Of General Interest
A Victory for Employees with Disabilities: SSDI Benefits Do Not Preclude Employment Discrimination Claims under the ADA*
*Background research for this article was made possible through a grant from Wayne State University Center for Legal Studies, Richard J. Barber Fund for Interdisciplinary Legal Research. I gratefully acknowledge the support of Robert F. Erlandson, Ph.D., my co-principal in the grant project, the tireless efforts of my previous research assistant, Daniel A. Gwinn, Esq., and the helpful comments made on earlier drafts of this article by Wayne State University Law School Professors John F. Dolan, John Freidl, and Frederica Lombard. I am also grateful for the feedback provided by my colleagues Christine Piatkowski, Esq. and John Brower, Esq.
The U.S. Supreme Court recently resolved a long-standing debate on whether an individual who pursues and receives Social Security Disability Insurance (SSDI) benefits should automatically be precluded from simultaneously pursuing an action for employment discrimination under the Americans with Disabilities Act (ADA). In a unanimous opinion, Cleveland v Policy Management Systems Corp, the Supreme Court held that application for, or receipt of, SSDI benefits does not "automatically estop" an aggrieved employee with a disability from seeking redress under the ADA.1 In so ruling, the Court resolved a split among the United States Circuit Court of Appeals that has existed for several years.2
FACTUAL AND PROCEDURAL BACKGROUND
The petitioner, Carolyn Cleveland, suffered a stroke in January 1994, while employed by the respondent Policy Management Systems Corporation. The stroke adversely affected her concentration, memory, and language skills. During the same month that she had the stroke, she filed an application for SSDI stating that she was "disabled" and "unable to work." She returned to work in April 1994, when her condition improved. In early July 1994, the Social Security Administration (SSA) denied her SSDI application on the basis of her return to work. A few days later, Policy Management Systems terminated Ms. Cleveland for poor job performance.3 She requested that the SSA reconsider her application, and ultimately received SSDI benefits in September 1995, retroactive to the day of her stroke.4
A week before the favorable SSA decision, Ms. Cleveland filed her ADA suit in the federal district court. The district court granted the employer’s motion for summary judgment, finding that Ms. Cleveland, by applying for and receiving SSDI benefits, had conceded total disability and, therefore, was estopped from proving that she could "perform the essential functions" of her job with "reasonable accommodation."5
The Fifth Circuit affirmed the summary judgment in favor of the employer, reasoning that when an individual applies for or receives SSDI benefits a "rebuttable presumption" is created that the individual is "judicially estopped" from asserting that she is a "qualified individual with a disability" under the ADA.6 The Supreme Court rejected the lower courts’ invocation of judicial estoppel and ruled in favor of the employee.
KEY PROVISIONS OF THE AMERICANS WITH DISABILITIES ACT AND SOCIAL SECURITY ACT
The ADA and the Social Security Act serve different purposes and employ different standards and procedures. The main objective of Social Security benefits is to protect individuals who become disabled from the consequence of total income loss, whereas the employment provisions of the ADA serve the dual purposes of providing qualified individuals with disabilities an equal opportunity to participate in the work force and preventing invidious discrimination by employers based on stereotypes, prejudice, or misconceptions regarding the capabilities of individuals with disabilities.
Through enactment of the ADA in 1990, Congress established "a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities" in all of its various forms.7 Congress specifically found that "historically, society has tended to isolate and segregate individuals with disabilities, and...discrimination against individuals with disabilities continue[s] to be a serious and pervasive social problem...in such critical areas as employment, housing, public accommodations, [and] education...."8
Congress recognized that individuals with disabilities are "severely disadvantaged socially, vocationally, economically, and educationally" and have been "subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond [their] control...."9
Congress intended to invoke the full "sweep" of its authority, including its "power to enforce the fourteenth amendment" equal protection clause, to "address the major areas of discrimination faced day-to-day by people with disabilities."10 As a remedial statute, Congress intended that the ADA be broadly construed in favor of individuals with disabilities.
