They say it’s not what you know, but who you know. And who your employees know can lead to lawsuits in the area of association discrimination, if employers aren’t careful.

“Association discrimination” claims arise when an employee claims he or she has been discriminated or retaliated against because of an association or relationship with a disabled person. While a small proportion of discrimination claims are based on association discrimination, their numbers are on the upswing. With a faltering economy that requires many companies to consider layoffs, an aging population that will require more caretaking by working adults, and recent changes to the Americans with Disabilities Act (ADA) of 1990, implemented through the ADA Amendments Act, employers should brace themselves to see more of these kinds of claims.

This little-known provision about association discrimination under disability law is designed “to prevent employers from taking adverse actions based on unfounded stereotypes and assumptions about individuals who associate with people who have disabilities,” according to the U.S. Equal Employment Opportunity Commission (EEOC). Therefore, according to the EEOC, among other things, it is illegal to refuse “to hire an individual who has a child with a disability based on an assumption that the applicant will be away from work excessively or be otherwise unreliable, firing an employee who works with people who are HIV-positive or have AIDS based on the assumption that the employee will contract the disease, or denying an employee health care coverage available to others because of the disability of an employee’s dependent.”

According to the EEOC, there were 253 cases of relationship/association discrimination filed against employers in 2007, up from 194 in 2006 and 184 in 2005.

Several recent court rulings have also drawn attention to this type of discrimination claim. In 2008, the U.S. Court of Appeals for the 7th Circuit gave the green light to a former employee to pursue a disability discrimination lawsuit against the hospital that fired her, allegedly because of her husband’s high medical bills. DeWitt v Proctor Hospital began in 2005, when Phyllis DeWitt’s husband was being treated for terminal prostate cancer. Her husband was insured through DeWitt, a clinical nursing manager at Proctor Hospital in Peoria, Ill. The hospital was self-insured for the first $250,000 of annual covered medical costs, and DeWitt’s husband’s expenses had been more than $300,000 in the three years before she was fired in August 2005. According to the lawsuit, before her firing, one of DeWitt’s managers talked to her about having her husband enter hospice care, which was less expensive than the aggressive course of treatment the husband was using. The hospital also had meetings to discuss its financial troubles. Shortly after that, DeWitt was fired, and she claimed association discrimination. The appeals court agreed that DeWitt deserved to have her case heard, and that case is scheduled to go to trial in 2009.

In another 2008 case, the 10th Circuit Court of Appeals also found in favor of employees claiming association discrimination. William and Debra Trujillo, a married couple employed by PacifiCorp, were both fired in 2003, at a time their son Charlie was suffering from a brain tumor. During a six-week span when Charlie’s medical care costs reached $62,000, the company began investigating the couple on suspicions that they submitted fraudulent time sheets. The company, which had a self-financed insurance plan, eventually fired them both, claiming they falsified time records.

The Trujillos, whose son later died, claimed association discrimination based upon disability and sued PacifiCorp. They claimed the company was simply trying to get out of paying Charlie’s medical bills, and the firings were not based on merit.

The 10th Circuit noted several actions that PacifiCorp took that led to a decision in favor of the former employees. The court pointed to the company’s practice of factoring insurance costs into the budget line time for each employee’s labor costs as evidence of a motive to discriminate against employees who had expensive insurance claims. The court also noted that the company began investigating the couple for time theft - an issue that PacifiCorp had not pursued with other employees - at the same time their son was undergoing expensive medical treatment.

THE EEOC SPEAKS

According to the EEOC, an “association” that can lead to discrimination does not have to be a family one. The key to defining association discrimination lies in whether or not an employer is motivated by an employee’s relationship with someone who has a disability. As an example, the EEOC points to a restaurant owner who discovers that the chef’s boyfriend is HIV-positive and, fearing the chef will contract the disease and give it to customers through food, fires the employee. That is a violation of the ADA association provision, according to the EEOC.

Firings can lead to discrimination claims, but so can an employer’s refusal to hire someone because of a relationship. The EEOC offers another scenario to describe this kind of discrimination: An employer, looking to hire a computer programmer, identifies the best-qualified candidate but refuses to hire him because the candidate revealed during an interview that he has a child with a disability. It is a violation of the ADA to refuse to hire that person, based on a belief that his need to care for his child will hamper his work performance.

Employers also cannot refuse to promote an employee because of an association. Consider the EEOC’s example of Tiffany, a part-time salesperson at a large appliance store who applies for a full-time position. The manager rejects Tiffany’s application because her mother and sister had breast cancer, and the manager is afraid she could contract the disease and not be able to work full-time. Under the association discrimination theory, that is illegal.

Refusing any benefits or privileges available to other employees because of an association is also a violation of the ADA. Consider the case of a company that hosts an annual Christmas party for employees’ children. The company president learns that a new employee has a daughter with Down syndrome. Afraid the child will frighten other children or make others uncomfortable, he tells the employee not to bring her daughter to the party - a violation of the ADA, since other employees are allowed to bring their children.

TIPS FOR EMPLOYERS

Association discrimination claims represent tricky territory for employers. They must be sure that they not only treat the employees themselves according to the ADA, but they need to take into consideration their employees’ relatives and other associates.

Association discrimination claims assume that employers are familiar with the individual circumstances of their employees, and that any actions were taken because of those relationships. In smaller and close-knit workplaces, it’s common for many employees to know about the family situations and relationships of their colleagues. Considering how often get-well cards get passed around an office, many employees, supervisors, and owners are, indeed, aware of each other’s personal lives.

Fortunately for employers, association discrimination claims can be among the more difficult cases for employees to prove - only those disabilities covered by the ADA can be considered, and it can be hard to prove directly that an association with someone in a protected class led to the discrimination.

Nonetheless, charges of association discrimination based upon disability can harm employee morale and lead to terrible publicity. Employers need to educate themselves and their employees about association discrimination. When considering ways to head off association discrimination claims, employers should take the same steps they do when confronting any other type of discrimination.

The first step involves creating and communicating a clear policy that forbids any type of discrimination or harassment for any reason. Employers must ensure their supervisors and managers are educated about the policies. Companies should also consider regular continuing education so all policies are fresh in everyone’s mind. Companies should also create mechanisms for reporting harassment or discrimination and train managers to recognize discrimination and respond to complaints. Companies should also be consistent in their disciplinary and enforcement measures - inconsistent actions can give the appearance of discrimination, or at least allow disgruntled employees to make such claims. Companies should also document every disciplinary action, so they can offer clear reasons why any actions they take were based on merit, not discrimination.

As the economy continues to struggle, the ADA undergoes changes, and employers find themselves needing to lay off more employees, discrimination claims may rise. In light of the current situation, employers should tread carefully to ensure they protect themselves and treat their employees fairly.

Publication date: 12/22/2008