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Employers Using Medical History in Hiring Decisions Take Notice: The EEOC is Watching

By George Patterson

Two recent victories for the EEOC should remind employers that rejecting a job applicant over a medical condition, even when the condition appears directly related to job performance, can expose the employer to serious legal consequences under the Americans With Disabilities Act (ADA).

On April 15, the Northern District of Illinois approved an $80,000 settlement in an EEOC lawsuit claiming an employer violated the ADA when it reversed course on its decision to hire an applicant after learning of his prostate cancer diagnosis. Two days later, the Middle District of Florida granted summary judgment for the EEOC on its claim that an employer’s revocation of an applicant’s job offer based on the results of a medical examination revealing prior back surgery violated the ADA’s “regarded as” disabled provision. Together these cases demonstrate that, whether the employer is irresponsibly ignorant of the ADA’s requirements concerning medical criteria in hiring decisions or contracts with an outside company in an effort to comply with them, the ADA’s extensive regulations governing medical testing and screening, along with the EEOC’s interpretative guidance, add unique challenges to the hiring process.

In EEOC v. Professional Freezing Services, LLC, the applicant, Harvel, applied for a warehouse manager position and claimed the company was moving forward with his application until it learned he had been diagnosed with prostate cancer. According to deposition testimony from one of the company’s employees, the company’s owner made derogatory remarks about Harvel and his condition, stating that he could not hire Harvel because he had cancer and “in a best-case scenario, would end up in diapers.” While the case settled before these facts were proven, there is no question the allegations, if true, support an ADA violation. Thus, even though the employer apparently did not perform the type of medical screening and testing of applicants that would subject it to the ADA’s rigorous anti-discrimination standards, the owner’s ignorance of the law resulted in the same type of EEOC scrutiny and unwelcome litigation that a poorly administered screening and testing program might have caused.

In EEOC v. American Tool & Mold, Inc., the applicant, Matanic, received a job offer from American Tool & Mold, Inc. and began working for the company as a process engineer. Matanic’s offer required him to undergo a medical examination with Lakeside Occupational Medical Clinic, a company that provided pre-employment medical screening services on behalf of American Tool, to determine his ability to perform the essential functions of the position. When Matanic’s examination results revealed that he had undergone back surgery six years earlier and he was unable to provide documentation from the surgical team stating that he had no permanent restrictions, Lakeside deemed him “not fit for duty” and American Tool terminated his employment. Matanic filed an EEOC charge and the agency later sued American Tool.

Ruling on the EEOC’s motion for summary judgment, the court acknowledged that the ADA permits conditional offers of employment pending the results of medical examinations, but stressed that examination results may only be used in accordance with ADA guidelines. The court determined that once American Tool became aware of Matanic’s surgery it “regarded Matanic as disabled, that is unfit to perform the job until and unless he could prove otherwise.” Moreover, American Tool did not comply with ADA regulations requiring an “individualized assessment” of Matanic’s ability to perform the “essential functions” of the job before using the examination results as a basis for withdrawing its offer. Because American Tool could not show its requirement that Matanic obtain a release from his surgical team was “job related” and consistent with a “business necessity” as required under federal regulations, the court determined that the company’s decision to revoke his job offer constituted unlawful discrimination in violation of the ADA. In the absence of an individualized assessment, the court reasoned that American Tool “cannot rely on ‘myths and fears’ regarding whether a back surgery performed years earlier might ‘place ATM at risk of potential liability …’”

While the employer in American Tool & Mold certainly exercised more measured judgment than the employer in Professional Freezing Services, the former case shows that simply having an official policy in place for medically evaluating job applicants does not establish a safe harbor from EEOC challenges. Although American Tool maintained throughout the litigation that it merely sought to provide a safe working environment and that it acted responsibly by obtaining an independent medical expert to determine whether applicants were fit for duty, the company’s actions were plainly inconsistent with a close reading of the ADA regulations.

The ADA’s requirements governing applicant medical screening are highly specific and reliance on a physician’s conclusion that an individual is not qualified to perform a position, even in good faith, will not insulate an employer who revokes a conditional job offer if all of the ADA’s guidelines have not been followed. When instituting medical examination and screening procedures, retaining sophisticated counsel with experience applying the ADA as amended and the federal regulations and EEOC enforcement guidance that define its most crucial requirements is often far less costly than responding to the violations that are otherwise likely to occur.

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