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An Employer’s “Honest Belief” Must Be Based On Actual Facts

On Behalf of | Sep 7, 2011 | Disability Discrimination

The Sixth Circuit issued an unpublished decision on August 18, 2011 that has the potential to make a large impact on disability discrimination cases and discrimination cases in general with respect to the “honest belief” defense often asserted by employers. In Jones v. Nissan N. Am., Sixth Cir. No. 09-5786, the Sixth Circuit reversed the district court’s decision, directing it to enter judgment in favor of the plaintiff-employee, and remanded the case for a determination as to damages.

Jones, the plaintiff-employee, was injured while working as a laborer at a Nissan plant. He was transferred to a different job with lighter duties, to which Jones’ doctor released him to work with no restrictions. Later, a worker’s compensation court determined Jones to be 30% disabled and ordered Nissan to pay worker’s compensation benefits for Jones’ injury based on Jones’ inability to return to his pre-injury job at his pre-injury rate of pay. The worker’s compensation order did not state that Jones should be placed on a medical restriction in his current job.

The decision of the worker’s compensation court was passed through various channels within Nissan, including the benefits office, management, and in-house counsel. As the decision was circulated via email, the interpretation of it underwent vast permutations, some of which were not even based on an actual reading of the order. Eventually, these “interpretations” of the order caused Nissan to place Jones on a medical leave of absence, on the basis that it had no jobs suited to his medical restrictions.

Jones protested Nissan’s decision, claiming he was able to perform his job and was not disabled; he pointed to his doctor’s release to return to work to substantiate his claim. Additionally, Jones’ supervisor stated that Jones was a “hard worker” and able to perform all the duties of his job. When Nissan failed to return Jones to work, Jones sued for disability discrimination on the theory of a perceived disability. A perceived disability theory claims that the employer regarded the employee as disabled when he is not.

At trial, the jury found for Nissan and Jones filed a motion for judgment notwithstanding the verdict and a new trial. The District Court denied the motions and Jones appealed. The Sixth Circuit reversed and remanded the case on two key grounds, finding that the District Court should have ruled for Jones as a matter of law. The first is related to the employer’s obligation to make an individualized determination as to an employee’s ability to perform the essential functions of the job when it perceives the employee to have a disability. The second ground is related to the employer’s defense of an “honest belief” in the reason for making an adverse employment decision.

As to the first issue, although Jones had a disability that was compensable under worker’s compensation law, it was not a disability that “substantially limited him in a major life activity” within the meaning of the Americans with Disabilities Act (“ADA”). Because the legal standards are different under worker’s compensation versus disability discrimination law, Nissan could not rely on the worker’s compensation court’s ruling as a basis to place Jones on unpaid medical leave of absence. Instead, Nissan was required to make an “individualized assessment” of Jones’ ability to perform his job. However, Nissan acknowledged that its physician neither examined Jones nor evaluated Jones’ medical file, and that the worker’s compensation court order was not a “medical judgment.” Nissan argued that no individualized inquiry was necessary where it relied on a legal order-in this instance, the worker’s compensation ruling. The Sixth Circuit rejected this argument. It held that regardless of where Nissan’s perception of Jones’ (in)ability to do his job came from-medical, legal, or anecdotal sources-the ADA requires it to make an individualized inquiry as to Jones’ actual ability to do his job. Because it did not do this, Nissan discriminated against Jones on the basis of a perceived disability.

Likewise, the Sixth Circuit rejected Nissan’s reliance on the “honest belief” defense. The “honest belief” defense provides that if the employer puts forth a non-discriminatory reason for taking the adverse employment action and the employer honestly believed and reasonably relied on the particularized facts before it at the time of the decision, there is no discriminatory animus. Hence, the employee cannot prove the employer discriminated against the employee. The key inquiry a court must make is whether the employer made a “reasonably informed and considered decision before taking an adverse employment action.” Thus, the court cannot “blindly assume” that the employer’s description of the reason is honest. If the employee puts forth evidence that establishes the employer failed to make a reasonably informed decision, the decisional process should be deemed “unworthy of credence.” Based on all the facts in Jones’ case, the Court concluded that no reasonable jury could find Nissan’s decisional process worthy of credence. In particular, the Court noted the many permutations that the worker’s compensation order underwent, some of which were not even based on an actual reading of the order. Further, Nissan did not distinguish between the job Jones worked at the time of his injury and the job he was transferred to after his injury. Because Jones had been transferred to a job that suited his post-injury needs, there was no need to place him on medical leave, especially given that his doctor had released him for work without restriction.

Courts tend to give employers a lot of latitude when they allege the “honest belief” defense. However, this case illustrates that employers do need to make informed decisions based on actual facts and circumstances. Where the employer does not do this, its defense fails as a matter of law.

By: Chelsea Long