In a recent decision, a Pennsylvania federal court held that an acquiring company conducted over 300 unlawful pre-offer medical exams in violation of the ADA. Cambria Care Center (“CCC”) had purchased the former Cambria County owned nursing home and engaged Grane Healthcare (a separate, but related entity to CCC) to interview and hire employees for the new facility, which was set to open later in the year.
All 300 of the former county nursing home employees were invited to apply for new employment.More than 300 employees from the acquired company applied for positions with Grane [the acquiring company]. Grane ultimately hired roughly 225 of the applicants. Every applicant was required to undergo a medical examination. Several unsuccessful applicants for employment filed charges of discrimination with the Equal Employment Opportunity Commission (EEOC), alleging that Grane had violated the Americans with Disabilities Act of 1990 (ADA) by conducting pre-offer medical examinations of prospective employees and declining to hire some of them because of actual or perceived disabilities.
The record demonstrates that the employees seeking employment with Grane were subjected to a formalized process consisting of unlawful pre-offer medical examinations and illicit solicitations of detailed medical information. The individuals who were subjected to these illegal examinations and inquiries, including those who were ultimately rejected, were deprived of the prophylactic protection from discrimination that § 12112(d) was designed to create.
All 300 of the former county nursing home employees were invited to apply for new employment.More than 300 employees from the acquired company applied for positions with Grane [the acquiring company]. Grane ultimately hired roughly 225 of the applicants. Every applicant was required to undergo a medical examination. Several unsuccessful applicants for employment filed charges of discrimination with the Equal Employment Opportunity Commission (EEOC), alleging that Grane had violated the Americans with Disabilities Act of 1990 (ADA) by conducting pre-offer medical examinations of prospective employees and declining to hire some of them because of actual or perceived disabilities.
The record demonstrates that the employees seeking employment with Grane were subjected to a formalized process consisting of unlawful pre-offer medical examinations and illicit solicitations of detailed medical information. The individuals who were subjected to these illegal examinations and inquiries, including those who were ultimately rejected, were deprived of the prophylactic protection from discrimination that § 12112(d) was designed to create.
Section 12112(d) Claims
The provisions of the ADA pertaining to medical examinations and inquiries are codified at 42 U.S.C. § 12112(d). This statutory framework is designed to shield information about an applicant’s medical condition from his or her prospective employer until after an offer of employment is made. Before an offer of employment is extended, an employer may not ask a job applicant to undergo a medical examination or inquire as to whether he or she “is an individual with a disability.”
The provisions of the ADA pertaining to medical examinations and inquiries are codified at 42 U.S.C. § 12112(d). This statutory framework is designed to shield information about an applicant’s medical condition from his or her prospective employer until after an offer of employment is made. Before an offer of employment is extended, an employer may not ask a job applicant to undergo a medical examination or inquire as to whether he or she “is an individual with a disability.”
Unlike § 12112(a), which aims to protect a discrete class of
“disabled” persons from discrimination, § 12112(d) contains no language
limiting the category of applicants and employees entitled to statutory
protection. Consequently, an individual who is subjected to an unlawful
medical examination or inquiry can successfully assert a claim under § 12112(d)
without establishing the existence of a statutory “disability.” In this
vein, an applicant who is rejected by an employer based on information gleaned
from an illegal pre-offer medical examination or inquiry may seek redress under
§ 12112(d)(2)(A) even if that information does not reveal a “disabling” medical
condition. A § 12112(d) violation occurs as soon as “an employer conducts an
improper medical examination or asks an improper disability-related question,
regardless of the results or response.”
Current Charges with the EEOC
None of the seven charges currently being investigated by the EEOC require the employer to have knowledge that the applicant has a disability. The claim that an employer used an unlawful pre-offer medical exam does not turn on the employer’s knowledge of the applicant's disability -- and in fact does not require that the applicant have a disability.
For those employers utilizing Five Factor Model-based personality tests as an element of their screening and hiring process, the § 12112(d) violation occurs each time the applicant completes the test and the results are submitted to the employer or assessment company.
Current Charges with the EEOC
None of the seven charges currently being investigated by the EEOC require the employer to have knowledge that the applicant has a disability. The claim that an employer used an unlawful pre-offer medical exam does not turn on the employer’s knowledge of the applicant's disability -- and in fact does not require that the applicant have a disability.
For those employers utilizing Five Factor Model-based personality tests as an element of their screening and hiring process, the § 12112(d) violation occurs each time the applicant completes the test and the results are submitted to the employer or assessment company.
The ADA’s prohibition against pre-offer medical
examinations and inquiries is prophylactic in nature. Congress was
concerned that medical information gleaned from such examinations and inquiries
could be used to exclude disabled applicants from further consideration for
employment. In order to discriminate against an applicant “on the basis of
disability,” an employer must know that the applicant is disabled. By
denying employers access to medical information until after offers of employment
are made, § 12112(d) aims to ensure that such information does not infect the
employee-selection process. In this way, § 12112(d) deters covert
discrimination against disabled applicants by forcing employers to make hiring
decisions before procuring the information upon which discriminatory decisions
could be based.
