivoting, and
6. No walking on uneven ground more than 75% of the day.

A County disability coordinator wrote to Captain Tim David about Wallace’s new restrictions and he responded saying, “No, we do not have modified or alternative work available.” Consequently, Wallace was subsequently removed from his bailiff position. Undersheriff Heyne was aware of Wallace’s new restrictions and participated in the decision to remove Wallace as a bailiff because he could not perform the job with those restrictions.  Heyne did not ask Wallace’s supervisors if he could perform the bailiff job.  Heyne was concerned about possible injury to Wallace or others because of his inability to “wrestle with a suspect.”

On January 5, 2011, Wallace met with County Human Resources and other County employees to discuss his medical work restrictions and to see if he wanted to look at other jobs in the County.  The County concluded and told Wallace that he was removed from his bailiff job that day and the Sheriff Department had not identified any assignment as deputy sheriff that could accommodate his restrictions. But Wallace said he could perform the functions of a bailiff and identified two other jobs he thought he could work of detective and school resource officer.  Nonetheless, the County placed Wallace on an unpaid leave of absence.

On January 10, 2011, the County scheduled a meeting with Wallace again to determine if he wanted to look at other County positions from information provided five days before. Wallace said he was only interested in positions with safety retirement [which provided a higher rate of retirement than jobs with a non-safety retirement.]

From January 10, 2011 to February 2012, the County had no communication with Wallace. Human Resources notified Wallace by letter on February 9, 2012, that Wallace had not been terminated and was on a leave of absence. The letter asked Wallace to provide the County with information it had not received about his ability to work. It also asked about changes in his medical work status and any interest he had in alternative County employment. Wallace stated in his January 2012 deposition that he considered himself terminated.

On July 3, 2012, after sporadic communication between Wallace and the County, the County offered to send Wallace to a fitness-for-duty examination since Wallace maintained that he could perform the essential functions of a deputy sheriff. The County offered Wallace a job as a welfare fraud investigator, which was a non-safety retirement job.

Wallace submitted to the fitness-for-duty exam and the doctor issued a report on January 25, 2013. Based on this report, the County returned Wallace to work on January 30, 2013. Wallace had been out of work and unpaid for about two years.

The Lawsuit

Wallace filed a lawsuit in May 2011, alleging four causes of action: 1) disability discrimination, 2) failure to accommodate his disability, 3) failure to engage in the interactive process, and 4) failure to prevent discrimination.  A jury trial was held and the jury found no discrimination but was deadlocked on the other three causes of action, with the court declaring a mistrial on those three causes of action.

Both sides filed motions for summary adjudication (to resolve parts of the lawsuit). The court ruled in favor of the County on the fourth cause of action because the jury had found no discrimination. The court denied Wallace’s summary adjudication motion.

In May 2013, a second jury trial was held on the remaining causes of action: 1) failure to accommodate Wallace’s disability and 2) failure to engage in the interactive process. The jury found unanimously in favor of the County. Wallace filed an appeal of the judgment.

Analysis

The key issue on appeal was whether a jury instruction and the related special verdict question about the County’s intent (motivation) for putting Wallace on an unpaid leave of absence for about two years were wrong.

The Court of Appeal begins its analysis by explaining why proving the motivation for an employer’s adverse action against an employee is often different in disability discrimination cases under California’s Fair Employment and Housing Act (“FEHA”) than with other forms of discrimination, such as discrimination based on race, national origin, religion, age, and gender. It discusses the effect of direct evidence, rather than circumstantial evidence, the special law for disability discrimination, the meaning of “to discriminate”, and a prior key decision on how to determine the employer’s motivation.

Direct Evidence

The Court explains in this decision that unlike other forms of discrimination, disability discrimination can more often involve direct evidence about whether the motive for the employer’s conduct was related to the employee’s physical or mental condition. With such direct evidence, there is no need to apply the standard McDonnel Douglas Corp. v. Green[1] three-stage burden shifting test used with circumstantial evidence to determine the employer’s motive for its adverse employment action.

FEHA Disability Discrimination Language

The Court also noted that our legislature provided language in FEHA that distinguishes disability discrimination cases from discrimination cases involving race, national origin, religion, age, and gender. Government Code §12926.1(b) says that applicants and employees are protected from “discrimination due to an actual or perceived physical or mental impairment that is disabling, potentially disabling, or perceived as disabling or potentially disabling.” [emphasis added]

Government Code §12926.1(d) states that the legislature intends “to provide protection when an individual is erroneously or mistakenly believed to have any physical or mental condition that limits a major life activity.” [emphasis added] Consequently, an employer need not know with certainty whether an employee is disabled so long as they believe they are disabled.

Government Code §12926(m)(4) also supports that an employer can mistakenly believe that an employee is disabled and be liable. It defines a physical disability as including, “Being regarded or treated by the employer or other entity covered by this part as having, or having had, any physical condition that makes achievement of a major life activity difficult.” [emphasis added]

“To Discriminate Against” in Government Code §12940(a)

The Court analyzed the definition of “discrimination” using Black’s Law Dictionary and other sources. It concluded that “to discriminate against” means to “treat differently,” as used in Government Code §12940(a), which states, “It is an unlawful employment practice … (a) for an employer, because of the … physical disability…of any person … to discriminate against the person in compensation or in terms, conditions, or privileges of employment.”

