Worker with disability who applied for benefits can sue, court rules.

The Sixth Circuit Court of Appeals has ruled that a factory worker with a disability can sue for discrimination even though he had already applied for Social Security, workers' compensation, and disability retirement benefits.

The plaintiff, William Blanton, filed the case in state court under a Kentucky statute similar to the federal Americans with Disabilities Act (ADA), but the defendant company removed it to federal court based on diversity jurisdiction. As a result, the Sixth Circuit used mostly federal case precedent in its decision. (Blanton v. Inco Alloys International, 108 F.3d 104 (6th Cir. 1997).)

Blanton, 51, was a long-time employee working as an extrusion press crew leader at Inco Alloys International, an industrial plant in Kentucky. He injured his back but continued to work--with pain--for several months.

Eventually, Blanton was put on medication and underwent four weeks of physical therapy. When his condition worsened, he went on disability leave for nearly two years. He applied for workers' compensation benefits and was determined to be 25 percent disabled.

When he returned to work with certain restrictions from his physician, Blanton told his supervisor and union representative that he could still do his old job if someone else on his crew knocked out die blocks with a sledgehammer. The supervisor denied Blanton's request for an accommodation and gave him a choice: Apply for disability retirement benefits or be terminated. Blanton applied for the disability benefits.

Several months later, to supplement his decreased wages, Blanton applied for Social Security disability benefits, claiming that he was totally disabled. His application was denied because the agency found that he was capable of performing limited-duty work.

Blanton sued Inco in state court for disability discrimination arising from his forced resignation. After the action was removed, the district court found that because Blanton had acknowledged he could no longer perform all the duties of his old job on his application for Social Security disability benefits, he was judicially estopped from later claiming he could perform the essential functions of that job.

The Sixth Circuit agreed that estoppel applied regarding the essential function claim.

Blanton also claimed that Inco should have transferred him to another available job in the plant that he could perform without accommodation if the company felt he could not perform his old job. If no such position were available, Blanton said he should have been allowed to replace a junior employee, which was consistent with Inco's union plan.

The district court had also rejected Blanton's transfer argument on grounds of judicial estoppel. Here, the Sixth Circuit disagreed, however, finding estoppel was inappropriate for this claim. The court noted the doctrine applies only when a party makes a successful assertion in one proceeding and then changes that assertion in a later one. The court said that although Blanton had attempted to secure both Social Security and workers' compensation benefits by claiming he was completely disabled, neither request was successful.

Moreover, although Blanton--with the undisputed acknowledgment of the defendants--was permitted to receive a disability pension, the court noted he did so when faced with the threat of termination. Under these circumstances, his application for disability pension benefits "may not have constituted the broad admission of incapacity" that the lower court indicated had triggered the estoppel. Thus, the court found the district court had not adequately addressed Blanton's claim that Inco failed to provide reasonable accommodation through reassignment to a vacant factory position.

Lexington, Kentucky, lawyer Sandra Mendez Dawahare, who represented the plaintiff, said that circuit courts have split over whether filing for Social Security disability benefits precludes filing an ADA claim as a matter of law. Until the Supreme Court takes up the matter, she said, plaintiff lawyers should "take extra time to explain to clients exactly what the precedent is in their jurisdiction before filing for any benefits.

"What you don't want to do is inadvertently create a successful defense for the employer regarding the ADA claim," Dawahare said. "But on the other hand, a plaintiff's financial needs may make it impossible not to file for some benefits. In the case of William Blanton, his income dropped from $53,000 to $15,000. He had a family to feed."

Dawahare said Inco Alloys has filed a petition for a rehearing and oral argument en bane. In the wake of the Sixth Circuit opinion, the Equal Employment Opportunity Commission has filed an amicus brief on behalf of the plaintiff.