Jottings By An Employer's Lawyer

Tuesday, December 02, 2003

First Supreme Court Employment Law Decision of the Term Is A Punt

Raytheon v. Hernandez (U.S. 12/2/03) raised the interesting question of whether or not an employer's no rehire for misconduct rule violated the ADA when applied to a former employee who was terminated for testing positive on a drug test. The answer is .... maybe, but we don't know yet because the 9th Circuit applied the wrong test. Instead of treating the case as a disparate impact case it applied the McDonnell-Douglas analysis used in cases of disparate treatment. The result, kick it back without reaching the question on which certiorari was granted.

Maybe it will come back for a second shot after the 9th Circuit revises its opinion, but I would be somewhat surprised. If I am correct, that is probably bad news for the company.

Update 12/3/03: After seeing a number of headlines today saying in effect, company wins, for example the Daily News Tribune and the Boston Globe , I thought I better re-read the opinion and my comments. It is true that the company won yesterday in the sense that the employer was going to trial as a result of the 9th Circuit decision, and now they are at least going back to the 9th Circuit, and maybe even back to the district court on the issue of their summary judgment. And absent some real reaching to find some other evidence that there was an intention to discriminate because of the prior drug use (which may be difficult since there was some indication that the person applying the rule was not aware that the reason he was terminated initially was for failing the drug test) the company might prevail, even in the 9th Circuit on that issue.

Where it could lose, and certainly where it seems the bigger question that was dodged by the Supreme Court is -- does such a rule have a disparate impact on individuals with disabilities, and if so, is such a rule justified by business necessity. The Supreme Court without much analysis seemed to say that the disparate impact theory is available in an ADA case which means that the next challenge to such a rule will come under that theory. The old "rule of the case" doctrine may preclude Hernandez himself from getting a bite at that apple. However, it is likely that some other company with such a policy, who may feel much better about it today because of some of the headlines referred to above, may find that they have just picked up the laboring oar of proving that it does not disproportionately impact those with disabilities and/or that it is justified by business necessity. While the Boston Globe article discounts that as only a theoretical possibility, not likely to succeed, a statement from the National Council on Disability calls it a 'partial victory' for those with disabilities. I think I was right - it was mostly a punt, but from Raytheon's perspective, it was probably a good one that may have pinned down the other side near their own goal line.


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