Reducing Employer Risk Exposure
The timing or sequencing of the testing has a significant impact. Employers could reduce risk exposure by administering the test after having provided the applicant with a conditional offer of employment. The employer would still face the risks associated with tests that discriminate against persons with disabilities, but would not face the potential for claims from all applicants who took the test.
Employers sequence the testing first not because they want to include those who are the best fit for the company culture, but because they need a quick, low-cost method of excluding a significant number of applicants. As one employer (Xco) stated in its position statement,
Reducing Employer Risk Exposure
The timing or sequencing of the testing has a significant impact. Employers could reduce risk exposure by administering the test after having provided the applicant with a conditional offer of employment. The employer would still face the risks associated with tests that discriminate against persons with disabilities, but would not face the potential for claims from all applicants who took the test.
Employers sequence the testing first not because they want to include those who are the best fit for the company culture, but because they need a quick, low-cost method of excluding a significant number of applicants. As one employer (Xco) stated in its position statement,
“The [assessment] enables [Xco] to assess a large volume of applicants cost-effectively and provides consistency in that assessment. Without the [assessment] reviewing and assessing all individual applications would be extremely costly, both in terms of the labor resources needed to conduct such screening and the costs associated with training managers in making the predictive assessments yielded by the [assessment]. It also would result in greater variability in the reliability of the assessments made by individual managers.
Available Alternatives
Xco, and other employers act as if there are only two alternatives – use assessments (quick, low-cost) and don’t use assessments (time-consuming, costly). There are a variety of alternatives, including tests that do not constitute pre-offer medical exams and do not screen out persons with mental illness. Both Starbucks and CVS are prospering without using illegal pre-offer medical examinations and they do not appear to have put themselves at a competitive disadvantage.
For example, contrast the stock price performance of CVS (no assessment) and Walgreens (assessment) since CVS stopped using assessments following its settlement with the ACLU in Rhode Island. Please see "The CVS Example" in
Systemic Risk
Due to the lack of variability in the online assessments, any discriminatory element
that makes its way into the test algorithm – like the screening out of persons
with mental disabilities due to the use of the Five Factor Model - is
propagated across the entire universe of job applicants.
Congress sought “to provide clear, strong, consistent,
enforceable standards addressing discrimination against individuals with
disabilities.” 42 U.S.C. § 12101(b)(2). Covered employers cannot erode those
standards by procuring detailed medical information about applicants for
employment and contending, at the end of the day, that such information has
never been used to the detriment of those applicants. If it were otherwise,
disabled individuals would be vulnerable to several forms of discrimination
that the ADA was designed to prevent. Since most employment decisions
involve elements of discretion, it is relatively easy for an employer to
“concoct a plausible reason for not hiring” a particular individual. A decision
declaring the admitted § 12112(d) violations to be “harmless” would seriously
undermine the ADA’s policy of prophylactic deterrence.
Compensatory Damages
Before 1991, plaintiffs proceeding under Title VII could only seek “equitable” remedies. Backpay was the primary form of monetary relief available to aggrieved individuals. Section 102 of the Civil Rights Act of 1991 added compensatory and punitive damages to the remedies otherwise available under Title VII and the ADA. The relevant statutory language, permits a “complaining party” to “recover compensatory and punitive damages” from a covered entity responsible for violating § 102 of the ADA. The provisions governing medical examinations and inquiries are included within § 102.
The compensatory damages available to individuals aggrieved by violations of Title I include remuneration for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.” The total amount of compensatory and punitive damages available to “each complaining party” is capped at anywhere from $50,000 to $300,000, depending on the number of individuals employed by the covered entity.
Before 1991, plaintiffs proceeding under Title VII could only seek “equitable” remedies. Backpay was the primary form of monetary relief available to aggrieved individuals. Section 102 of the Civil Rights Act of 1991 added compensatory and punitive damages to the remedies otherwise available under Title VII and the ADA. The relevant statutory language, permits a “complaining party” to “recover compensatory and punitive damages” from a covered entity responsible for violating § 102 of the ADA. The provisions governing medical examinations and inquiries are included within § 102.
The compensatory damages available to individuals aggrieved by violations of Title I include remuneration for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.” The total amount of compensatory and punitive damages available to “each complaining party” is capped at anywhere from $50,000 to $300,000, depending on the number of individuals employed by the covered entity.
Punitive Damages
The Civil Rights Act of 1991 permits any party to “demand a trial by jury” “[i]f a complaining party seeks compensatory or punitive damages” under Title I. The disjunctive wording of this language suggests that a plaintiff can seek an award of punitive damages without seeking an award of compensatory damages. Several Courts of Appeals have concluded that punitive damages may be assessed under the relevant statutory provisions even if no compensatory damages are awarded.
Employers will likely argue that most applicants should receive little, if any, in the way of compensatory damages like backpay. The argument is based on the limited number of positions available as compared with the large number of applicants; only a small percentage of the applicants could have been hired to fill the positions. The expansive scope of compensatory damages – including nonpecuniary losses – plus the availability of punitive damages is designed to provide relief to applicants whose rights have been violated.
