Smith v. Midland Brake, Inc.: writing affirmative action into the Americans with Disabilities Act?

In a decision surprising and disheartening to most employers, the U.S. Court of Appeals for the Tenth Circuit issued an en banc opinion in the case of Smith v. Midland Brake, Inc., 1999 U.S. App. LEXIS 13185 (10th Cir. 1999), in which it concluded that, under the Americans with Disabilities Act (ADA), an employee is entitled to reasonable accommodation in the form of reassignment to a vacant position, even though a better qualified candidate is available for that same position. In its 9-3 decision, the Tenth Circuit concluded that the legislative history of the ADA mandated such a result and relied, in part, upon a recent pronouncement by the Equal Employment Opportunity Commission (EEOC). EEOC Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act (1999) ("EEOC Guidance")(1) The EEOC Guidance asks the rhetorical question: "Does reassignment mean that the employee is permitted to compete for a vacant position?" EEOC Guidance at 44. The question was answered as follows: "No. Reassignment means that the employee gets the vacant position if s/he is qualified for it. Otherwise, reassignment would of little value and would not be implemented as Congress intended." Id. While the Midland Brake decision already is being hailed as a significant victory for employees with disabilities nationwide, the reasoning underlying the decision raises serious concerns about the status of employees who have disabilities vis-a-vis those who do not.

The Midland Brake Analysis

As part of its analysis, the Tenth Circuit reaffirmed what appears at this point to be an axiom of ADA interpretation, namely, that when an employer is confronted with two applicants for the same position, the employer is entitled to select the better qualified candidate, regardless of the possible disability of the less qualified candidate. Midland Brake, 1999 U.S. App. LEXIS 13185 at *30. To do otherwise, the court reasoned, would require the employer to modify the essential functions of the position, which is not required by the ADA. Id. at *31. The court distinguished, however, an employer's discretion in making an initial hiring decision from its "duty to reassign a disabled person to an existing vacant job...." Id. This distinction may be a distinction without a difference, as the following hypothetical serves to demonstrate.

Widget Company employs a sales manager (Harry) who happens to have a qualifying disability under the ADA. For all intents and purposes, Harry is a mediocre employee; but for lack of anyone else to fill the position, Widget continues to employ him. Time passes and Gizmo Corporation, a competitor of Widget, conducts a reorganization. During the reorganization, the position of sales manager is eliminated and the sales manager (Sally), who has performed very well and is highly thought of in the industry, is dismissed. Sally contacts the president of Widget (Carmen) and expresses an interest in serving as the sales manager for the company. Carmen considers herself fortunate that such a highly qualified individual wants to work for the company and dismisses Harry in order to hire Sally, the new, better qualified sales manager. In doing so, Carmen cites Sally's superior qualifications.

If Harry were to file suit under the ADA, alleging discriminatory discharge on the basis of disability, Widget would be entitled to defend against the suit by asserting a legitimate, nondiscriminatory reason for the dismissal, namely, the superior qualifications of Sally. St. Mary's Honor Center v. Hicks, 509 U.S. 502 (1993), citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). If Harry were unable to present sufficient evidence to create a genuine issue of material fact as to whether the legitimate, nondiscriminatory reason proffered by Widget was pretextual, Widget would be entitled to summary judgment in its favor. Hicks, 509 U.S. at 507-508. Nothing in the Midland Brake decision warrants a different conclusion. The problem arises, however, when the foregoing hypothetical runs headlong into the Tenth Circuit's analysis regarding reassignment under the ADA. Modifying the hypothetical illustrates the problem.

Harry is no longer disabled. During the course of his employment, however, he suffers an accident that renders him disabled and incapable of performing the essential functions of the position of sales manager, with or without reasonable accommodation. The position of assistant comptroller in Widget's finance department is currently vacant, though. Ten years earlier, before coming to Widget, Harry served as an assistant comptroller in another widget company for a period of three years. At the same time Harry becomes disabled and unable to perform his current position, the assistant comptroller at Gizmo (Bill) is dismissed because of a downsizing. Bill contacts Carmen at Widget and expresses an interest in the vacant assistant comptroller position. Bill has been working as the assistant comptroller for Gizmo for the past 15 years.