The Harris[2] Decision about Employer Motivation

The term “because of” in Government Code §12940(a) reflects the required intent or motivation. In theHarris[3] case decided after the first jury trial in this case, the California Supreme Court clarified the meaning “because of” and said that it required a finding that discrimination was a substantial motivating factor for the adverse action against the employee. This analysis applies in mixed motive cases where the employer may have legitimate and discriminatory reasons for its actions. [In Harris, the plaintiff was a pregnant bus driver allegedly terminated for poor performance.]  From Harris, even if an employer has non-discriminatory factors that would cause it to make the same decision, it could still be found liable if discrimination was a substantial motivating factor.

In Wallace, the Court of Appeal concluded that because the CA Supreme Court in Harris analyzed an employer’s motivation without using “ill will” or “animosity” or “animus,” the Court “necessarily implies” that an employer can violate the law even if it harbored no animosity or ill will against a disabled employee.

The Court of Appeals asserted:

“Based on Harris, we conclude that an employer has treated an employee differently “because of” a disability when the disability is a substantial motivating reason for the employer’s decision to subject the employer [sp] to an adverse employment action.”

The Jury Instruction and Special Verdict Question at Issue

Wallace contends on appeal that the trial court approved an improper jury instruction and related special verdict question. The instruction said that Wallace was required to prove

“that the County of Stanislaus regarded or treated Dennis Wallace as having a disability in order to discriminate and such wrongful discrimination was a motivating reason for the adverse employment action.”

The special verdict question was,

“Did the County of Stanislaus regard or treat Dennis Wallace as having a physical disability in order to discriminate?”

The trial court said that it believed the law required the plaintiff to prove that the employer’s actions were made with the intent to discriminate, which it equated with animus. The jury answered the special verdict question with “no” and that is the reason that Wallace lost his disability discrimination cause of action in the first trial.

Based on the discussion above about “to discriminate against,” “because of,” and the current versions of CACI Jury Instruction Nos. 2540 and 2507 (supported by the Government Code and case law such as Harris), the Court of Appeals disagreed with the use of the jury instruction and special verdict question and concluded that no ill will is required and therefore determined the jury instruction and special verdict question were erroneous.

The Court of Appeal asserted the law as follows:

“Where, as here, an employee is found to be able to safely perform the essential duties of the job, a plaintiff alleging disability discrimination can establish the requisite employer intent to discriminate by proving (1) the employer knew that plaintiff had a physical condition that limited a major life activity, or perceived him to have such a condition, and (2) the plaintiff’s actual or perceived physical condition was a substantial motivating reason for the defendant’s decision to subject the plaintiff to an adverse employment action.” [emphasis added]

The Court of Appeal also concluded that the error was prejudicial in that there was a reasonable probability that without the error, a result more favorable to the appealing party would have been reached.

The County claimed that it removed Wallace from his job because of his restrictions and because it thought that he could not perform his job safely, without endangering the health and safety of Wallace or others.  But the jury found otherwise. The jury found that Wallace could have performed his job as safely with accommodations as someone without a disability.

Was the County’s perception that Wallace was disabled, a substantial motivating reason for the County to put Wallace on an unpaid leave of absence in January 2011? (The County put Wallace on unpaid leave on January 5, 2011 because of his restrictions and the belief that he could not perform his bailiff duties.) The Court of Appeal thought that a jury would say “yes” and even if the County’s disability perception was in error, Government Code §12926.1(d) says that a mistaken belief or error makes an employer liable. (The jury found that Wallace was able to perform the essential functions of his job with reasonable accommodations.)

Additionally, pursuant to California Code of Regulations, Title 2, §11068(c), when an employee can work with a reasonable accommodation other than a leave of absence, the employer may not require the employee to take a leave of absence. Therefore, the County should have allowed Wallace to work and not be put on an unpaid leave. The Court of Appeal concluded that it is reasonably probable that a jury would have found that the County’s perception of Wallace being disabled was a substantial motivating reason for its adverse action of putting him on an unpaid leave.  The Court of Appeal also determined that this element of proof was established as a matter of law.

The concurring opinion by Justice Poochigian emphasized that an employee must still prove that they can perform the essential functions of the job with an accommodation (or without) to succeed with a disability discrimination claim. A challenging situation for an employer and employee would exist if an employee cannot perform the essential functions of a job with accommodations and a doctor’s evaluation confirms this but another doctor’s opinion provides the employee can work with reasonable accommodations that don’t create an undue hardship on the employer.

Conclusion

Employers should take note that providing multiple prior accommodations will not protect against liability, as in the Wallace case.  They should also beware that even an honest mistake believing an employee is disabled and cannot perform their essential job functions with or without accommodations could lead to liability for disability discrimination.

Employees should also note that to avoid the vagaries, stress, risk, and cost of a lawsuit whenever an employee may be restricted in or precluded from work due to a disability, they should have thorough conversations with their doctors about their ability to perform the essential functions of their jobs and identify as many accommodation options as possible to enable them to fully engage in the interactive process of identifying accommodations with their employer.