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On September 28, 2011, an Illinois federal district court dismissed the putative class action claims brought by U.S. Equal Employment Opportunity Commission (EEOC) against United Parcel Service Inc. (UPS) in a case where the EEOC alleged that UPS’s 12 month medical leave policy violated the Americans With Disabilities Act by not providing reasonable accommodations to disabled employees.  (EEOC v. United Parcel Service Inc., N.D. Ill, No. 1:09-cv-05291.)

Along with the two named individuals, the EEOC sought to represent a class of unidentified individuals who allegedly were disabled under the ADA and purportedly had been subjected to UPS’s medical leave policy, which the EEOC claimed violated the ADA by failing to provide leaves of absence longer than 12 months.  The court had already dismissed the EEOC’s original complaint in September 2010, noting that the class allegations in the complaint were “so threadbare, conclusory and formulaic that it does not even allow the court to reasonably infer” that the proposed class members had any basis for the claim.  The EEOC filed an amended complaint that same month, again alleging generally that each unidentified class member was disabled and could perform the essential functions of his or her job with or without reasonable accommodation, but for the application of UPS’s allegedly “inflexible” medical leave policy.  UPS promptly filed another motion to dismiss, arguing that the amended complaint still failed to plead sufficient facts to support its allegations.

The court agreed, finding that the EEOC’s amended complaint used the same “conclusory, formulaic language” with respect to purported class members that was rejected by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  The court noted that the amended complaint failed to allege “specific facts regarding what the unidentified class members’ disabilities are, the conditions of their termination or leave, or what accommodations would have been suitable for them to return to work.”  Citing EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 777 (7th Cir. 2007), the court explained that the complaint “must provide some specific description of [the protected conduct] beyond the mere fact that it is protected,” and that the allegations must “specifically indicate that the plaintiff is qualified to perform the essential functions of the job with or without reasonable accommodation.”  Although the EEOC argued that its allegations satisfied Twombly because the amended complaint put UPS  on notice of its claims against the company, it supported its argument with cases alleging violations of Title VII of the 1964 Civil Rights Act rather than ADA cases.  The court noted that pleading standards for  alleged Title VII violations (such as sex or race discrimination) were different from those involving alleged ADA violations, which must provide adequate detail of an employee’s qualifications to perform the essential functions of his or her job.

The EEOC also argued that identifying all class members before filing a claim might cause employers to stonewall investigations.  The court rejected this argument, pointing out the “considerable gulf between stating a plausible claim with sufficient detail to provide fair notice and identifying every single potential class member.”  The court also emphasized the EEOC’s obligation to investigate and conciliate claims before suing.  Specifically with respect to the EEOC’s “stonewalling” argument, the court pointed out that the agency also has subpoena power, which “provides a strong antidote to the EEOC’s professed concerns about concealment of relevant information.” Considering the EEOC’s powers and duties, the court noted that the “EEOC both can and should do better in presenting its class allegations so that they set forth in more detail the factual basis for their ADA claims.”

As to the EEOC’s additional argument that it did not have to identify each class member individually because it is exempt from following the requirements for class certification of FRCP Rule 23, the court found that the “EEOC  is not exempt from the standard pleading requirements” of Rule 8 of the Federal Rules of Civil Procedure and the EEOC failed to cite any authority to suggest otherwise.

The court’s decision permits the EEOC to pursue the detailed claims it asserted on behalf of the two named individuals, and gives the EEOC “one final opportunity” to file within 21 days a motion for leave to file a second amended complaint “if it believes that it can cure the pleading defects.”

This decision has significance not just for employers who are under attack by the EEOC for maintaining leave policies under which employees are subject to termination after a set period of time, but also for employers who are facing pattern or practice claims.  The good news is that some trial courts are becoming reluctant to allow the EEOC to pursue nationwide class actions without at least complying with basic pleading requirements applicable to every ADA plaintiff.  On the other hand, employers facing pattern-and-practice investigations should not be surprised if the agency soon gets more aggressive in exercising its broad investigatory and subpoena powers to avoid similar results in the future.