To qualify as disabled under the Act, an individual must have:
(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) be [ ] regarded as having such an impairment.11
Major life activities include such activities as walking, speaking, seeing, hearing, learning, and working.12
The employment provisions contained in Title I of the ADA prohibit an employer with 15 or more employees from discriminating against a "qualified individual with a disability" in job applications, hiring, advancement, discharge, compensation, training, and "other terms, conditions and privileges of employment."13 The policy underlying these provisions is that individuals with disabilities should not be precluded from employment opportunities unless they are actually unable to do the job.14
An individual is considered a "qualified individual with a disability" for purposes of employment if the individual: (1) possesses the skills, experience, and educational background required by the job15 and (2) can perform the "essential functions" of the job "with or without reasonable accommodation."16
In the event that a qualified individual cannot perform the essential job functions without accommodation, the ADA imposes an obligation on the employer to make "reasonable accommodations."17
According to the statutory definition, "reasonable accommodation" may include making facilities "readily accessible" to individuals with disabilities, "job restructuring, part-time or modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices,...modifications of examinations, training materials, or policies, the provision of qualified readers or interpreters, and other similar accommodations for individuals with disabilities."18
An employer is required to make these accommodations unless the employer can demonstrate that the accommodation would impose an "undue hardship." The ADA defines "undue hardship" as any "action requiring significant difficulty or expense...."19 The factors considered in determining whether an accommodation would impose an undue hardship include the nature and cost of the accommodation, the financial resources of the employer, the number of employees, the size of the business, the nature of its operations, and the number, type, and location of its facilities.20
To qualify as "disabled" under the Social Security Act, the individual must be unable "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment" that can be expected to last a year or more or to result in death.21 A determination of disability will only be made if the impairment is so severe that the claimant is neither able to perform his "previous work" or to "engage in any other kind of substantial gainful work which exists in the national economy...."22 If the SSA determines that an individual is entitled to SSDI benefits, it does not necessarily follow, as a matter of statutory definition, that the individual is not a "qualified individual with a disability" under the ADA.
SUPREME COURT DECISION AND RATIONALE
In Cleveland, the Supreme Court vacated the Fifth Circuit opinion and remanded the case for further proceedings because it disagreed with the Court of Appeals’ assumption that claims under both the ADA and Social Security Act "would incorporate two directly conflicting propositions, namely ‘I am too disabled to work’ and ‘I am not too disabled to work.’"23 The Court reasoned that the seemingly inconsistent claims often are reconcilable:
In our view, however, despite the appearance of conflict that arises from the language of the two statutes, the two claims do not inherently conflict to the point where courts should apply a special negative presumption like the one applied by the Court of Appeals here. That is because there are too many situations in which an SSDI claim and an ADA claim can comfortably exist side by side.24
The Court set forth four separate rationales for its decision. First, the Court pointed out that when the SSA makes a disability determination, it does not take into account the possibility of a "reasonable accommodation." The Court noted that this may be because the SSA receives in excess of 2.5 million claims for disability benefits annually, has limited administrative resources, and the issue of "reasonable accommodation" involves a "detailed, and often fact-specific" inquiry. The Court recognized that "an ADA suit claiming that the plaintiff can perform her job with reasonable accommodation may well prove consistent with an SSDI claim that the plaintiff could not perform her own job (or other job) without it."25
The Court went on to point out that in order to facilitate efficient and expeditious processing of the large number of SSDI claims, the SSA applies "a five-step procedure that embodies a set of presumptions about disabilities, job availability, and their interrelation." The first step asks whether the individual is "presently working." If so, the applicant is ineligible. The next inquiry is whether the individual has a "‘severe impairment,’ i.e., one that ‘significantly limits’ the ability to do basic work activities." If not, the individual is ineligible.
Step three involves determining whether the impairment meets or equals an impairment contained in an SSA list. If so, then the applicant is automatically eligible. If not, step four asks whether the individual can perform "past relevant work." If so, then the individual is ineligible. The final step addresses whether an individual, who has a listed impairment and cannot perform past work, can nonetheless perform other jobs that exist in the national economy. If not, then the individual is eligible.26
The Court recognized that application of this five-step procedure, "inevitably simplif[ies]" and "eliminat[es] consideration of many differences potentially relevant to an individual’s ability to perform a particular job."27
As a third rationale, the Court noted that even the SSA, under some circumstances, grants SSDI benefits to individuals who are not only capable of working, but actually are working under a trial work period. The SSA trial work policy recognizes that the nature and extent of an individual’s disability may change over time. A trial work period permits a disabled individual to return to work when his or her condition improves without risking immediate reduction or termination of benefits.
