Supreme Court to Decide: Can Former Employees Sue Under the ADA?

The Americans with Disabilities Act (ADA), a landmark civil rights law enacted over three decades ago, continues to shape the landscape of workplace protections for individuals with disabilities. Yet, despite the passage of time, key questions remain unresolved, including a significant one currently before the U.S. Supreme Court: Can former employees sue under the ADA for post-employment benefits? The Court’s ruling could have far-reaching implications for employers, particularly those offering post-employment benefits, such as retirement health subsidies.

Today’s article explores the background of the case, potential outcomes, and the practical implications for employers. We also provide real-world advice for HR professionals to navigate this legal uncertainty and ensure compliance.

The Case Before the Supreme Court

The case of Stanley v. City of Sanford, Fla. centers on a former firefighter, diagnosed with Parkinson’s disease, who took disability retirement at age 47. Her lawsuit claims that the city’s reduction of her health insurance subsidy—available only for 24 months due to her disability and lack of 25 years of service—constituted disability discrimination under the ADA. The city argues that under the ADA, only "qualified individuals" who can perform the essential functions of their jobs can sue, a definition that seemingly excludes former employees who are no longer in active service.

The lower courts sided with the city, dismissing the lawsuit on the grounds that the plaintiff, as a former employee, was not a “qualified individual” under the ADA’s employment provisions. However, there is a split among U.S. appellate courts on this issue, and the Supreme Court’s upcoming ruling could provide clarity on whether post-employment benefits fall under the ADA’s protection.

The Implications for Employers

If the Supreme Court rules in favor of the plaintiff, it could signal a major shift for employers that offer post-employment benefits. Such a ruling would open the door for former employees to sue for changes or reductions in those benefits under the ADA. According to attorney Ryan Bates, this could deter employers from offering post-employment benefits altogether, fearing potential lawsuits for routine adjustments made for legitimate reasons, such as budgetary constraints.

However, for employers who don’t offer post-employment benefits, the ruling may have minimal impact. The question is whether this legal development will discourage more organizations from implementing such programs, even though post-employment benefits can be a significant retention tool, particularly for employees with disabilities or long service histories.?

Lessons for HR Professionals

Regardless of how the Court rules, HR professionals must be prepared to manage the implications of the decision, especially if they oversee post-employment benefit plans. Here are several proactive steps HR departments can take:

• Audit and Review Post-Employment Benefit Policies

HR professionals should ensure their company’s post-employment benefit policies are not only compliant with current laws but also equitable across the workforce. If your company offers post-employment benefits, ensure there is no unintentional discriminatory impact on employees based on disability status. As Ellen Donovan McCann of Littler noted, post-employment benefits are often the first area to face budget cuts. However, organizations may need to approach these changes with greater care if the Court rules in favor of the plaintiff.

• Consult Legal Experts for Policy Changes

If your company is contemplating changes to post-employment benefits, it’s crucial to consult with legal counsel to understand the potential risks. Given the ambiguity in ADA interpretations regarding former employees, an attorney can provide guidance on whether proposed changes might raise red flags or create vulnerabilities for lawsuits.

• Educate Leadership and Key Stakeholders

Legal developments such as these can impact more than just the HR department. Ensuring that executives, benefits managers, and finance departments are aware of the potential ramifications of the Court’s ruling is vital. HR professionals should also advocate for practices that align with both the letter and spirit of the ADA. Protecting the rights of employees with disabilities, even post-employment, helps create a more inclusive workplace and enhances the company’s reputation.

How Might the Court Rule?

Legal experts remain divided on how the Supreme Court might rule. Jonathan Mook, an attorney specializing in ADA law, noted that the outcome is a “toss-up.” The city of Sanford argues that the ADA’s plain language—defining a "qualified individual" as someone who can perform the essential functions of the job—means that only current employees can bring claims. However, the plaintiff contends that her discrimination occurred while she was still employed, when the city changed its health insurance subsidy rules, which later impacted her when she retired on disability.

Some legal scholars, like Mike McClory, predict that the Court may reverse the lower court’s ruling but also limit the scope of future claims by requiring former employees to meet strict criteria for proving their cases. Such a ruling would mean that simply having standing to sue under the ADA wouldn’t guarantee a plaintiff’s victory; the case would still need to be adjudicated on its merits. This could deter speculative lawsuits while still offering protection for individuals like the plaintiff in this case.

?Why This Matters for Employers

A Supreme Court ruling in favor of the plaintiff could broaden the scope of ADA protections and encourage employees and former employees alike to pursue claims related to post-employment benefits. For employers, this adds another layer of complexity in managing benefits programs. At the same time, HR professionals should recognize that offering robust post-employment benefits is often a significant competitive advantage in recruitment and retention efforts. Rather than scaling back, employers may need to adapt their practices to ensure fairness and legal compliance.

Practical Advice for Employers

1. Stay Informed: As this case progresses, HR professionals must stay informed of the legal developments surrounding ADA post-employment benefit protections. This will ensure that you are prepared to update policies and practices if necessary.
2. Evaluate Long-Term Benefits Strategies: It may be time for a strategic review of your organization’s benefits policies, especially those that extend beyond employment. Evaluate the value these benefits bring in attracting and retaining top talent while considering the legal risks.
3. Ensure Consistency in Benefits: A ruling in favor of the plaintiff may require employers to examine how benefits are applied to different groups of employees. Consistency in post-employment benefits across all categories—whether based on disability status or years of service—could reduce exposure to discrimination claims.
4. Enhance Employee Communication: Clear communication about benefit changes is critical. If adjustments to post-employment benefits are necessary, ensure they are communicated in a transparent and timely manner, and provide employees with sufficient resources to understand the impact.

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As the U.S. Supreme Court prepares to decide whether former employees can sue under the ADA for post-employment benefits, HR professionals must be vigilant in managing this evolving area of employment law. Regardless of the outcome, organizations should take steps now to audit their policies, seek legal advice, and ensure compliance with ADA requirements.

At Axis HR Solutions, we specialize in helping businesses navigate complex HR compliance challenges, including ADA-related matters. Whether you need assistance with policy reviews, legal guidance, or ensuring fairness in benefits administration, our team of experts is here to help. Visit us at axishrky.com to learn more about how we can assist your organization in staying compliant and fostering an inclusive workplace.