Preparing for a Storm of Disability Claims
A combination of factors could lead to a sharp increase in the number of disability claims.
In the 2004 film The Day After Tomorrow, weather-related events combine to plunge the world into a new ice age. Today, in a much more realistic scenario, several factors, developing over the past several years, are poised to plunge employers into a new wave of disability claims. Since the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) became law, disability-based claims have soared. In addition, the American Psychiatric Association (APA) recently released the fifth edition of its Diagnostic and Statistical Manual of Mental Disorders, which greatly expands the number of mental disorders. Finally, the Office of Contract Compliance Programs (OFCCP), which regulates the affirmative action requirements of federal contractors, recently finalized a new rule requiring a hiring goal of a 7 percent disabled workforce. Combined, these factors are likely to lead to a sharp increase in disability claims.
The Americans with Disabilities Act (ADA) prohibits disability discrimination in employment. Disability is defined as: “an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment.” It includes both physical and mental impairments. Under the ADA, covered employers (those who have more than 15 employees) must reasonably accommodate any disabled employee, so long as the accommodation does not impose an undue hardship on the employer.
When the ADAAA went into effect, the ADA’s definition of disability was significantly broadened; the Equal Employment Opportunity Commission (EEOC), which oversees ADA enforcement, has stated: “The effect of these changes is to make it easier for an individual seeking protection under the ADA to establish that he or she has a disability within the meaning of the ADA.” The practical effect of this broadened definition has been to allow employees to skip almost completely the question of whether the employee is actually disabled.
The obligation to reasonably accommodate extends to all aspects of employment, including recruiting, hiring, assignment of work and advancement. Following notice of disability, the employer must initiate an interactive process with the individual to identify the limitations resulting from the disability and what potential accommodations would be helpful.
Employees who feel that their ADA rights have been violated must file a complaint with the EEOC. Currently, EEOC complaints are being filed at a record pace. For example, in 2012 there were 99,412 EEOC complaints filed. Of these, roughly 20 percent contained disability-based claims. Since the ADAAA went into effect, the number of people claiming mental disabilities and the total dollar amount of EEOC settlements have both increased dramatically. For example, the number of people claiming anxiety disorder disabilities rose from 488 to 1,609, with EEOC settlement amounts rising from $1.6 million in 2007 to $6.4 million in 2012. Manic depressive disorder went from 635 to 836 and $1.1 million in 2007 to $3 million in 2012. Post-traumatic stress disorder went from 221 to 699 and $611,600 to $2.5 million in that same timeframe.
Today, it is critical that employers follow through on the reasonable accommodation process to limit liability under the ADAAA.
Combined with this trend of increased claims, the APA’s fifth and newest edition of its Diagnostic and Statistical Manual of Mental Disorders (DSM-5), released early this year, threatens to lead to a further increase in the number of mental disability claims. Since 1952, the DSM has been known as the Bible of psychiatric diagnosis. The manual has been used by doctors to diagnose patients, by health insurers for billing purposes, by the Food and Drug Administration as a guide for drug approvals, and, importantly, by plaintiffs’ attorneys and the courts when assessing psychiatric disorders.
However, there are inherent problems with the DSM. For example, in 1968 the DSM-II made homosexuality a mental disorder, only to revoke that decision by vote in 1973. In addition, narcissistic personality disorder was voted out in 1968, but was subsequently voted back in 1980. Therein lies the problem with the DSM-5 — it contains a laundry list of mental disorders, defined by their symptoms and selected, for lack of a better term, by a political process.
It is this looseness of the DSM-5 that presents the greatest danger for employers. For example, the manual contains disruptive mood dysregulation disorder — better known as temper tantrums. There is also a new binge-eating disorder — eating in excess at least once a week during the previous three months. In fact, there are a slew of lesser-known disorders that may have a direct impact on the workplace, including attenuated psychosis syndrome, mild neurocognitive disorder, social communication disorder, apathy syndrome, acute stress disorder, learning disorder and Internet addiction disorder. Employees and plaintiffs’ attorneys can easily pick symptoms from the manual and present those to a doctor. A presentation of the appropriate symptoms is often enough for a patient to be diagnosed with a disability. Compounding the problem, many plaintiffs’ attorneys have a particular doctor to whom they repeatedly send clients, thereby almost ensuring the desired result.
In addition to the ADA, federal contractors must comply with the OFCCP’s affirmative action mandates. The OFCCP recently issued a new affirmative action regulation that requires federal contractors to set a single, national utilization goal that 7 percent of their workforce be people with disabilities. In addition, the new regulation requires federal contractors to elicit voluntary pre-offer identification of disabled applicants, which will likely make it harder for employers to defend against ADA lawsuits. The new regulation will be published in the Federal Register shortly and become effective 180 days after that.
Steps Employers Should Be Taking
Employers should not wait until waves of ADA claims wash over their companies. Rather, there are a number of proactive steps that employers can take, including:
- Do not use the term disability loosely. The term disability has legal consequences. Its invocation mandates compliance with the complicated regulation of the ADA. Once an employer has been put on notice that an employee may be disabled, the employer must go through the reasonable accommodation process with that employee.
- Ensure that your management team is alert to the claims of disability by employees. An employer’s management team, especially supervisors, should be up-to-date on what obligations they have to disabled employees, the EEOC’s latest requirements, and who above them needs to be involved. Supervisors and other members of the management team should receive annual training on how to deal with disability claims.
- Refer all disability claims to human resources. While supervisors and managers should be familiar with the law and ready to be the first step in the disability claim process, all disability claims should be referred to and handled by an in-house expert, such as human resources.
- Go through the required interactive process in all situations. In all situations where a disability claim has been made, employers must go through the interactive process to determine what, if any, reasonable accommodations may be made to comply with the ADA. The process requires five main steps: (1) determine the essential functions of the job; (2) determine whether an individual has a disability; (3) identify the abilities and limitations of the individual; (4) identify potential accommodations; and (5) determine the reasonableness of the accommodations and select options.
- Take claims of disability seriously. All claims of disability should be taken seriously, even those that are clearly frivolous. It is easy for employees to create a case where none would have existed had the employer responded to a complaint with proper and timely action.
- Implement a written procedure for dealing with disability claims, and follow it. All employers should have a written procedure for employees to follow in dealing with disability claims. Such procedures should be thoroughly vetted by experienced individuals, such as human resources, and should be created with input from labor and employment counsel if needed.
- Thoroughly document everything. Everything should be thoroughly documented — this includes each request and every action taken. In addition, federal contractors have more specific documentation requirements with which they must comply. Federal contractors should be aware of, and begin preparing for, the OFCCP’s new affirmative action disability regulation.
- Explore the possibility of working with a competent physician. If you do not already work with a competent industrial medicine clinic or physician, you should explore the possibility. Such a relationship can give you a great advantage when assessing possible accommodations during the interactive process.
The ADAAA requires employers to go through an interactive process even when claimed disabilities are extremely subjective and intangible. The DMS-5 will only provide further fodder for employees and plaintiffs’ attorneys. However, by knowing the requirements of the ADA and proactively educating supervisors, management and human resources, employers can put themselves in the best possible position to weather the impending storm of disability-related claims.