As the Court indicated, because an individual’s condition may improve, the individual’s status at the time of application for SSDI benefits may not be an accurate reflection of the individual’s capabilities at the time of the adverse employment decision.28
Finally, the Court found that precluding a litigant who has applied for SSDI benefits from pursuing an ADA claim conflicts with the Federal Rule of Civil Procedure 8(e)(2). This rule permits alternative and inconsistent pleadings and assertion of "as many separate claims or defenses as the party has regardless of consistency." In the case of a plaintiff who has merely applied for SSDI benefits, the Court saw no reason why the plaintiff should not be able to assert SSDI and ADA claims.29
Although the Court specifically rejected application of any rebuttable or "special legal presumption," it acknowledged that "in some cases an earlier SSDI claim may turn out genuinely to conflict with an ADA claim." In those circumstances, summary judgment in favor of the employer may be justified if the plaintiff does not offer a "sufficient explanation."30 The Court explained:
When faced with a plaintiff’s previous sworn statement asserting ‘‘total disability’’ or the like, the court should require an explanation of any apparent inconsistency with the necessary elements of an ADA claim. To defeat summary judgment, that explanation must be sufficient to warrant a reasonable juror’s concluding that, assuming the truth of, or the plaintiff’s good faith belief in, the earlier statement, the plaintiff could nonetheless "perform the essential functions" of her job, with or without "reasonable accommodation." 31
Ms. Cleveland explained the discrepancy between her claim that she was "totally disabled" in the SSDI context and her claim in the ADA lawsuit that she could "perform the essential functions" of her job by pointing out that the effect of reasonable accommodations are not considered in the SSDI context, and the SSDI statements regarding disability were accurate when they were made. The Court remanded the case to permit the parties to present and contest these explanation in the trial court.32
In Cleveland, the Supreme Court reached a just and equitable conclusion. Before this decision, litigants who appeared in courts that applied a rebuttable presumption or judicial estoppel to prevent SSDI applicants and recipients from asserting their qualification as individuals with disabilities entitled to relief under the ADA were placed in the untenable position of having to choose between seeking SSDI benefits or vindicating their civil rights under the ADA. Barring a recipient of SSDI benefits from seeking redress under the ADA, when the statutory purposes and definitions differ, defeated not only the purpose and spirit of the ADA, but also gave employers a shield against liability that Congress never intended. Application of estoppel to foreclose an aggrieved disabled employee’s right to relief under the ADA undermined the broad remedial antidiscrimination policies of the Act.
An employee with a disability who has been discharged from his job has three options:
•If the employee believes that the discharge was impermissibly based on disability, he or she may sue for reinstatement, back pay, attorney fees and other remedies under the ADA or the state antihandicap discrimination statute
•Choose to search for another job
•Seek federal or state disability benefits or benefits through the employer’s disability insurance plan
As a practical matter, the discharged employee may need to pursue all three avenues simultaneously. As a prerequisite to filing suit under the ADA, an aggrieved employee must file a complaint with the Equal Employment Opportunity Commission (EEOC), which investigates the complaint.33 During this period of investigation, the employee must have some means of support. If the employer has refused to make an accommodation that would make it feasible to perform the job, or has refused to grant a leave of absence, the employee may have no choice other than taking advantage of available disability benefits.
Even if the employer offers a paid leave of absence, the leave period available is typically far less than six months. The Family and Medical Leave Act of 1993 mandates that employers with 50 or more employees permit eligible employees, who are unable to perform the essential job functions because of a serious health condition, to take a leave of absence.34 However, the Act only mandates a 12-week leave period, and does not require that the employer offer paid sick leave.35
Judicial estoppel, also known as the doctrine against the assertion of inconsistent positions, and sometimes referred to as the doctrine of conclusiveness of judgments and estoppel by oath, prevents a party who has made a factual assertion in a prior proceeding from asserting an inconsistent position in a subsequent proceeding.36 The courts fashioned the doctrine of judicial estoppel to address situations in which the traditional preclusion doctrines of res judicata, collateral estoppel, and equitable estoppel do not apply.37
Several sound reasons support the Supreme Court’s rejection of the doctrine of judicial estoppel in ADA cases. Application of judicial estoppel in ADA cases foreclosed access to the truth, prevented litigants from having a full and fair opportunity to litigate the merits of their cases, resulted in an undue hardship on individuals with disabilities, and was contrary to the legislative intent of the ADA.