In the modified hypothetical, Carmen would prefer to hire Bill, who has been working as the assistant comptroller for a competitor for the past 15 years. By contrast, Harry, though technically qualified to be an assistant comptroller, has only three years' experience and has not worked as an assistant comptroller for quite some time. Unfortunately, Widget is located in Kansas City, and since Kansas City falls within the jurisdiction of the Tenth Circuit, Widget's corporate counsel, citing the Midland Brake decision, advises Carmen to reassign Harry to the vacant position? Bill, in the interim, joins Gadget, Inc., another competitor of Widget. To borrow freely from Lewis Carroll, what happens next is "curiouser and curiouser."

Harry is now working as Widget's assistant comptroller. While his performance is adequate, it is hardly exemplary. Three months elapse and Carmen hears news that Bill, who is still working for Gadget, has just received the assistant comptroller of the year award from the Whachamacallit Manufacturers Association. Carmen contacts corporate counsel and asks whether she can dismiss Harry, whose performance is mediocre, in order to hire Bill, whose superior qualifications are clearly evidenced by the prestigious industry award he recently received. Corporate counsel finds himself between the proverbial rock and the hard place. The situation which Carmen presents is no different than the first hypothetical in which counsel would have asserted that better qualifications are invariably a legitimate, nondiscriminatory reason for replacing an employee. However, if he provides this advice to his president, what substance does the Midland Brake opinion have, if Harry is not entitled to retain his position after reassignment?

These hypothetical scenarios underscore the incongruous nature of the Tenth Circuit's holding in Midland Brake and the D.C. Circuit's dicta in Aka v. Washington Hospital Center, 156 F.3d 1284 (D.C. 1998). What has the Midland Brake decision accomplished in terms of honoring Congress' intent in adopting the ADA if Harry can legitimately and legally be terminated three months after reassignment? More to the point, what precludes an employer from dismissing a reassigned employee for poor qualifications three days after reassignment? Is the length of time that passes between reassignment and dismissal the crucial factor to consider? Or are employers simply to read Midland Brake as forever precluding the dismissal of a reassigned employee for reasons of inadequate qualifications? Surely, such a reading would implicitly overrule an entire body of civil rights law that permits employers to dismiss employees for legitimate, nondiscriminatory reasons.

An interpretation of a statute that produces an absurd result is not favored, even if that interpretation is more consistent with the "most natural grammatical reading" of the statute. U.S.v. Steele, 519 U.S. 482 (1997); Walters v. Metropolitan Educational Enterprises, Inc., 519 U.S. 202 (1997). The Tenth Circuit's interpretation that automatic reassignment(3) is required under the ADA, regardless of the comparative qualifications of the disabled employee, is an unnecessarily broad interpretation that is fraught with peril and ignores an entire body of case law relating to when an employer may legitimately terminate a protected employee. The Tenth Circuit, notwithstanding its denials and criticisms of the Midland Brake dissent, has written into the ADA an affirmative action requirement that comes into play when an employee requests and is entitled to reassignment as a reasonable accommodation. Such preferential treatment is specifically disapproved of in the ADA's legislative history. H.R. Rep. No. 485(II), 101st Cong., 2d Sess., at 56 (1990) ("The employer would be permitted to reject the applicant with a disability and choose the other applicant for reasons not related to the disability or to the accommodation or otherwise not prohibited by this legislation. In other words, the employer's obligation is to consider applicants and make decisions without regard to an individual's disability.... But, the employer has no obligation under this legislation to prefer applicants with disabilities over other applicants on the basis of disability.")(4)

Even as the U.S. Supreme Court and other circuit courts have subjected affirmative action programs to strict judicial scrutiny,(5) the Tenth Circuit has chosen a reading of the ADA that seems to inject an element of, if not affirmative action, then certainly preferential treatment into an employer's obligation to provide a reasonable accommodation. Was there a reading of the ADA available to the Tenth Circuit which would have obviated the need for such judicial legerdemain?