As noted below, precluding awards of punitive damages in cases involving no easily quantifiable physical and monetary harm would quell the deterrence that Congress intended to provide when it enacted § 12112(d). The statutory caps on damages ensure against limitless awards in cases of insubstantial harm.
The damages cap for each of the seven companies subject to the EEOC charges is $300,000 per applicant.
A plaintiff seeking punitive damages under Title I must
demonstrate that the offending employer “engaged in a discriminatory practice
or discriminatory practices with malice or with reckless indifference to [his
or her] federally protected rights.” In Kolstad v. American Dental Association,
the Supreme Court construed this language to mean that a covered employer must
“discriminate in the face of a perceived risk that its actions will violate
federal law” in order to be liable for punitive damages.
Reckless Indifference
Examples of reckless indifference by the seven companies subject to the EEOC charges may include:
Reckless Indifference
Examples of reckless indifference by the seven companies subject to the EEOC charges may include:
- Using an assessment is based on the Five Factor Model of personality, which serves as a basis for categorizing and diagnosing personality disorders in the Diagnostic and Statistical Manual of Mental Disorders.
- Failing to perform any adverse impact or validation studies on persons with disabilities. As Kronos stated in one of its filings in the EEOC litigation, “No adverse impact or validation studies have been performed by Kronos … with respect to potential adverse impact on individuals with disabilities.”
- Continuing to use the assessment for years after having been put on notice that the assessment may be an illegal pre-offer test. Contrast Kroger with CVS.
- Asking questions are neither “directly relevant” to the job nor “plainly job-related.” The questions, designed to reveal information about individuals’ “openness,” “conscientiousness,” “extraversion,” “agreeableness,” and “neuroticism,” based on the Five Factor Model, do not seek information about the ability of an applicant to perform the day-to-day functions of a job.
- Ignoring the almost 40-year old mandate of the Supreme Court in Albemarle Paper Company v. Moody, 422 US 405 (1975) that a test should be validated on people as similar as possible to those to whom it will be administered (i.e., persons with disabilities). The Court further stated that differential studies should be conducted on minority groups – like persons with mental illnesses - wherever feasible.
- Relying solely on the statements of the assessment company, without any independent review or verification by the employer. The EEOC fact sheet sets out selection and administration guidelines, including that an employer: (i) ensure that tests and selection procedures are not adopted casually by managers who know little about these processes; (ii) ensure that the tests are valid, independent of the test vendor’s documentation; and, (iii) determine whether there is an equally effective alternative selection procedure that has less adverse impact and adopt that alternative procedure if a selection procedure screens out a protected group.
Punitive Damages Do Not Require Showing of Tangible Harm
The statutory language does not condition an award of punitive damages on a showing of tangible harm. It is worth noting that the term discriminatory practice” is defined more broadly in relation to Title I than it is in relation to Title VII. Although the term includes only “discrimination” in the Title VII context, it is broad enough to encompass “violations” of the ADA that might not constitute “discrimination.”
The breadth of this language, which specifically defines a term appearing in the portion of the statute governing awards of punitive damages, suggests that Congress intended to provide for assessments of punitive damages against employers responsible for intentionally violating Title I’s prophylactic provisions. Precluding awards of punitive damages in cases involving no “easily quantifiable physical and monetary harm would quell the deterrence that Congress intended” to provide when it enacted § 12112(d). The statutory caps on damages “ensure against limitless awards in cases of insubstantial harm.”
The statutory language does not condition an award of punitive damages on a showing of tangible harm. It is worth noting that the term discriminatory practice” is defined more broadly in relation to Title I than it is in relation to Title VII. Although the term includes only “discrimination” in the Title VII context, it is broad enough to encompass “violations” of the ADA that might not constitute “discrimination.”
The breadth of this language, which specifically defines a term appearing in the portion of the statute governing awards of punitive damages, suggests that Congress intended to provide for assessments of punitive damages against employers responsible for intentionally violating Title I’s prophylactic provisions. Precluding awards of punitive damages in cases involving no “easily quantifiable physical and monetary harm would quell the deterrence that Congress intended” to provide when it enacted § 12112(d). The statutory caps on damages “ensure against limitless awards in cases of insubstantial harm.”
Accordingly, the EEOC can seek punitive damages on behalf of
the applicants who were unlawfully subjected to pre-offer medical examinations
and inquiries even if those applicants are not otherwise entitled to
compensatory damages.
Since the examinations in this case were illegally conducted
at the pre-offer stage, the EEOC can seek backpay and compensatory damages on
behalf of any applicant rejected based on unlawfully procured medical
information, regardless of whether his or her injuries are attributable to
“discrimination based on a disability.” Moreover, recovery may be sought for
less tangible injuries caused by the examinations and inquiries, irrespective
of whether those injuries manifested themselves in the form of personnel
decisions (suggesting that an “emotional” injury could constitute “actual
damage”).