The Cleveland Court recognized that application of judicial estoppel prevents full evaluation of ADA claims and denies disabled employees the opportunity to present evidence to establish that they could perform the essential functions of their jobs with reasonable accommodation. The numerous and complex issues surrounding reasonable accommodation cannot be explored if litigation of the ADA is severed by application of judicial estoppel.
In an application for SSDI benefits and at a Social Security administrative hearing, the claimant has no opportunity to raise complaints or present evidence regarding any discrimination by the employer or failure of the employer to provide reasonable accommodation. A disabled employee’s capacity to successfully return to work is substantially affected by the employer’s willingness to provide a reasonable accommodation.
The Cleveland Court gave credence to an exception to the application of judicial estoppel known as changed factual circumstances. The Court recognized that circumstances often change with respect to an individual’s disability. With proper medical treatment, a person who was once disabled may be able to resume employment. With the passage of time, the severity of the symptoms underlying the disability may subside, making it possible for the individual to return to work.
The Court’s decision protecting an individual’s right to pursue an ADA action is consistent with the SSA’s long-standing support for the work-incentive program. Application of judicial estoppel to bar claims for reinstatement under the ADA frustrated the SSA’s efforts to encourage beneficiaries, who are no longer totally disabled, to return to gainful employment and punished individuals who wished to return to work.
Two of the primary rationales for judicial estoppel are protecting the integrity of the judicial process and preserving the sanctity of the oath.38 The courts have expressed concern regarding the potential for abuse of the judicial system in a variety of ways: The doctrine is designed to prevent litigants from "playing fast and loose with the courts,"39 "making a mockery of justice,"40 "speaking out of both sides of the mouth,"41 or "deliberately shifting positions to suit the exigencies of the moment."42
The Cleveland Court addressed the concern underlying the judicial estoppel doctrine that truth not be undermined by the assertion of inconsistent positions by ruling that the plaintiff must provide a "sufficient explanation." Trial courts can admit into evidence any statements made by claimants in applications for disability benefits or at hearings and other proceedings regarding the applications for benefits. Such statements could be presented as admissions against interest made by a party to be weighed by the trier of fact.43
It is the function of the jury to weigh contradictory evidence and to resolve disputed issues of fact. Prior inconsistent statements are admissible as evidence, but are not conclusive and may be accorded little or great weight according to the particular circumstances.44 By treating a prior inconsistent statement as an admission, the party making the statement can testify to explain the statement or present evidence to rebut the prior assertion. The court can prevent double recovery by not permitting the plaintiff to recover back pay under the ADA for any period during which the plaintiff received SSDI benefits.
Application of judicial estoppel or a "special negative presumption" to preclude litigants who have applied for SSDI benefits from pursuing ADA claims hindered truth-seeking by preventing aggrieved employees with disabilities from establishing that they were discharged on the impermissible basis of disability. The ADA was enacted to eradicate discrimination in the workplace against individuals with disabilities. Application of judicial estoppel denied claimants a full and fair opportunity to litigate the merits of their case, prematurely aborted potentially meritorious cases, and gave employers a shield against liability that Congress never intended.
In addition, pretrial resolution of the ADA claim, based upon a prior administrative proceeding that did not afford the right to deliberation before a jury, interfered with the claimant’s Seventh Amendment right to a jury trial.45
Use of judicial estoppel to bar ADA actions resulted in great injustice to ADA claimants and conflicted with the purpose underlying the ADA of permitting individuals with disabilities to vindicate their civil rights. The Supreme Court correctly rejected the notion that application for, or receipt of, SSDI benefits creates a "special negative presumption" or bar per se to an ADA discrimination claim. The Court recognized that a claim for SSDI benefits and an ADA discrimination claim are not necessarily mutually exclusive, and it is possible for an individual to qualify for SSDI benefits and still satisfy the requirements of the ADA. Broad remedial antidiscrimination legislation should not be vitiated by application of a doctrine that prematurely precludes an ADA claimant from establishing a right to relief.
1Cleveland v Policy Management Systems Corp, 67 USLW 4375 (May 24, 1999).
