Terminating Employees With Disabling Medical Conditions

Terminating an employee with a disabling medical condition can be a lightening rod for litigation.  However, that does not mean that all such terminations–or even the majority–are unlawful.  To the contrary, private-sector employment in the state of California is by default “at will,” meaning terminable at any time for any reason not expressly prohibited by law, and employers enjoy vast discretion with regard to staffing decisions.

Two primary legislative acts protect employees with disabling medical conditions, notwithstanding the doctrine of at-will employment.  These are California’s Fair Employment & Housing Act and the federal Americans With Disabilities Act.  FEHA protections apply to employees working at companies with 5 or more employees and ADA protections apply to employees working at companies with 15 or more employees.  Because FEHA and the ADA both protect “disabled” employees in the same ways but FEHA offers greater protection, FEHA will be the focus of this brief article.

FEHA applies to any employee, regardless of the duration of their employment, who is suffering from a health condition which qualifies as a “disability.”   The definition of “disability” under FEHA is broad (indeed broader than the ADA’s), and includes any physical or mental impairment which “limits a major life activity.” (Gov. Code § 12926(i)(1).)  FEHA expressly includes “working” as a major life activity. (See Gov. Code §§ 12926(i)(1)(C); 12926(k)(1)(B)(iii).)  FEHA not only protects covered employees from discrimination, it also requires employers to “reasonably accommodate” disabling conditions and to engage in a good-faith “interactive process” to find ways to keep the employee working.

How can an employer terminate a disabled employee in a manner that mitigates the chances of a lawsuit?  First, if the termination is for reasons entirely unrelated to the disability, the employer should make sure they have strong documentation of that fact.  This means if the termination is for performance issues unrelated to the employee’s disabling condition (e.g. attitude problems, theft, etc.) that write-ups and other forms of documented warnings have been issued.  If the termination is for economic reasons (e.g. a layoff), an employer will want to make sure there is adequate justification for elimination of the disabled employee’s position, especially if they are the only employee being let go.

If termination is for disability-related absence from work or for performance issues related to the employee’s disability, things become much more complicated, and a comprehensive overview of the protocol in such circumstances far exceeds the scope of this limitation publication.  The most important steps, however, are to engage in an interactive dialogue to determine whether the employee’s disability can be accommodated (e.g. through an extended absence or modified job duties), and to establish in documentable form that either no accommodations are possible or that the requested accommodations will impose “undue hardship” on the company.  Much case law has focused on what qualifies as fulfillment of these legal obligations, and analysis of any particular circumstance is incredibly fact-specific.

Any employer considering termination of a disabled employee, especially if for reasons that potentially implicate the employee’s disability itself, should consult with an employment law attorney to ensure they are covering all their legal bases.  Such a precautionary measure is far less expensive than litigation defense and well worth the piece of mind it will provide.