ADA Ruling Seen Positive For EPL Insurers

A U.S. Supreme Court ruling on the Americans with DisabilitiesAct in January is viewed as a triumph by insurers andemployers.

Although they are happy to see the scales tip in their favor,some experts say their chief concern has been claims for racial andsexual harassment.

The ruling in Toyota Motor v. Williams, whichestablishes that an impairment must be long term and mustsubstantially limit the performance of major activities importantto daily life, is part of a series of cases that have graduallyshaped the law, said Michael Maloney, assistant vice president andEPL product manager for Chubb & Sons in Simsbury, Conn.

Although Chubbs book of business is mostly driven by race andgender discrimination claims, Mr. Maloney said: “If there are acouple of favorable rulings here and there on the Supreme Courtside that will make it a little more challenging to make disabilityallegations, I think that will be great for us.”

He continued that, “I don't think [the ruling] will have a hugeimpact. We don't think that Congress intended the ADA to beincredibly broad. If you step back and look at the [EqualEmployment Opportunity Commissions] own data, just under 20 percentare disability allegations.”

Mr. Maloney said the new ruling does, however, clarify whatconstitutes a disability. “If your injury relates to something youdo at work and it only hurts you while you're trying to do theseone or two things at work, then that's not a disability. It's gotto impact the way you manage your whole life.”

He said that disability cases will continue to make their waythrough the courts, which in turn will define their scope. “At somepoint, disability advocates will go back to Congress and lobby toexpand the law,” he said.

Gerald Maatman, chair of Baker & McKenzie's employment lawpractice group located in Chicago, said the Supreme Courts rulingis seen as a victory for employers because “the test is a broadtest and more employers will win under this new test.”

The ruling is defense minded, Mr. Maatman explained, because it“raised the bar” and made it “a little more difficult” for a workerto demonstrate a disability.

The law, signed in 1990 and passed in 1992, applies to anyworkplace with 15 or more employees, Mr. Maatman said. “Unlikeother employment discrimination laws, which are based on race orsex, the ADA is different,” he said, because it states that, inparticular circumstances, the employer might have to do somethingaffirmative, called the “duty of reasonable accommodation,” toenable the employee to compete in the workplace.

While risk managers or personnel decision makers can fairlyeasily determine who is covered by discrimination laws that arebased on race and gender, its more difficult to determine who isprotected under ADA because some disabilities are not visible, hesaid.

“That is what was at issue in the Toyota Motor v.Williams case,” he explained. “Was the person who brought thelawsuit covered by the law? Were they disabled? And if so, did theemployer have a duty to provide a reasonable accommodation tochange the work environment?”

The Toyota Motor v. Williams case involved EllaWilliams, a Toyota factory worker, who said she had impairmentswhich limited her ability to perform some tasks on an assemblyline. She asked the company to make allowances for her condition bylimiting her tasks on the assembly line (See NU, Jan. 14,2002, page 6.)

Ms. Williams said Toyota refused her request, while Toyota saidshe began missing work and was terminated for poor attendance.

The case was important, Mr. Maatman said, because the allegeddisability was carpal tunnel syndrome, “something you may not see,but something that affects many people throughout the UnitedStates, especially in the new digital workplace,” where many peopletype on keyboards.

“What Williams teaches us, if we are personnelmanagers, executives or risk managers,” he explained, is the“proper way now in which to interact with and deal with theseworkplace situations when people say they need reasonableaccommodation. It's a case that ought to be required reading foranybody in the workplace who deals with risk or makes personneldecisions.”

He went on to say that “it is expensive to defend disabilitydiscrimination lawsuits.” Employers and risk managers, “if theyredoing their jobs, are trying to keep their companies out of thecourthouse to avoid lawsuits.”

Rich Robin, executive vice president with NAS Insurance Servicesin Encino, Calif., an underwriting manager with full bindingauthority for underwriters at Lloyds, said his organization hasbeen underwriting employment practices liability insurance in theUnited States since the mid-1980s.

“Whether or not someone is disabled in the definition of the lawisnt necessarily going to be what limits the claim,” Mr. Robinsaid. “Its going to be the way the company manages the complaint.If they have the right systems in place, they should be a betterrisk. If not, they wont,” he said.

Mr. Robins, whose firm places a lot of business in California,said that the new ruling doesnt give much protection to Californiaemployers because “California law is broader, more in favor of theemployee.”

“Also, you cant spin on a dime with everything that comes out.So were not really changing our underwriting as a result ofthis.”

He expects that the Supreme Court ruling won't have a largeimpact on his company, whose clients are mostly smaller businessesof under 100 employees. “Larger companies might see a differentimpact,” he surmised. “Also, HR departments will have a differentperspective. Smaller companies dont have risk management programsthat are as developed as larger companies.”

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, February 25, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

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