Recent Supreme Court Developments

June 1, 1999 Advisory

On June 22nd the United States Supreme Court issued four decisions of great interest to employers. Three of the decisions addressed the question of whether an individual is disabled within the meaning of the Americans with Disabilities Act when mitigating measures, such as medication and eye glasses, allow the individual to function normally. Sutton v. United Air Lines, Inc., Murphy v. United Parcel Service, Inc., and Albertson's, Inc. V. Kirkingburg. The fourth case involved the availability of punitive damages in Title VII cases. Kolstad v. American Dental Association.

The ADA Cases

The Court, in finding that the determination of whether an employee is disabled under the ADA must be made while taking into account corrective measures, significantly reduced the number of individuals who can claim ADA protection.

Medication and Other Corrective Aids:
The Court found three provisions of the law to support its decision. First, the Court found it significant that the ADA defines a disability as an impairment that "substantially limits" one or more major life activities. Since the definition is in the "present indicative verb form," the person must be presently disabled. Thus, the test is not whether the impairment "might, could or would be substantially limiting if mitigating measures were not taken," but whether, accounting for mitigating measures, there is a current substantial limitation.

The Court also pointed to the requirement that the ADA imposes on employers to treat employees on an individualized basis, rather than as a member of a group that might be generally affected in a particular way by an uncorrected impairment. Finally, the Court found that Congress, by noting that the law was intended to protect "some 43 million Americans," did not intend to cover the estimated 160 million people with correctable impairments.

Regarded as Disabled.
Of course, the ADA also protects people from discrimination because they are "regarded as" disabled. In two of the cases decided by the Court, the individuals claimed that even if they were not disabled under the ADA, the employer "regarded" them as disabled. The Court disagreed, holding that for the ADA to apply, a person needs to be regarded as being unable to work in a broad class of jobs. Because the employers in question believed only that the individuals were unable to work in one specific job, the ADA did not apply.

Effect on Employers.
In addition to narrowing the definition of disability, thereby reducing the number of employees who may bring suit under the ADA, the Supreme Court gave employers guidance regarding the establishment of physical criteria for jobs. In particular, the Court held that "an employer is free to decide that physical characteristics or medical conditions that do not rise to the level of an impairment... are preferable to others, just as it is free to decide that some limiting, but not substantially limiting, impairments make individuals less than ideally suited for a job."

The Title VII Punitive Damages Case

In the context of Title VII, the Supreme Court found that even if an employee has been discriminated against, the employee is not necessarily entitled to punitive damages. The law states that victims of discrimination may be awarded punitive damages if the employer has engaged in intentional discrimination and has done so "with malice or with reckless indifference to the federally protected rights of [the employee]." Interpreting that provision of the law, the Court said that for an employer to be liable for punitive damages, it must act with a state of mind that indicates an "evil motive." An employer who acts without knowledge of the law, or under the belief that the acts engaged in are legal, would not have the requisite state of mind and would not be liable for punitive damages.

Perhaps more importantly, the Court also held that when an employer engages in "good-faith efforts" to comply with anti-discrimination laws, it will not generally be liable for punitive damages as the result of the discriminatory actions of its managers. The Court stressed that Title VII's primary objective is not to provide redress for harm but to avoid harm altogether. Thus, the Court reasoned, the purposes of Title VII are advanced when employers are encouraged to adopt antidiscimination policies and to educate their personnel on Title VII's prohibitions. Employers who engage in such measures have a "good faith" defense to claims for punitive damages.

Practical Application.
Although punitive damages are not commonly assessed, the possibility of a jury awarding them often increases the cost of settlement. This decision, however, suggests that employers who act in good faith and have effective antidiscrimination policies may be largely insulated from punitive damages claims. Training supervisors and managers on the relevant company policies as well as on the law is an additional protective measure that employers should consider.