EEOC v. UAL

In the United States Court of Appeals For the Seventh Circuit No. 11-1774 E QUAL E MPLOYMENT O PPORTUNITY C OMMISSION, Plaintiff-Appellant, v. U NITED A IRLINES, INC., Defendant-Appellee. Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 10-cv-01699—Harry D. Leinenweber, Judge. A RGUED O CTOBER 20, 2011—D ECIDED S EPTEMBER 7, 2012 Before C UDAHY, K ANNE, and SYKES, Circuit Judges. C UDAHY , Circuit Judge. First, the procedural posture of this case requires brief discussion. An earlier version of this opinion suggested that rehearing en banc was warranted for the full court to consider overruling EEOC v. Humiston-Keeling, 227 F.3d 1024 (7th Cir. 2000), in light of U.S. Airways, Inc. v. Barnett, 535 U.S. 391 (2002). The EEOC then petitioned for rehearing en banc, and United Airlines, Inc. filed a response. Thereafter, every member 2 No. 11-1774 of the court in active service approved overruling Humiston-Keeling and it was suggested that the panel use Circuit Rule 40(e) for that purpose. However, the usual formal en banc procedure involving argument to the full court was not pursued. We vacate the original panel opinion and now issue this opinion overruling Humiston-Keeling. We have circulated the new panel opinion to the full court under Rule 40(e), and no member of the court has asked to rehear the case en banc. With that procedural explanation, we now proceed to the merits. In this case, the Equal Employment Opportunity Com- mission (EEOC) asks this court to change its interpreta- tion of the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. (ADA). The case turns on the meaning of the word “reassignment.” The ADA includes “reas- signment to a vacant position” as a possible “reasonable accommodation” for disabled employees. 42 U.S.C. § 12111(9). The EEOC contends that “reassignment” under the ADA requires employers to appoint employees who are losing their current positions due to disability to a vacant position for which they are qualified. However, this court has already held in Humiston-Keeling, 227 F.3d at 1029, that the ADA has no such requirement. The EEOC argues that the Supreme Court’s ruling in Barnett, 535 U.S. at 391, undermines Humiston-Keeling. Several courts in this circuit have relied on Humiston-Keeling in post-Barnett opinions, though it appears that these courts did not conduct a detailed analysis of Humiston- Keeling’s continued vitality. The present case offers us the opportunity to correct this continuing error in our No. 11-1774 3 jurisprudence. While we understand that this may be a close question, we now make clear that Humiston- Keeling did not survive Barnett. We reverse and hold that the ADA does indeed mandate that an employer appoint employees with disabilities to vacant positions for which they are qualified, provided that such accom- modations would be ordinarily reasonable and would not present an undue hardship to that employer. We remand with instructions that the district court determine if mandatory reassignment would be rea- sonable in the run of cases and if there are fact-specific considerations particular to United’s employment system that would render mandatory reassignment unreasonable in this case. In 2003, United Airlines set out Reasonable Accom- modation Guidelines that address accommodating em- ployees who, because of disability, can no longer do the essential functions of their current jobs even with rea- sonable accommodation. While the guidelines note that “transfer . . . [to] an equivalent or lower-level vacant position” may be a reasonable accommodation, the guide- lines specify that the transfer process is competitive. Accordingly, employees needing accommodation will not be automatically placed into vacant positions but instead will be given preferential treatment. This allows employees needing accommodation to submit an unlim- ited number of transfer applications, be guaranteed an interview and receive priority consideration over a simi- larly qualified applicant—that is, if two candidates are equally qualified, the employee-applicant seeking accommodation will get the job. 4 No. 11-1774 The EEOC filed suit in San Francisco, alleging that United’s policy violates the ADA. The district court granted United’s motion to transfer the case to Illinois. That district court granted United’s motion to dismiss the suit under Rule 12(b)(6). The court noted that binding precedent, Humiston-Keeling, 227 F.3d at 1028-29, held that a competitive transfer policy does not violate the ADA. The court also rejected the EEOC’s contention that the Supreme Court’s decision in Barnett undermined Humiston-Keeling. We review a dismissal under Rule 12(b)(6) de novo. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). A complaint must provide “sufficient factual matter, ac- cepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This court construes the complaint “in the light most favorable to the plaintiff, accepting as true all well- pleaded facts alleged, and drawing all possible inferences in [the EEOC’s] favor.” Tamayo, 526 F.3d at 1081 (citing Killingsworth v. HSBC Bank Nev., 507 F.3d 614, 618 (7th Cir. 2007)). We have jurisdiction to hear EEOC’s appeal under 28 U.S.C. § 1291. The district court noted that Humiston-Keeling is directly on point and has not been overruled by the Seventh Circuit. The district court is correct on both points. Humiston-Keeling involved a worker, Houser, who could no longer perform her conveyor job due to an injured arm. 227 F.3d at 1026. After taking a temporary greeter position, Houser applied for vacant clerical positions No. 11-1774 5 within the company but did not get any of these jobs. Id. The EEOC brought suit, arguing the “reassignment form of reasonable accommodation . . . require[s] that the disabled person be advanced over a more qualified nondisabled person, provided only that the disabled person is at least minimally qualified to do the job, unless the employer can show undue hardship.” Id. at 1027 (internal quotation marks omitted). This court rejected that assertion, holding the “ADA does not require an employer to reassign a disabled employee to a job for which there is a better applicant, provided it’s the employer’s consistent and honest policy to hire the best applicant for the particular job in question.” Id. at 1029. The EEOC invites this court to overturn Humiston- Keeling, arguing that Barnett undercuts the reasoning of Humiston-Keeling. In Barnett, the Supreme Court consid- ered reassignment under the ADA in the context of a seniority system. 535 U.S. at 393-95. Robert Barnett injured his back while working as a cargo-handler for U.S. Airways. Id. at 394. He invoked seniority, not his disability status, and transferred to a mailroom position. Id. Later, at least two employees senior to Barnett intended to bid for the mailroom position. Id. Barnett argued he should be allowed to keep this position and claimed his reassignment was a reasonable accom- modation mandated by the ADA because he was an individual with a disability capable of performing the essential functions of the mailroom job. Id. at 394-95. The Supreme Court first noted that “[t]he simple fact that an accommodation would provide a ‘preference’—in 6 No. 11-1774 the sense that it would permit the worker with a disability to violate a rule that others must obey—cannot, in and of itself, automatically show that the accommodation is not ‘reasonable.’ ” Id. at 398 (emphasis in original). Instead, the Court outlined a two-step, case-specific approach. The “plaintiff/employee . . . need only show that an ‘accommodation’ seems reasonable on its face, i.e., ordinarily or in the run of cases.” Id. at 401. Once the plaintiff has shown he seeks a reasonable method of accommodation, the burden shifts to the defen- dant/employer to “show special (typically case-specific) circumstances that demonstrate undue hardship in the particular circumstances.” Id. at 402. 1 While Barnett’s 1 A helpful summary of the Barnett framework is provided in Shapiro v. Township of Lakewood, 292 F.3d 356, 361 (3d Cir. 2002): It therefore appears that the Court has prescribed the following two-step approach for cases in which a re- quested accommodation in the form of a job reassignment is claimed to violate a disability-neutral rule of the em- ployer. The first step requires the employee to show that the accommodation is a type that is reasonable in the run of cases. The second step varies depending on the out- come of the first step. If the accommodation is shown to be a type of accommodation that is reasonable in the run of cases, the burden shifts to the employer to show that granting the accommodation would impose an undue hardship under the particular circumstances of the case. On the other hand, if the accommodation is not shown to be a type of accommodation that is reasonable in the run of cases, the employee can still prevail by showing that (continued...) No. 11-1774 7 request for assignment to the mailroom was a “reasonable accommodation” within the meaning of the statute, the violation of a seniority system “would not be reasonable in the run of cases.” Id. at 403. An “employer’s showing of violation of the rules of a seniority system is by itself ordinarily sufficient” to demonstrate that the accom- modation sought is unreasonable. Id. at 405. However, the Court was careful to point out that it was not creating a per se exception for seniority systems, since “[t]he plaintiff . . . nonetheless remains free to show that special circumstances warrant a finding that, despite the presence of a seniority system (which the ADA may not trump in the run of cases), the requested ‘accommoda- tion’ is ‘reasonable’ on the particular facts.” Id. The EEOC points out that U.S. Airways relied heavily on Humiston-Keeling and, more importantly, that the Barnett Court flatly contradicted much of the language of Humiston-Keeling. U.S. Airways argued that it was not required to grant a requested accommodation that would violate a disability-neutral rule, using the argu- ment from Humiston-Keeling that the ADA is “not a man- datory preference act” but only a “nondiscrimination statute.” 