Tenth Circuit blocks attempt to narrow Rehabilitation Act in disability cases.

Since 1990, small employers--those with fewer than 15 workers--have counted on the Americans with Disabilities Act (ADA) to protect them from employees' lawsuits claiming discrimination based on disability. But the Tenth Circuit recently punched a hole in that statutory shield by ruling that the ADA's 15-worker limit does not apply to claims brought under the Rehabilitation Act of 1973, which prohibits discrimination by entities that receive federal funds. (Schrader v. Ray, 296 F.3d 968 (10th Cir. 2002).)

The ruling highlights an often overlooked avenue of recovery for people with disabilities who endure on-the-job discrimination, said lawyer Patrick Cipolla, of Tulsa, Oklahoma, who represented the plaintiff in the case.

"I don't think many plaintiff attorneys are aware of the Rehabilitation Act of 1973. Typically, in discrimination cases, the plaintiffs' bar looks to well-known statutes like Title VII, the ADA, or the Age Discrimination in Employment Act. But the Rehabilitation Act is a viable alternative in a disabilities case if you have a small employer" that is not covered by the ADA.

This would include many doctor and dentist offices, Cipolla said. "The act applies to anyone who accepts federal financial assistance from the government. Lots of small doctor and dentist offices accept Medicare, so they would be covered," he said.

The case arose from a dispute between Alexis Kim Schrader, a medical records clerk and receptionist, and the doctor's office where she worked. Schrader claimed that when she had to take several months' leave for treatment of kidney cancer and a brain tumor, her supervisor assured her that her job would be available when she was able to work. But when she tried to return, she was fired.

Schrader sued her employer--the doctor's professional corporation--claiming that her termination violated [section] 504 of the Rehabilitation Act. That law prohibits "any program or activity receiving federal financial assistance" from subjecting an "otherwise qualified individual with a disability" to discrimination. According to court documents, the doctor's office received federal funds in the form of Medicare and Medicaid payments made on behalf of some patients.

The trial court granted summary judgment for the defendant, noting that a 1993 amendment to the Rehabilitation Act incorporated Title I of the ADA, which also prohibits disability-based workplace discrimination, but only by employers with 15 or more workers. The trial court barred Schrader's suit because the doctor's office had fewer than 15 employees.

Reversing, the Tenth Circuit said that when Congress passed the Rehabilitation Act's amendments, it never meant to weaken the law by making it subject to the ADA's limited application to large employers.

"Section 504 set forth a blanket prohibition of employment discrimination against persons with disabilities by any entity that received federal financial assistance, regardless of the number of employees. The legislative history of [the 1993 amendment] contains no indication that Congress intended to limit the previously broad applicability of the Rehabilitation Act by exempting employers who have less than 15 employees from coverage. Had this been the intent of Congress, it surely would have been explicit on this significant change," the court wrote.

While other federal appellate courts have touched on issues similar to those presented in Schrader, none has issued a ruling that directly conflicts with the Tenth Circuit's reasoning, Cipolla said. Given that, he said, "I think that the [U.S.] Supreme Court will never address this issue. The Tenth Circuit's decision will be the leading case on the subject."

For now, at least. The court recently denied the defendant's motion for reconsideration, Cipolla said, and the deadline has passed for seeking Supreme Court review.