A federal appeals court found this week that requiring an employee to enter an Employee Assistance Program may be an “adverse employment action” under the federal anti-discrimination laws.
One of the things you have to prove as a plaintiff in a discrimination case is that you were subjected to some sort of “adverse action” by your employer – for example, that you weren't hired, or you were fired, or demoted, or your pay was reduced. If the employer didn't do anything bad to you, then you have no case. That stands to reason.
(Of course, you also have to have some evidence that this adverse action was based on your race, color, sex, national origin, religion, disability, or age, as opposed to some other reason.)
Just a "pip" of harm may be enough
Last year, the U.S. Supreme Court ruled that a job transfer with no cut in pay could be an adverse employment action as long as the plaintiff suffered “some” harm. The plaintiff in that case was not demoted but was transferred to a lateral position with no cut in pay. But in the new job, her duties were more routine, she had to work weekends, and she lost the use of a vehicle that she could keep at home.
In our current case, the plaintiff worked in the billing department for a health care organization. She was counseled a number of times about her job performance and her workplace behavior, and the employer had decided to issue her a Performance Improvement Plan – which we in the employment law world affectionately call a “PIP” (pronounced “pip,” not “pee-eye-pee,” although some have been known to pronounce it that way).
NOT PIPE! PIP!
After the employer decided on the PIP but the day before the PIP was written, several of the plaintiff’s coworkers expressed concern about the plaintiff’s safety and reported that she had been talking about suicide.
Based on this information, the person drafting the PIP added to the PIP a mandatory referral to the Employee Assistance Program.
In the PIP meeting, the plaintiff resisted the referral, and appears to have been primarily concerned about the privacy of her information. She seemed to relent after the employer told her that it would not be receiving any information from the EAP provider about her condition or treatment.
The provider was allowed to share with the employer whether the plaintiff was keeping her appointments and cooperating in her treatment. This is very standard. But when the plaintiff heard this, she refused to accept the referral, and after about a week of haggling with the employer and refusing to sign the paperwork, her employment was terminated.
She sued, claiming violations of the Americans with Disabilities Act and the Rehabilitation Act of 1973, which is like the ADA but for federal contractors. The claims were based on her contention that she was “regarded as” having a disability by her employer. (She denied having had the conversations about suicide, and denied that she had any actual psychological issues.)
NOT PEPPA! PIP!
Win some, lose some
This all happened in 2019. In January 2024, a federal judge in Colorado granted summary judgment to the employer on the ground that the plaintiff had not suffered an “adverse employment action” because the mandatory referral did not cause "significant harm" to the plaintiff (the old standard, which was then still in place). The plaintiff appealed to the U.S. Court of Appeals for the Tenth Circuit, and in April 2024, while her appeal was pending, the Supreme Court issued its “some harm” decision.
All of which brings us to this week’s decision from the Tenth Circuit. A three-judge panel said that the lower court did the right thing based on the legal standard that applied at the time. But because of the SCOTUS decision that came out afterward, the Tenth Circuit reversed and sent the case back for the lower court to decide whether the mandatory referral was an “adverse employment action.” If so, the plaintiff will be allowed to continue with her lawsuit.
NOT TIP! PIP!
Does this mean the employer will lose the case? No. Even if the mandatory referral is found to be “adverse,” the employer can still present evidence that it made the referral for legitimate, nondiscriminatory reasons that did not violate the ADA or the Rehabilitation Act.
But the Tenth Circuit decision, coupled with the Supreme Court decision on which it was based, indicates that employers are losing one very helpful and straightforward defense to discrimination claims.
Drugs and alcohol: Mandatory referrals in the real world
In the vast majority of cases (at least, in my experience), employees are required to go through EAPs not because of actual or suspected psychological problems but because of actual or suspected substance abuse, usually a positive drug test.
The Tenth Circuit decision should have little, if any, effect on that practice. Even if the mandatory referral is an "adverse employment action," current users of illegal drugs are not protected under the ADA. Most significantly, marijuana is still an illegal drug under federal law, so even if the use of marijuana is legal under state law, it has no ADA protection. (Of course, the user may have protections under state law.)
In 2022, the Biden Administration announced that it was seeking to loosen the restrictions on marijuana use under federal law. I haven't heard any more about that and don't know the Trump Administration's position.
NOT NIP! TIP! I MEAN, PIP!
The status of alcohol use under the ADA is more complicated. Alcoholism is a protected disability, so employers should be careful when requiring an employee to go through an EAP because of suspected alcohol abuse. And, this is off-topic, but just a reminder that in most cases you can't do pre-employment, random, or universal testing for alcohol because those tests are "medical examinations" within the meaning of the ADA. In other words, they can be performed only if "job-related and consistent with business necessity" (in this context, for reasonable suspicion, as required for rehabilitation, or as part of a last-chance agreement), or if required by another federal law such as U.S. Department of Transportation regulations.
