By:  Kara M. Maciel and Casey Cosentino

The U.S. Equal Employment Opportunity Commission (EEOC) continues its aggressive quest to challenge “inflexible” medical leave policies, as Denny’s Inc. agreed earlier this month to pay $1.3 million to settle a nationwide class action lawsuit. Denny’s also entered into an injunction barring its restaurants from future violations of the Americans with Disabilities Act (ADA), including denying disabled employees reasonable medical leave and retaliating against employees for bringing disability discrimination claims.

The EEOC filed the class action in 2009 in federal court in Maryland alleging, among other things, that Denny’s violated the ADA by enforcing a leave policy that automatically denied additional medical leave beyond a predetermined limit, even when the employee requested additional leave as a reasonable accommodation. This “inflexible” leave policy, common to many employers, led to the termination of the employees.

The Denny’s case represents the latest in the growing number of class action lawsuits brought by the EEOC against employers maintaining inflexible leave policies. For example, in January 2011, the EEOC settled a class action lawsuit for $3.2 million with the supermarket chain, Jewel-Osco. In 2009, the EEOC settled its largest ADA settlement to date of $6.2 million with a national retailer over similar claims. Several other cases remain pending with the EEOC. The EEOC believes that these policies prevent the employer and employee from engaging in an interactive process to determine the existence of reasonable accommodation as required by the ADA. Employers, therefore, face almost certain scrutiny from the EEOC for discharging an employee who cannot return to work after exhausting a predetermined period of leave and for failing to consider extending the leave as a reasonable accommodation.

In light of the Denny’s settlement and the EEOC’s unwavering position against inflexible leave policies, hospitality employers take the following steps:

  • Amend fixed leave policies that rigidly adhere to automatic medical or disability leave limits;
  • Evaluate each employee’s leave request on a case-by-case basis;
  • Train managers on the importance of the interactive process under the ADA and the need for a reasonable accommodation; and
  • Document all requests for reasonable accommodations and steps taken during the interactive process. 

Prudent hospitality employers will not wait for a charge or lawsuit to review their policies in light of the aggressive EEOC enforcement efforts.