The Solution

The primary explanation given by the Tenth Circuit for concluding that comparative employee qualifications are immaterial to an employer's duty to reassign a disabled employee is that a contrary conclusion would render meaningless the requirement to consider reassignment as a method of accommodation. In rejecting the notion that an employer is merely required to consider a disabled employee for reassignment, the court stated:

If a disabled employee had only a right to require the employer to consider his application for reassignment but had no right to reassignment itself ... then this promise within the ADA would be empty. The employer could merely go through the meaningless process of consideration of a disabled employee's application for reassignment and refuse it in every instance.

Midland Brake, 1999 U.S. App. LEXIS 13185 at *26.

While the court's observation certainly raises a valid concern, it does not require the conclusion that the only way to allay this concern is to grant a disabled employee the right to automatic reassignment.(6)

A less expansive reading of the ADA would have recognized that the statutory duty to reassign an employee with a disability creates a rebuttable presumption of entitlement to reassignment. Just as any civil rights plaintiff is expected to make out a prima facie case of discrimination or retaliation, an ADA plaintiff claiming unlawful denial of accommodation in the form of reassignment would be expected to make out a prima facie case of entitlement to reassignment. Under this reading, the shifting burdens analysis of McDonnell Douglas is perfectly apt and avoids imposing an unjust obligation on the employer or creating an absurd fiction based upon the distinctions between reassignment and initial application for employment.

A prima facie case--which could be established by presenting evidence that 1) the employee is a qualified individual with a disability; 2) there is no other reasonable accommodation which would permit the employee to retain his or her current position; 3) the employer has a vacant position for which the employee is qualified; and 4) the employer denied the requested reassignment--would shift the burden of production back to the employer to provide legitimate, nondiscriminatory reasons for why it denied the employee the reassignment. Presumably, an employer would at this stage in the analysis produce whatever evidence it had that it legitimately denied the reassignment because of the superior qualifications of another candidate. The employer's burden of production would, as in all traditional civil rights claims, be "exceedingly light." Holifield v. Reno, 115 F. 3d 1555, 1564 (11th Cir. 1997). Once the burden of production was met, the presumption of entitlement to reassignment would "drop out of the picture" and the plaintiff employee would have to present evidence that would create a genuine issue of fact as to whether the employer's proffered explanation was pretextual in order to avoid summary judgment.(7) See Hicks, 509 U.S. at 508-509.

This well-established "shifting burdens" model amply serves the interests of both the employee and the employer.(8) The Tenth Circuit's concern that an employer would "engage in the simple expedient of finding another job applicant"(9) and "refuse [a request for reassignment] in every instance" is no more realistic than a concern that an employer's refusal to hire, refusal to promote, or dismissal of an employee is "in every instance" based upon prohibited discriminatory or retaliatory animus. In every employment decision there exists the danger that the employer's "true" motivations may be discriminatory or retaliatory; the risk posed by this danger, however, has previously never been of such magnitude that the courts have relieved the plaintiff of his or her ultimate burden of proving discrimination or retaliation. On the contrary, the "crucible" created by the shifting burdens model correctly places the ultimate burden of persuasion on the plaintiff who claims a violation of the law. Unfortunately, the Midland Brake decision converts the overarching prohibition against discrimination which serves as the foundation of the ADA into an affirmative action policy in favor of individuals with disabilities.

The Law in the 11th Circuit

To date, the U.S. Court of Appeals for the 11th Circuit has not been presented with the precise question of whether an employee with a disability must be reassigned to a vacant position without regard for the qualifications of any other candidates. However, to the extent one reads the Midland Brake decision as requiring that a disabled employee be provided preferential treatment or affirmative action, it is reasonable to expect that the 11th Circuit would decline to follow its rationale.

