$2 Million Settlement in Disability Discrimination Lawsuit Against Dillard's, Training Ordered

Friday, December 21, 2012

Question:  Would disability discrimination training have prevented this case?  See our trainings at http://www.hrclassroom.com.

Dillard's Inc., a national retail chain, will pay $2 million and commit to extensive, company-wide injunctive relief to settle a class action disability discrimination lawsuit.  At issue was Dillard's longstanding national policy and practice of requiring all employees to disclose personal and confidential medical information in order to be approved for sick leave.  The settlement also resolves claims that Dillard's terminated a class of employees nationwide for taking sick leave beyond the maximum amount of time allowed, in violation of the Americans with Disabilities Act (ADA).

The EEOC originally filed its lawsuit in 2008 in the U.S. District Court for the Southern District of California (EEOC v. Dillard's, Inc., et al, Case No. 08-CV-1780), on behalf of Corina Scott, a former cosmetics counter employee at a Dillard's store in El Centro, Calif., and others who were required to disclose the exact nature of their medical conditions to be approved for sick leave since 2005.  

While the class members had verifications from doctors to assure Dillard's that the absences were due to medical reasons, many did not feel comfortable disclosing the specifics of their conditions to the company.  According to the EEOC, Scott - who was absent from work for a mere four days - and others were then fired in retaliation for their refusal to provide details of their medical conditions, despite the fact that many of their own doctors advised them not to disclose specific medical information in accordance with the law.  

The EEOC argued that the policy violated the ADA which prohibits employers from making inquiries into the disabilities of their employees unless it is job-related and necessary for the conduct of business.  The District Court ruled that Dillard's medical disclosure policy was facially discriminatory under the ADA.  The EEOC expects to identify thousands of victims across the U.S. through the claims notice process designed to distribute the class fund arising from this settlement.  

Additionally, the EEOC claimed that Dillards enforced a maximum-leave policy limiting the amount of health-related leave an employee could take and, in practice, did not regularly engage in an interactive process with employees to determine if more leave was allowed under the ADA as an accommodation of the employee's disability.

The parties entered into a three-year consent decree requiring Dillard's to pay $2 million to identified victims and establish a class fund for currently unidentified victims who also suffered similar discrimination during the relevant time period. 

The consent decree further requires that Dillard's hire a consultant with ADA experience to review and revise company policies as appropriate; post documentation related to this settlement; to implement effective training for both supervisors and staff on the ADA with an emphasis on medical inquiries and maximum leave policies; and, to develop a centralized tracking system for employee complaints involving disability discrimination.  Dillard's will submit annual reports to the EEOC verifying compliance with the decree.  

Dillard's Inc. ranks among the nation's largest fashion apparel, cosmetics and home furnishings retailers with annual revenues exceeding $6.2 billion.  The Little Rock, Arkansas-based company operates just under 300 stores in 29 states nationwide.

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