SSI Disability and the ADA, Quirky Question # 97

Quirky Question # 97:

One of our employees became disabled.  He successfully applied for Social Security benefits on the ground that he was permanently disabled from working.  The EEOC now has filed an action against our company, contending that we discriminated against our former employee on the basis of his disability.  If our employee is “permanently disabled from working,” how can EEOC sue our company for a violation of the Americans With Disabilities Act?  If our ex-employee cannot work due to his disability, how can the EEOC argue that he could continue to work for us with a reasonable accommodation?  This makes no sense.

Dorsey’s Analysis:

If your former employee persuaded the Social Security Administration that he is “permanently disabled” and consequently is unable to work at all, it is difficult to understand how he can argue simultaneously that he could continue working with your company if your company provided him a reasonable accommodation.. On their face, these two positions are fundamentally inconsistent.

The problem with this context, however, is that, at least theoretically, your former employee is not the one “argu[ing] simultaneously that he could continue working with your company . . ..”  Your employee is not contending that he is a victim of discrimination; the EEOC is advancing that contention on his behalf.  And, many courts, including the U.S. Supreme Court, have drawn clear distinctions between the individual employee and the EEOC.  For example, as early as 1970, the United States Supreme Court held in General Telephone Co. of the Northwest v. EEOC, 446 U.S. 318 (1970), that “the EEOC is not merely a proxy for the victims of discrimination.”  Likewise, in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002), the nation’s high court stated, “The EEOC does not stand in the employee’s shoes.”

Given the fact that the EEOC is the plaintiff, rather than your former employee, the defense of judicial estoppel is not available to you.  The “judicial estoppel” defense is essentially the concept that a party who prevails on one ground in a lawsuit may not repudiate that ground in another lawsuit.  As courts have noted, the concept of judicial estoppel is designed to prevent manipulation of the judicial system by litigants who seek to prevail twice, on opposite legal theories.  See, e.g., Levinson v. U.S., 969 F.2d 260, 265-66 (7th Cir. 1992).  But, the judicial estoppel theory is an equitable theory, requiring consideration of multiple variables, including, for example, whether the plaintiff is the same party, or as here, different.

A recent instructive case that explored these issues is EEOC v. Autozone, Inc., No. 07-1154 (C.D. Ill. February 23, 2009).  In Autozone, the EEOC sued the defendant, alleging that it had violated the ADA in connection with its treatment of John Sheperd, a former Autozone employee.  Sheperd has ceased working for Autozone due to depression, myofascial pain, degenerative discs of the spine, and other problems.  The Social Security Administration (SSA) awarded Shepherd disability defendants, finding that his “sub-optimally controlled depression” impaired his “overall functioning . . . and effectively render[ed] him disabled.”

As the District Court found, “the EEOC is not merely an alter-ego of the individual employee, and it is not barred by prior acgtions or statements of those individuals in any other context.”  Further, picking up on the analyses of he Supreme Court and other lower federal appellate courts, the court found that “the EEOC’s interest in pursuing perpetrators of discrimination is much broader than simply obtaining relief for the victim of that discrimination.  Narrowing that interest by placing on it the same boundaries that limit individual litigants would be ill advised.”  Finally, the District Court concluded that the concern for manipulation of the judicial system did not apply given that the EEOC was not a litigant in the administrative proceedings before the SSA.   In sum, the court held that the EEOC was not a proxy for Shepherd and that its interest in pursuing relief on Shepherd’s behalf  “is a public interest in eliminating discrimination, and that interest is not as narrow as is Shepherd’s interest.”

As you can see, the fact that your former employee successfully persuaded the SSA that he was entitled to receive full SSI disability benefits will not preclude the EEOC from pursuing a disability discrimination against your company.  Having made that observation, your company still should be able to exploit the statements made by your former employee in connection with his efforts to to persuade the SSA that he was completely disabled.  You still will have a compelling argument to make to the factfinder, whether judge or jury, that the position advanced by the EEOC is hopelessly inconsistent with the position advanced by your ex-employee before the SSA.  When your former employee is called to testify regarding the nature, scope and effect of his disability, your counsel should be able to conduct an effective cross-examination.

Lastly, one issue that merits careful examination for your company is the standard for determining a disability under the ADA (especially in light of recent legislative changes to the statute) as compared to the SSI standard for determining disability.  To the extent that these standards differ, you should be prepared to explain why the same result is warranted under both statutory schemes, regardless of who is pursuing the claims on behalf of your former employee.  Good luck!

When the EEOC sued in connection with Autozone’s treatment of Shepherd, the defendant company asserted the judicial estoppel defense, pointing to the inconsistency in the position advanced by Shepherd before the SSA and the position advanced by the EEOC in its lawsuit.  As you might have guessed from the analysis above, the federal District Court rejected the defendant’s arguments with respect to the judicial estoppel defense.

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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