As recently as last year, the 11th Circuit was presented with an ADA claim in which the employee claimed to have been entitled to have a part-time position created for her as a form of reasonable accommodation. Terrell v. USAir, 132 F.3d 621, 626 (11th Cir. 1998). The employee argued that because the ADA establishes that part-time work is per se a reasonable accommodation under 42 U.S.C. [sections] 12111(9)(B), it was the employer's obligation to create a part-time position, unless doing so created an undue hardship. Id. This is precisely the rationale which the Tenth Circuit adopts in Midland Brake: Since reassignment to a vacant position is a per se form of reasonable accommodation, the employer must reassign unless doing so creates an undue hardship. Midland Brake, 1999 U.S. App. LEXIS 13185 at *18, 21.

The 11th Circuit rejected the employee's argument in Terrell and concluded that an employer was not under an obligation to create a part-time position when part-time positions had been eliminated by the employer. Terrell, 132 F.3d at 626. The court noted that the decision to use part-time employees was a "core management policy with which the ADA was not intended to interfere." Id. at 627. In affirming the summary judgment granted to the employer, the 11th Circuit quoted approvingly from the Fifth Circuit's decision in Daugherty.(10) It also unequivocally expressed its opinion regarding the preferential treatment of workers: "We cannot accept that Congress, in enacting the ADA, intended to grant preferential treatment for disabled workers." Terrell, 132 F.3d at 627.

The Tenth Circuit distinguished Terrell by reading it narrowly and focusing on the specific facts of the case. It reasoned that since Terrell merely considered the obligation of an employer to create a position for reassignment when one did not exist, its ruling was not instructive. Midland Brake, 1999 U.S. App. LEXIS 13185 at *34. In adopting this reading, though, the Tenth Circuit ignored the broader policy pronouncements made by the court in Terrell.

Conclusion

The Tenth Circuit's desire to serve the underlying purpose of the ADA has resulted in an overbroad interpretation of an employer's duty to reassign an employee with disabilities. The purpose of this article is not to suggest that the remedies available under the ADA to a qualified individual with a disability should be limited or that reassignment is not properly a form of reasonable accommodation which an employer should be required to consider under appropriate circumstances. However, no portion of the Tenth Circuit's analysis requires the conclusion that an employee with a disability be automatically entitled to reassignment, regardless of the comparative qualifications of other candidates.

Eventually, it will fall upon the U.S. Supreme Court to resolve the dilemma created by the Midland Brake decision. The High Court will have to interpret Congress' mandate to prevent discrimination against individuals with disabilities against the backdrop of remedies enumerated in the ADA. The Tenth Circuit deferred frequently in Midland Brake to Congress' mandates, but never actually denied that its interpretation of the reassignment requirement granted preferential treatment to disabled employees. If history is any indication, the Supreme Court will adopt an interpretation of the ADA and the reassignment requirement that does not require it to resolve the constitutional question of whether granting preferential treatment in reassignment to individuals with disabilities raises an equal protection issue. As a result, how surprising would it be if the Court relied upon the established and unquestioned McDonnell Douglas standard to resolve the issue? Probably not at all.

(1) The court also relied significantly on the D.C. Circuit's en banc opinion in Aka v. Washington Hospital Center, 156 F.3d 1284 (D.C. 1998). In Aka, the employer required a disabled employee who could not be accommodated to apply and compete for a vacant position. The employee, in addition to claiming that he was entitled to reassignment to a vacant position, argued that the employer discriminated against him on the basis of his disability in not selecting him for the vacant position. Aka, 156 F. 3d at 1288. The court conducted a traditional shifting burdens analysis under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), and concluded that sufficient evidence had been presented by the employee to rebut the employer's legitimate, nondiscriminatory reason for not selecting him and, on that basis, reversed the district court's summary judgment. Aka, 156 F. 3d at 1299-1300. The court's discussion of whether an employee is entitled under the ADA to reassignment to a vacant position, regardless of his comparative qualifications, was purely dicta. Id. at 1305. In actuality, the precise issue of automatic reassignment was not presented to either the district or appellate court. Id. at 1303.

