This is actually my second shot at a blog entry for this week. I actually spent a little bit of time this morning writing up a blog on the proposed regulations implementing the nondiscrimination provision of the genetic information nondiscrimination act. However, as I was going through a draft for such a blog entry, I realized that it just wasn’t working for me. Also, I have the high bar that my fellow bloggers-Jonathan Hyman, Robin Shea, and Eric Meyer- had all blogged on the issue (each of those blogs can be found in my blog roll), and they had done it very well. So, that left me with having to pursue something else.

Today’s blog entry explores the question of just when does the statute of limitations begin to run in an ADA employment claim. Today’s case is EEOC v. Orion Energy Systems, 2015 U.S. Dist. LEXIS 153216 (E.D. Wisc. November 12, 2015). As is usual, my blog entry is divided into categories: facts; court’s reasoning; and takeaways. The reader is free to focus on any or all of the categories. Since this blog entry is so short, I imagine the reader will want to read all of it, but nevertheless, the categories are there for your use.

I
Facts

The facts are pretty straightforward. Orion Energy terminated Wendy Schobert’s employment on May 18, 2009. She claimed that the true reason she was fired was because she refused to participate in a wellness program administered by Orion. She filed an administrative complaint with the EEOC on March 10, 2010, which was 296 days (if an equivalent state agency is present, a person has 300 days to file a claim with the appropriate administrative agency), after she was terminated. The EEOC then commenced an action on behalf of her alleging that Orion administered involuntary medical examinations and disability related inquiries as part of the wellness program in violation of the ADA. The EEOC further alleged that Orion retaliated against Ms. Schobert by firing her for objecting to the program and intimidated her for exercising her right not to participate in the program in violation of the ADA. On September 4 of 2015, Orion filed a motion to amend its answer and affirmative defenses so that it could add a statute of limitations defense. In particular, Ms. Schobert admitted in a deposition that she knew she was going to be fired one week before the May 18, 2009, meeting. That week difference would be the difference between the claim falling within the statute of limitations and the claim falling outside of the statute of limitations. More particularly, in a deposition she admitted that she had overheard a conversation between the manager and the director of human resources where she was able to determine that she was going to be terminated due to the context of that conversation.

II
Court’s Reasoning

In denying the defense motion to add the statute of limitations claim, the court reasoned as follows:

1. When it comes to the statute of limitations question, it is the date of the discriminatory act that is controlling and not necessarily the date of termination. Oftentimes, it doesn’t matter, but in some contexts it does. For example, the court mentioned tenure decisions where the act complained of is the denial of tenure and the actual effective termination date is actually quite a bit into the future.

2. In the Seventh Circuit, the test used is the unequivocal notice of termination test. That particular test has two prongs: 1) there must be a final, ultimate, not tentative decision to terminate the employee; and 2) the employer must give the employee unequivocal notice of its final termination decision. With respect to prong 2 of the test, the court explained that the unequivocal element of the test is based on the notion that the mere threat to take some job action against an employee is not sufficient to trigger the statute of limitations because to hold otherwise, would force plaintiff’s into the situation where they have to file a charge at every hint of termination in order to preserve their claims. That, in turn, would make the life of the EEOC impossible. The unequivocal test also requires that the employer actually give notice to the employee.

3. While the facts are such that it was clear that the decision to be terminated was final by the time she overheard the conversation, she was not given unequivocal notice of the termination at the time she heard the conversation. In fact, by definition, she could not have been as she had heard the conversation surreptitiously.

4. Orion knew of the basis for the statute of limitations defense way before the deposition occurred since the VP who did the firing was told by Ms. Schobert that she had overheard the conversation prior to when she was actually terminated. Therefore, Orion was not diligent by waiting until after the deposition to assert the defense. Further, since the unequivocal notice test wasn’t met, it would be futile to allow the motion to amend because the affirmative defense would be rejected in any event.

III
Takeaways:

1. In most situations, adverse action and the termination are going to wind up being the same when it is a job loss that is being contested. However, as this case illustrates, that isn’t always the case. In the Seventh Circuit at least, the question comes down to whether the employee had unequivocal notice of their termination. It is at that point in time, that the statute of limitations will begin to run. Keep in mind, That the various Circuits are free to go their own way unless United States Supreme Court says otherwise. Therefore, if you are not in the Seventh Circuit, you will want to do some research to see if your jurisdiction uses the unequivocal notice test discussed in this blog entry.

2. For the statute to begin to run, unequivocal notice carries with it an assumption that the employer is intentionally providing notice of the termination.

3. I suppose the defense attorneys are fortunate with the court finding that the statute of limitations defense even if diligent would have been rejected due to the lack of unequivocal notice. Otherwise, the defense firm could be facing an even bigger problem. If this shows anything, it shows the importance of full communications between the company and the litigating attorneys and the need for thorough investigation (which may or may not have been done), with respect to all the facts. Not sure I understand why it was only much later that the litigating attorneys seem to be aware of the fact that Ms. Schobert had heard of the termination a week prior to actually being terminated when the person doing the firing was told as much at the time of firing. In any event, it is just a theoretical issue, since the court said the facts of this case were such that the unequivocal termination test could simply not be met.

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