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Wait, Now I Can’t Fire My Employees For Stealing? California Federal Court Holds Application of Anti-Grazing Policy to Diabetic Employee May Violate the Americans With Disabilities Act

By George Patterson

A California Federal court recently permitted a disability discrimination claim to proceed to a jury trial in a lawsuit alleging that Walgreens unlawfully terminated a diabetic employee for violating its “anti-grazing” policy by eating potato chips on the job without first paying for them. In EEOC v. Walgreen Co., the court refused to toss the EEOC’s claim it brought on behalf of the employee because of a factual dispute as to whether “business necessity” required Walgreens to treat the employee the same as other workers who violated its anti-grazing policy.

Walgreen regularly accommodated Josephina Hernandez Type II diabetes disability throughout her 18-year employment with the Company. In September 2008, Hernandez experienced a hypoglycemic attack while restocking shelves and in an effort to increase her blood sugar level, she grabbed a $1.39 bag of potato chips and ate some of the chips without first paying for them. Walgreens conducted an investigation into this incident and ultimately terminated Hernandez for violating its anti-grazing policy. Hernandez filed an EEOC charge and the agency subsequently sued Walgreens on her behalf alleging claims for failure to accommodate and discrimination in violation of the ADA.

Walgreens moved for summary judgment on the first claim, arguing that tolerating employee theft can never be a reasonable accommodation under the ADA. In support of this contention the company pointed to a section in the EEOC’s own enforcement guidance stating that an employer need not withhold discipline of an employee who, because of a disability, violates a workplace rule that is job-related and consistent with business necessity. In the court’s view, however, the issue was whether the anti-grazing rule was job-related and consistent with business necessity as applied to an employee whose disability caused her to violate it.

Applying that standard, the court denied Walgreens’ motion for summary judgment, explaining “whether it was a business necessity to treat Hernandez the same as other employees who had been fired under the anti-grazing policy when Hernandez claims taking the chips was necessitated by her medical condition is a question of fact for the jury.”

In addition, the court rejected Walgreens’ claim that it could not be liable for a failure to accommodate because Hernandez failed to properly manage her diabetes and never sought the accommodation of being permitted to eat food prior to paying for it. The court again found factual issues for a jury regarding whether it was reasonable to require Hernandez to request the accommodation of violating the company’s anti-grazing policy before doing so, given the allegation that the need to stabilize her hypoglycemic attack was immediate and unforeseen.

Moreover, the court held that the EEOC had put forth sufficient facts to proceed with its ADA discrimination claim in accordance with Ninth Circuit precedent. Although Walgreens asserted that the EEOC failed to present evidence of discrimination since the company did not terminate Hernandez because of her disability, the EEOC argued that Hernandez’ disability was essentially inseparable from the cause of her termination. The court agreed, citing Dark v. Curry County, 451 F.3d 1078 (9th Cir. 2006), for the proposition that “reliance on disability-caused misconduct is by its very nature not a legitimate nondiscriminatory reason under the ADA.” Because Hernandez alleged that her decision to take the chips was a direct consequence of her diabetes, the court held that Walgreens had failed to show its termination decision was unrelated to her disability.

The Walgreens case illustrates the difficult bind employers find themselves in when an employee’s disability becomes intertwined with an act of misconduct for which the employer would normally administer discipline or termination. While previous decisions, even in the Ninth Circuit where this case was decided, have held that employers are not required to accommodate disabled employees who are illegal drug users, alcoholics or are engaged in egregious criminal behavior, the specific circumstances of the disability-related misconduct make an enormous difference in whether an accommodation is required, even to a policy that is neutral, uniformly applied and enforced for an indisputably valid business purpose.

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