Employers, of course, are required by the Americans with Disabilities Act (ADA) to make reasonable accommodations for applicants and employees with disabilities. This means employers must engage in an interactive process with the employee to explore possible reasonable accommodations. Considerations in this interactive process include, among others, the impact of the accommodation on the performance of the employee’s essential functions, including meeting generally applicable productivity standards, and the effect on other employees.
While seldom a primary consideration, costs of any proposed accommodation have been a factor to be considered in the overall individualized inquiry required by the ADA.
Two recent court decisions, however, call into question whether employers realistically can continue to consider the cost of a proposed accommodation in determining whether it is a reasonable accommodation or an undue hardship.
Among other factors to consider in addressing whether or not a proposed accommodation is really a business hardship are the following:
- Its nature and cost
- Financial resources of the facility providing the accommodation, as well as of the covered entity as a whole
- Number of employees at the facility, as well as at the covered entity
- Effect on expenses and resources, or other impacts on the facility’s operation
- Number, type, and location of entity’s facilities
- Type of operation or operations of the covered entity, including the composition, structure, and functions of its workforce
- The geographic separateness and the administrative or fiscal relationship of the facility in question to the covered entity as a whole
Reyazuddin v. Montgomery County
The first was Reyazuddin v. Montgomery County, Maryland. The County built a new call center with technology that was not accessible to a blind Information and Referral Aide. Instead of moving the aide to the new call center, the County reassigned her to “comparable employment” of four to five hours a day that she claimed was “make work.”
When the employee brought suit under the ADA, the County argued that the cost of making the new call center accessible to the visually impaired aide was too great and exceeded the entire year’s reasonable accommodation budget many times over. The employee’s expert estimated the cost of making the technology accessible was $129,600, which estimate the district court discredited.
The estimate of the Hospital’s expert was $648,000. The district court awarded judgment to the County finding undue hardship, as the accommodation’s cost grossly exceeded the County’s small reasonable accommodation budget. The Fourth Circuit Court of Appeals reversed the decision. It found that the proper comparison was to the County’s overall budget, which approached $4 billion.
Such a comparison created a very difficult, if not impossible, situation for the County to prevail. This was illustrated by the fact that after the appellate court reinstated Reyazuddin’s claims, a jury rejected the claim that making the call center accessible would be an undue hardship for the County.
Hospitality employers should be very cautious about refusing a proposed accommodation as an undue hardship based solely on cost.
Searls v. Johns Hopkins Hospital
The problem for employers was compounded in Searls v. Johns Hopkins Hospital. In that case, a deaf nurse sued under the ADA when her job offer was withdrawn after she requested an American Sign Language (“ASL”) interpreter. The employer did so because the cost of the ASL interpreter was projected by the Hospital at $120,000 annually―equating or exceeding the cost of the nurse. Nor, of course, would this be a one-time expense. It would continue so long as the nurse was employed.
The court rejected the employer’s focus on the budgets of the department and unit into which the employee was hired. Instead, the court compared the cost of the ASL interpreter to the hospital’s overall operational budget and found that it was but .007 percent of the employer’s $1.7 billion operational budget.
No employer, of course, compares a proposed expense to its overall profits, let alone its operational budget. In the real world, such a comparison makes absolutely no sense when employers must exercise reasonable cost control to remain economically viable.
Employers assess budgeting issues at the business unit level. It is impossible to do a proper assessment without disaggregating expenses and linking costs to the unit or department to which they relate. Nor is there any reason to believe that Congress, when initially enacting the ADA, intended to have the courts artificially focus solely on a business’s overall operations budget to assess whether an accommodation is an undue hardship or is reasonable.
Implications for the hospitality industry
These cases create a real quandary for hospitality employers. For example, if a maintenance or housekeeping staff employee requests a $130,000 piece of equipment as an accommodation to permit him or her to perform the essential functions of the job, unless the employer can provide a different or less costly reasonable accommodation, it may be necessary to consider even such an extreme expenditure.
Similarly, a situation a hospitality employer could potentially confront would be an accommodation request by a hearing impaired front desk employee who seeks to have an ASL interpreter to translate in front desk guest interactions. The Searls and Reyazuddin courts would seem to require such expenditures, absent a showing that the expenditure would create an extreme undue hardship for the hospitality employer.
For the moment, these two cases are only controlling in Maryland, North Carolina, South Carolina, Virginia, and West Virginia. But based on the statements of Equal Employment Opportunity Commission (EEOC) officials, EEOC appears to share the same views in its national enforcement of the ADA. Other courts may adopt this approach when presented with facts where a proposed accommodation has been rejected by the employer as too costly.
There is no reason to believe that Congress, when initially enacting the ADA, intended to have the courts artificially focus solely on a business’s overall operations budget to assess whether an accommodation is an undue hardship or is reasonable.
The upshot is that hospitality employers should be very cautious about refusing a proposed accommodation as an undue hardship based solely on cost, at least absent a showing of truly extreme harm to the business from the expense. Employers should focus on any non-cost reasons that make a proposed accommodation not reasonable. They should also keep in mind that an employer has the right to select and provide a different and less costly accommodation so long as it is in fact a reasonable accommodation that enables the employee to perform the essential functions of her job. Hospitality employers should also monitor future court decisions addressing the cost of a proposed accommodation as an undue hardship.
ABOUT THE AUTHOR
Frank C. Morris, Jr., is a Member of Epstein Becker Green in the Litigation and Employee Benefits practices, heads the Employment, Labor & Workforce Management practice in the Washington, DC, office, and co-chairs the firm’s ADA and Public Accommodations Group. Mr. Morris was selected by his peers for inclusion in The Best Lawyers in America (2013 to 2017) in the field of Employment Law—Management and named to the Washington, DC, Super Lawyers list (2007, 2009 to 2017) in the areas of Employment & Labor, Employee Benefits, and Appellate. He was also recommended in the Labor and Employment Disputes (Including Collective Actions): Defense category by The Legal 500 United States (2014, 2016, 2017).
ABOUT THE FIRM
Epstein Becker & Green P.C. is a national law firm with a primary focus on employment, labor, and workforce management. Founded in 1973 as an industry-focused firm, Epstein Becker Green has decades of experience serving clients in hospitality, financial services, retail, and technology, among other industries. For more information, visit www.ebglaw.com.