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Former Employee May Sue Under the ADA to Challenge Company’s Long-Term Disability Policy

The Americans with Disabilities Act (ADA) covers former employees, the Eleventh Circuit Court of Appeals ruled in Johnson v. Kmart Corp., 273 F.3d 1035 (11th Cir. 2001).  Thus, an employee who resigned in 1997 had standing to challenge Kmart’s long-term disability policy that varies benefits for mental and physical illnesses.  The policy provided employees disabled by mental illness could receive salary replacement for two years, while those disabled by physical illness were eligible to receive such benefits until age 65.  The plaintiff worked for Kmart for 30 years, but was forced to quit in 1997 due to depression and emotional illness.

In deciding the ADA covers former employees, the court noted the ADA’s definition of “employee” was imported from Title VII of the 1964 Civil Rights Act, and the Supreme Court held ex-employees may sue under Title VII in Robinson v. Shell Oil Co., 519 U.S. 337 (1997).  The Eleventh Circuit joins the Second and Third Circuits, while the Seventh, Ninth, and Tenth Circuits hold the ADA covers only current employees. 

The court remanded the issue of whether a long-term disability plan is discriminatory if it provides less-generous benefits for employees unable to work due to mental illness as opposed to physical ailments.  Kmart argued the ADA prohibits only discrimination between the disabled and the non-disabled, while the plaintiff and the EEOC argued the ADA prohibits discrimination based on differential treatment of one disabled person as compared with another.  The Eleventh Circuit agreed with the latter, stating “the ADA demands more than impartial treatment of the disabled as compared to the non-disabled.” 

The remaining question, which will be decided on remand, is whether the ADA’s “safe harbor” provision exempts discrimination among the disabled from liability.  The provision exempts employers from liability for a bona fide benefit plan, so long as the safe harbor is not used as a “subterfuge to evade the purposes” of the ADA.