227 F.3d at 1028. The Barnett Court rejected this anti-preference interpretation of the ADA, noting that this argument “fails to recognize what the Act speci- (...continued) special circumstances warrant a finding that the accom- modation is reasonable under the particular circumstances of the case. 8 No. 11-1774 fies, namely, that preferences will sometimes prove necessary to achieve the Act’s basic equal opportunity goal.” 535 U.S. at 397. Merely following a “neutral rule” did not allow U.S. Airways to claim an “automatic ex- emption” from the accommodation requirement of the Act. Id. at 398. Instead, U.S. Airways prevailed because its situation satisfied a much narrower, fact-specific exception based on the hardship that could be imposed on an employer utilizing a seniority system. Id. at 405. The analysis of Barnett’s impact on Humiston-Keeling is further complicated by the fact that we are not the first panel to consider this issue. This court considered Barnett’s relationship to Humiston-Keeling, albeit in an abbreviated fashion and without the benefit of briefing, in Mays v. Principi, 301 F.3d 866 (7th Cir. 2002). In Mays, this court relied on Humiston-Keeling in finding that an employer did not violate the duty of reasonable ac- commodation in the Rehabilitation Act of 1973, 29 U.S.C. §§ 701 et seq., by giving an administrative nursing position to a better qualified applicant, rather than to a disabled employee needing reassignment.2 Mays, 301 F.3d at 871-72. The Mays Court interpreted the recently handed down Barnett decision actually to bolster Humiston-Keeling by equating seniority systems with any other normal method of filling vacancies. Id. at 872. [Barnett] holds that an employer is not required to give a disabled employee superseniority to enable 2 Instead, the employer placed the disabled employee in a clerical position. No. 11-1774 9 him to retain his job when a more senior employee invokes an entitlement to it conferred by the em- ployer’s seniority system. If for “more senior” we read “better qualified,” for “seniority system” we read “the employer’s normal method of filling vacancies,” and for “superseniority” we read “a break,” U.S. Airways becomes our case. Id. at 872 (internal citation omitted). The EEOC argues, and we agree, that the Mays Court incorrectly asserted that a best-qualified selection policy is essentially the same as a seniority system. In equating the two, the Mays Court so enlarged the narrow, fact- specific exception set out in Barnett as to swallow the rule. While employers may prefer to hire the best qualified applicant, the violation of a best-qualified selection policy does not involve the property-rights and administrative concerns (and resulting burdens) presented by the violation of a seniority policy. To strengthen this critique, the EEOC points out the relative rarity of seniority systems and the distinct chal- lenges of mandating reassignment in a system where employees are already entitled to particular positions based on years of employment. The Supreme Court has found that accommodation through appointment to a vacant position is reasonable. Absent a showing of undue hardship, an employer must implement such a reassignment policy. The Mays Court understandably erred in suggesting that devia- tion from a best-qualified selection policy always repre- sented such a hardship. 10 No. 11-1774 In any event, the Barnett framework does not contain categorical exceptions. On remand, the district court must conduct the Barnett analysis. In this case, the district court must first consider (under Barnett step one) if mandatory reassignment is ordinarily, in the run of cases, a reasonable accommodation.3 Assuming that the district court finds that mandatory reassignment is ordinarily reasonable, the district must then deter- mine (under Barnett step two) if there are fact-specific considerations particular to United’s employment system that would create an undue hardship and render manda- tory reassignment unreasonable. For its part, United argues that this court should not abandon Humiston-Keeling, in part because the Eighth Circuit explicitly adopted the reasoning of Humiston- Keeling in Huber v. Wal-Mart, 486 F.3d 480, 483-84 (8th Cir. 2007), reh’g en banc denied, 493 F.3d 1002 (8th Cir. 2007), 3 We do not believe this step will cause the district court any great difficulty. This is the very accommodation analyzed in Barnett. There, the Supreme Court “assume[d] that normally such a request would be reasonable within the meaning of the statute, were it not for one circumstance, namely, that the assignment would violate the rules of a seniority system.” 535 U.S. at 403. There is no seniority system at issue here. How- ever, we suppose it is possible there is some comparable circumstance of which we are unaware. We note for complete- ness that if mandatory reassignment is not ordinarily a rea- sonable accommodation, the EEOC can still prevail if it shows that special factors make mandatory reassignment reasonable in this case. No. 11-1774 11 cert. granted in part, 552 U.S. 1074 (2007), cert. dismissed, 552 U.S. 1136 (2008). The Eighth Circuit’s wholesale adoption of Humiston-Keeling has little import. The opin- ion adopts Humiston-Keeling without analysis, much less an analysis of Humiston-Keeling in the context of Barnett.4 Two of our sister Circuits have already deter- mined that the ADA requires employers to appoint disabled employees to vacant positions, provided that such accommodations would not create an undue hard- ship (or run afoul of a collective bargaining agreement): the Tenth in Smith v. Midland Brake, Inc., 180 F.3d 1154 (10th Cir. 1999) (en banc) and the D.C. in Aka v. Washington Hospital Center, 156 F.3d 1284 (D.C. Cir. 1998) (en banc). We feel that in light of Barnett, pursuant to Circuit Rule 40(e) as suggested under the procedure described above, we must adopt a similar approach. For the foregoing reasons, the judgment of the district court is R EVERSED and we R EMAND this matter to the district court for further consideration consistent with this opinion. 4 It is also worth noting that the Supreme Court granted certiorari in Huber, but the parties settled and the Supreme Court dismissed the case. 552 U.S. 1136 (2008). 9-7-12