Michael W. Duffee, Steven L. Brenneman, Teri F. Thompson, Elizabeth A. Ward, Editors
Matkov, Salzman, Madoff & Gunn

Vol. 18, No. 9
April 2008

DISABILITIES

Association discrimination claim nursed back to life

The Americans with Disabilities Act (ADA) has banned employment discrimination since 1992. But one section of the Act, which prohibits discrimination against an employee as a result of "the known disability of an individual with whom [the employee] is known to have a relationship or association," is rarely invoked. Recently, the Seventh U.S. Circuit Court of Appeals (which covers Illinois) found that a Peoria nurse's case should proceed to trial. The nurse claimed she was fired because of her husband's high medical expenses.

Costly condition

Phillis Dewitt seemed to be doing well in her job as a registered nurse at Proctor Hospital in Peoria. She was hired on an "as-needed" basis in September 2001, but within a month, Proctor promoted her to a regular position as second-shift clinical manager in which she supervised nurses and other Proctor staffers. In summer 2005, she switched back to a part-time schedule and shared the second-shift manager job with a coworker. Even during the part-time stint, the hospital allowed her to retain medical coverage under its health insurance plan. In Dewitt's last evaluation, her supervisor, Mary Jane Davis, praised her as an "outstanding clinical manager [who] consistently goes the extra mile."

Dewitt's husband also was insured under Proctor's medical plan. He suffered from prostate cancer and was incurring a lot of medical expenses. For many employers, that may not have been an issue, but it was for Proctor because the hospital was self-insured for medical costs up to $250,000 per year per member. (A stop-loss insurance policy covered medical expenses exceeding that amount.) Dewitt's husband had $71,684 in medical claims in 2003, $177,826 in 2004, and $67,281 for the first eight months of 2005.

Proctor made no secret that it was concerned about the high medical expenses. In September 2004, Davis confronted Dewitt about her husband's medical claims and asked about his treatment. When she stated that he was undergoing chemotherapy and radiation, Davis asked if they had considered hospice care. Dewitt replied that although her husband's doctor considered hospice care to be less expensive, he had rejected it as premature. Davis repeated her inquiry again in February 2005, to which Dewitt responded that the situation hadn't changed.

Just what the Proctor ordered

Three months later, Davis organized a meeting of the hospital's clinical managers and informed them that the hospital was facing financial troubles. According to her, the situation required a "creative" effort to cut costs.

Proctor fired Dewitt on August 3, 2005, and designated her ineligible for rehire. She paid for continued medical coverage under COBRA (which was available for 18 months). Unfortunately, her husband died on August 9, 2006 ― just one year after she was terminated. In the meantime, she filed a claim for association discrimination under the ADA as well as claims for age and gender discrimination. The lower court dismissed the claims in favor of Proctor, and Dewitt appealed.

The Seventh Circuit wasted no time disposing of Dewitt's age and gender discrimination claims. She had little if any evidence that Proctor had fired her because of age or sex. The hospital was able to show that it had ultimately replaced her with an older worker ― thus dooming her age claim ― and she could marshal no evidence that a similarly situated male employee received more favorable treatment. As a result, the age and gender claims were properly dismissed.

Be careful who your friends are

The same didn't hold true for Dewitt's ADA claim, however. Acknowledging that the association discrimination section of the ADA is "infrequently litigated," the Seventh Circuit cited a 2004 case in which it had outlined three categories of association discrimination under the Act: (1) expense, (2) disability by association, and (3) distraction.

The "expense" scenario contemplates an employee who is fired because her spouse has a disability that is costly to the employer. The second scenario occurs when the employer thinks the disease that created the disability is contagious, and the third results when the employer worries that the employee would be too distracted from work by the disability of the person with whom she has a relationship.

Dewitt claimed she was fired so Proctor wouldn't have to continue paying for her husband's medical costs under its self-insured plan ― the type of claim falling under the "expense" category. Because ADA association discrimination claims are so rare, courts haven't clearly delineated the precise elements of such claims under the familiar McDonnell Douglas test. But that didn't deter the Seventh Circuit. It believed that Dewitt had plenty of evidence to establish her claim.

There was no dispute that Proctor was experiencing financial trouble and was quite concerned about cutting costs. The medical coverage for Dewitt's husband alone had taken a heavy toll on the hospital, which wasn't shy about its concerns. Remember, Davis had pulled her aside on two separate occasions to quiz her about her husband's high medical costs. That concern, coupled with the timing of her discharge ― just five months after her last chat with Davis and three months after the hospital told employees of "creative" cost-cutting measures ― was enough to allow her case to go to trial. A jury will have to decide whether she was fired because her husband was costing the hospital too much in medical claims each year.

According to the court, a "reasonable juror could conclude that Proctor, which faced a financial struggle of indeterminate length, was concerned that [Dewitt's husband] ― a multiyear cancer veteran ― might linger on indefinitely." Dewitt and Proctor will head back to the trial court to let a jury sort it out. Dewitt v. Proctor Hospital, No. 07-1957 (7th Cir., Feb. 27, 2008).

Don't be associated with discrimination

What can you learn from this case? Be aware that the ADA prohibits discrimination against an employee because of a known disability of an individual with whom the employee has a relationship or association. As the court explained, such claims, while infrequent, can arise when you take adverse action against an employee because of the high cost of covering a family member who has a disability.

In his concurring opinion, Judge Richard Posner imagined a case of an employer that discriminated against an employee whose family member ran up large medical bills, regardless of whether those bills were due to a disability as defined by the ADA. In such a case, said Judge Posner, the employer may avoid liability because an ADA disability played no role in the employer's decision. Future cases may teach us more about such a distinction. For now, you should be mindful that an employee who is related to or associated with a person with a disability is protected from discrimination on that basis.

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Copyright 2008 M. Lee Smith Publishers LLC

ILLINOIS EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Illinois employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.