2Compare, e.g., Kennedy v Applause, Inc, 3 AD Cases 1734 (CD Cal 1994) (ADA action barred because plaintiff certified on social security disability benefits application that she was disabled), aff’d on other grounds, 90 F3d 1477 (CA 9, 1996); Garcia-Paz v Swift Textiles, Inc, 873 F Supp 547 (D Kan 1995) (plaintiff was estopped from claiming she was a "qualified individual with a disability" under the ADA by virtue of her receipt of social security disabilities benefits); McNemar v Disney Store, Inc, 91 F3d 610, 618-20 (CA 3, 1996) (applying for disability benefits judicially estopped plaintiff from pursuing ADA action) with Smith v Dovenmuehle Mortgage Co, 859 F Supp 1138 (ND Ill 1994) (rejecting employer’s defense that the employee was judicially estopped from recovering under the ADA even though the employee was receiving disability benefits as part of a trial work period); Griffith v Wal-Mart Stores, Inc, 135 F3d 376, 382 (CA 6, 1998) (applying for disability benefits did not estop plaintiff from bringing ADA claim).
3Cleveland, 67 USLW at 4376; Cleveland, 120 F3d 513 (CA 5, 1997).
4Id. at 4376-77.
5Id. at 4377.
6Id., quoting the Fifth Circuit opinion, 120 F3d 513, 518-19 (CA 5, 1997).
742 USC 12101(b)(1).
842 USC 12101(a)(2), (3).
942 USC 12101(a)(6), (7).
1042 USC 12101(b)(4).
1142 USC 12102(2). A physical impairment is defined as "[a]ny physiological disorder, or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genito-urinary, hemic and lymphatic, skin, and endocrine." 29 CFR 1630.2(h)(1). A mental impairment is defined as "[a]ny mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities." 29 CFR 1630.2(h)(2).
1229 CFR 1630.2 (i).
1342 USC 12111(5)(A) and 12112(a).
14HR Rep No 101-485(II), 101st Cong, 2d Sess 31, reprinted in 1990 USCCAN 267, 454.
1529 CFR 1630.2(m).
1642 USC 12111(8).
1742 USC 12112(b)(5)(A) & (B).
1842 USC 12111(9)(A) & (B).
1942 USC 12111(10)(A).
2042 USC 12111(10)(B).
2142 USC 423(d)(1)(A).
2242 USC 423(d)(2)(A).
2367 USLW at 4377.
24Id. at 4377-78.
25Id. at 4378.
26Id., quoting from 20 CFR 404.1520-404.1526, 404.1560.
27Cleveland, 67 USLW at 4378.
31Id. at 4379.
3342 USC 12117(a); 42 USC 2000e-4-2000e-9.
3429 USC 2611(4) & 2612(d). A "serious health condition" is an "illness, injury, impairment, or physical or mental condition that involves—(A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider." 29 USC 2611(11).
3529 USC 2612(d)(2)(B).
36See Edwards v Aetna Life Insurance Co, 690 F2d 595, 598 (CA 6, 1982); Note, Judicial Estoppel—Beating the Shields into Swords and Back Again, 139 U Pa L Rev 1711 (1991).
37Note, Judicial Estoppel: The Refurbishing of a Judicial Shield, 55 Geo Wash L Rev 409, 410 (1987).
38Edwards, 690 F2d at 598; Allen v Zurich Ins Co, 667 F2d 1162, 1166 (CA 4, 1982); Konstantininidis v Chen, 626 F2d 933, 937 (DC Cir 1980).
39See e.g., Patriot Cinemas, Inc v General Cinema Corp, 834 F2d 208, 212 (CA 1, 1987); Allen, 667 F2d at 1166.
40Amer Nat’l Bank v FDIC, 710 F2d 1528, 1536 (CA 11, 1983).
41Kennedy, 3 AD Cases at 1739.
42Reigel, 859 F Supp 969, 970 (ED NC 1994); Dep’t of Transp v Coe, 112 Ill App 3d 506, 510, 445 NW2d 506, 508 (1983).
43FRE 801(d)(2). See August v Offices Unlimited, Inc, 981 F2d 576 (CA 1, 1992) (treating sworn statements on disability insurance claim forms as an admission).
44See Parkinson v Calif Co, 233 F2d 432, 438 (CA 10, 1956); Brown v Gernstein, 17 Mass App Ct 558, 569 n 19, 406 NE2d 1043,1051 n 19 (1984).
45Cf. Parklane Hosiery v Shore, 439 US 322, 351 (179) (Rehnquist, J, dissenting) (use of collateral estoppel to bar a subsequent lawsuit contravenes the Seventh Amendment and ‘‘strong federal policy’’ favoring jury trials when the party previously had no opportunity to have the facts adjudicated by a jury).