Employment Law Daily Firing employee after he switched to employer health plan may violate ADA, ERISA
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Monday, March 12, 2018

Firing employee after he switched to employer health plan may violate ADA, ERISA

By Lorene D. Park, J.D.

An employee who ran one of a staffing agency’s offices for years but was fired less than four months after he switched from his wife’s health insurance plan to his employer’s plan, and after four recent hospitalizations, avoided summary judgment on his ADA discrimination and ERISA retaliation claims. The federal district court in Ohio explained that enrolling in the health plan was protected activity under ERISA and the timing of his termination, which the employer said was for cost-cutting reasons, was evidence of a causal link. As for the ADA claim, the employee satisfied the definition for disability and the company co-owner’s remarks calling him the “six million dollar man” suggested the employer knew or had reason to know of his disability when he was fired (Feldmeyer v. BarryStaff, Inc., March 5, 2018, Barrett, M.).

Switched to employer’s health plan. After the staffing agency hired the employee in 2007, he was tasked with running the agency’s new office in Mason, Ohio. Indeed, a company co-owner credited the idea for opening the office to the employee, who helped decide where it should be located. Over the next seven years, the employee was on his wife’s health insurance plan. He was hospitalized four times and, in December 2014, he switched over to his employer’s health plan, costing the employer over $600 per month.

According to the employee, around this time, the company co-owner began making derogatory remarks about the employee’s health and commented on his age. Also, the parties disputed whether the employee’s location was profitable. The company pointed to emails in which the co-owner expressed concern about profitability but the employee claimed the third quarter of 2014 was one of the best and the co-owner had placed $100 bills on each employee’s desk.

Termination. On April 17, 2015, the employee was terminated. He claimed he was told it was an effort to cut costs but the co-owner asserted that he told the employee they were going in a different direction. The company hired a new employee to handle the sales component of the employee’s former job and an existing employee took over the remainder. The employee filed suit alleging violations of the ADA, ADEA, and ERISA, as well as state law claims.

Disabled under ADA. Denying summary judgment on the ADA disability discrimination claim, the court rejected the employer’s argument that the employee failed to make a prima facie showing that he was disabled and that the employer knew or had reason to know he was disabled. Between August and December 2014, he was hospitalized four times for: 1) cellulitis related to diabetes; 2) a cardiac incident; 3) a hip replacement; and 4) another hip replacement. Though the employer argued that he failed to show he was substantially limited, this was unpersuasive and he satisfied the definition of disability under 29 C.F.R. § 1630.2(h)(1), which includes any “physiological disorder or condition…affecting one or more body systems …” The employee also satisfied the “regarded as” prong of the definition under Section 1630.2(g)(3).

“Six million dollar man” comment shows knowledge. With respect to the employer’s knowledge of his disability, the court pointed to evidence that the employee took time off for each hospital stay and, with respect to the employee’s hip replacements, the co-owner allegedly referred to the employee as the “six million dollar man” when speaking to a client. That was enough to show the employer knew he was disabled.

Pretext. Also, while the employer argued that the employee was terminated because of productivity and his failure to a reach revenue goal, the employee raised a triable issue on whether this was pretext. His evidence included: an email from the employer just before his hospitalization, congratulating the employee on his 7-year anniversary and thanking him for his hard work; testimony by the co-owner that the office was not operating at a loss between 2011 and 2014; and the instance when the co-owner put $100 bills on employee desks. While the employer had contrary evidence, a jury would have to resolve this dispute.

ERISA claim proceeds too. The employee’s claim that he was fired in retaliation for enrolling in the employer’s health insurance plan would also go to trial. Enrolling in the plan was a protected activity and ERISA plainly prohibits retaliation because a participant availed himself of an ERISA right. Moreover, the court found sufficient evidence to support a causal link based on the timing of the employee’s enrollment in the plan and his termination less than four months later, allegedly in an effort to cut costs.

No age discrimination. However, summary judgment was granted on the employee’s ADEA claim. Though, contrary to the employer’s argument, he sufficiently showed he was performing his job satisfactorily at the time he was fired, he failed to raise a triable issue on pretext. He relied on the co-owner’s testimony that he wanted to bring someone “new in that could energize” current employees and the employee’s own testimony that the co-owner on multiple occasions made comments like “what do you expect at your age.” However, the employee admitted that these comments were not related to the employee’s ability to do his job and the court found the comments too isolated and ambiguous to support a finding of age discrimination.

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