(2) The injustice of this result is further highlighted if one assumes that Bill also has a disability. Since the Tenth Circuit's focus in Midland Brake was not to prevent discrimination, but rather to guarantee reassignment to an existing employee, without regard for comparative qualifications, a better qualified disabled candidate would have to be rejected in favor of a lesser qualified one. Even under the Tenth Circuit's vision of the ADA, such a result is unjustifiable.

(3) For purposes of this analysis, the term "automatic entitlement" is limited to an employee's entitlement to reassignment when the employer's sole basis for denial of reassignment is the superior qualifications of another employee or candidate.

(4) At least two other circuit courts have disapproved of similar preferential treatment. Wernick v. Federal Reserve Bank of New York, 91 F.3d 379, 384 (2d Cir. 1996) ("Congress intended simply that disabled persons have the same opportunities available to them as are available to nondisabled persons."); Daugherty v. City of El Paso, 56 F. 3d 695,700 (5th Cir. 1995) ("We do not read the ADA as requiring affirmative action in favor of individuals with disabilities, in the sense of requiring that disabled persons be given priority in hiring or re. assignment over those who are not disabled. It prohibits employment discrimination against qualified individuals with disabilities, no more and no less." (emphasis added))

(5) See, e.g., Adarand Constructors, Inc. v. Pena, 512 U.S. 200 (1995); Engineering Contractors Association of South Florida, Inc. v. Metropolitan Dade County, 122 F.3d 895 (11th Cir. 1997). Admittedly, a system of preferential treatment based upon a person's disability would probably not merit strict judicial scrutiny. However, since the passage of the ADA, there is reason to believe that a disability-based classification could invoke some level of heightened judicial scrutiny. See Martin v. Voinovich, 840 F. Supp. 1175, 1208-10 (S.D. Ohio 1993) (applying intermediate scrutiny to disabled in light of ADA); but see Patton v. Tic United Corp., 77 F. 3d 1235, 1246 (10th Cir. 1996); Cleburne v. Cleburne Living Center, 473 U.S. 432 (1985); cf Amy S. Lowndes, Note, The Americans with Disabilities Act of 1990: A Congressional Mandate For Heightened Judicial Protection of Disabled Persons, 44 FLA. L. REV. 417 (1992).

(6) Even though the court does acknowledge later in its opinion that an employer can always raise the defense of undue hardship to preclude reassignment--Id. at *62-63--the plain import of the balance of the opinion is that the better qualifications of another candidate will never alone suffice to substantiate a claim of undue hardship. Similarly, while the court also acknowledges that the duty to accommodate may be tempered by "other important fundamental policies" of the employer--Id, at *54-55--the admittedly free market notion of rewarding excellence in performance or training is insufficient to justify denial of reassignment.

(7) The employee could, for example, present evidence that prior to her need for reassignment, no one had applied for the position, or that the employer actively sought another candidate once it became apparent that reassignment might be required. Such circumstantial evidence would be sufficient to allow a jury to draw the inference that the real reason the employer did not reassign the employee was because of the employee's disability rather than her comparative qualifications.

(8) Ironically, it is precisely this analysis which the D.C. Circuit used in Aka to reverse the summary judgment entered in favor of the employer. Aka, 156 F.3d at 1299-1300.

(9) Midland Brake, 1999 U.S. App. LEXIS 13185 at *35.

(10) See supra note 3.

Edward G. Guedes is a shareholder in the law firm of Weiss Serota Helfman Pastoriza & Guedes, P.A., Miami. He received his B.A., magna cum laude, from Amherst College and J.D. from the Harvard Law School. His practice concentrates in the fields of employment and labor law, with a particular emphasis of matters relating to the Americans with Disabilities Act and the Family and Medical Leave Act.

This column is submitted on behalf of the Labor and Employment Law Section, Robert J. Sniffen, chair, and F. Damon Kitchen, editor.

[C] 1999 Edward G. Guedes