Obviously, I missed a blog entry last week. I have an explanation. My daughter was on break, my wife took a couple of days off towards the end of the week, and client matters intervened. Also, last week, I added an article to my in the media section, where I can be found discussing in the Washington Post the case of an armless man fired by his employer as a result of the way he had to transport himself to work. Jon Hyman has a blog entry on that case as well. Fortunately, I still have client matters, but my daughter is back to school and everything else is back to normal. So, back to the blog entry for the week. The case, Sheng v. MTBank Corporation, came to me courtesy of one of the blogs, Wait a Second, that I subscribe to and can be found in my current blog roll. The case explores two issues. First, are settlement offers admissible? Second, does the interactive process include what is contained in an offer to settle claims? As we will see, the answer to both questions is no. As is usual, the blog entry is divided into categories, and they are: facts; issues; court’s reasoning; and takeaways. Of course, the reader is free to read any or all of the categories.




In January 2010, plaintiff began her employment with the bank in Buffalo, New York as a lead on its quality assurance test team in the bank’s central technology department. That team executes system testing of computer programs for bank applications. In March 2011, she decided to resign her position and relocate to Los Angeles on account of her husband taking a job there. However, her supervisor suggested that she continue to work at the bank remotely through the bank’s alternative work arrangement policy. Under that policy, when an employee fails to resume the traditional work schedule or location upon revocation of the alternative work arrangement, it is considered a voluntary resignation of employment. She accepted the offer and began working remotely from California. In the spring of 2012, the bank began exploring the reorganization of her department, and in May 2012, announced that reorganization to employees. At the meeting announcing the reorganization, the bank made clear that alternative work arrangements would be reviewed. The bank that same day called the plaintiff who confirmed she understood her status could be affected by the reorganization. The next day plaintiff notified her supervisor she was pregnant and expressed concern about the alternative work arrangement being revoked. The bank responded that under the new organizational system, team leads would have to be physically present in Buffalo at least two days per week in order to communicate and work directly with the individuals implementing the particular project. On June 27 of 2012, her supervisor notified the plaintiff that her alternative work arrangement status would be altered and she would need to begin traveling to Buffalo. The following day the plaintiff emailed her supervisor and the bank’s human resources department requesting a meeting to discuss the possibility of delaying the start of a commute to Buffalo until after she gave birth. That request was denied. On July 19, the plaintiff submitted a letter from her obstetrician to her supervisor and to the bank’s human resource department stating that for health reasons she should not engage in air travel for the duration of her pregnancy. After receiving the letter, the bank’s management and its human resources department determined that there was not enough work available besides the particular project her team was focused on to keep her occupied. For the next eight weeks, little communication between the plaintiff and the bank occurred. Finally, on September 11, of 2012, the bank notified the plaintiff that she should either permanently relocate to Buffalo within 30 days or apply for and take early short-term disability leave. Failure to do either of these options would result in termination and being given 11 weeks of severance pay. On September 14, plaintiff rejected those offers. On September 20, an attorney she hired wrote a letter to the bank’s general counsel stating that the plaintiff had been effectively terminated because of her pregnancy. Settlement talks then ensued. At the start of that settlement talk, her attorney made clear to the bank’s general counsel that Rule 408 of the Federal Rules of Evidence, which provides that offers a settlement are inadmissible in later proceedings under certain conditions, would apply to the conversation. Plaintiff’s attorney made a settlement offer demanding $200,000. The bank’s general counsel responded that that was not going to happen, but did suggest that the plaintiff be reinstated and that should be allowed to work remotely from Los Angeles for the remainder of her pregnancy. No explicit statement was made that the reinstatement offer was conditioned upon the execution of a release of claims for monetary damages. Plaintiff then filed a charge with the EEOC and eventually proceeded to the courthouse. At trial, the bank was successful in getting the offer of settlement, which contained the ability to work remotely, admitted. The court also declined to instruct the jury that the ADA imposes an affirmative duty on employers to engage in an interactive process with all employees requesting accommodations. When the jury came back with a verdict for the defense, plaintiff appealed.



  1. Are settlement offers admissible?
  2. Does an offer of settlement count towards the interactive process?


Court’s Reasoning

In holding that settlement offers are not admissible and that an offer of settlement does not count towards the interactive process, the court reasoned as follows:

  1. Federal Rule of Evidence 408(a) prohibits the admission of evidence to prove or disprove the validity or amount of a disputed claim offering valuable consideration in attempting to compromise that claim.
  2. Where a party is represented by counsel, threatens litigation, and initiates the first administrative steps in that litigation, any offer made between attorneys will be presumed to be an offer within the scope of Federal Rule of Evidence 408.
  3. Where a lawyer informed counsel for a potential plaintiff that the potential defendant agrees to all relief believed to be demanded, it is assumed that some sort of release, at the very least, is expected in return. This expectation, which litigators assume as a matter of course universally, absent express reservation to the contrary, makes the offer conditional and subject to exclusion under Federal Rules of Evidence 408.
  4. In this situation, the assumption that such a release would have been forthcoming isn’t even necessary to think about because the bank’s general counsel admitted to the EEOC that the offer was conditioned on the plaintiff forgoing litigation when he said that the offer he made was not unlike any other offer of compromise that would be offered to stave off the vagaries of litigation, and that the bank had decided to capitulate to plaintiff’s demand solely because it recognized that it would be better to do that than to incur time and expense fighting the issue.
  5. Admitting the offer of settlement was not harmless error because the jury could have well asked himself the question what are they doing there if the bank had offered her what she wanted in the first place. Accordingly, the reinstatement offer may have substantially affected the jury’s verdict.
  6. While there is no independent claim for failure to engage in the interactive process, district courts may admit an employer’s failure to engage in an interactive process as evidence of discrimination under the ADA. The ADA’s reference to a qualified individual and the EEOC’s final regulations make it clear that the employer’s failure to engage in a good faith interactive process can be introduced as evidence tending to show disability discrimination were the employer has refused to make a reasonable accommodation.
  7. An employer’s failure to engage in a sufficient interactive process does not form the basis of a claim under the ADA and allow the plaintiff to survive summary judgment unless the plaintiff also establishes that he or she was a qualified person with a disability (in this case, capable of performing the essential functions of the job with or without reasonable accommodations).
  8. An offer of accommodation conditioned upon the dropping of monetary claims does not fulfill the requirements of the ADA as to an interactive process. The ADA clearly imposes a duty on the employer to provide an accommodation in job requirements, if feasible. Such a discussion relates to the feasibility of accommodating the needs of both the employee and the employer. Conditioning proposed accommodations on the dropping of claims does not satisfy that obligation.



  1. While the interactive process in the Second Circuit is not an independent violation of the ADA, failure to engage in the interactive process is indicative of disability discrimination. Therefore, what you have is a matter of form. That is, alleging interactive process deficiencies as a violation of the ADA doesn’t work, in the Second Circuit anyway, but alleging that disability discrimination occurred because of interactive process deficiencies does work.
  2. Settlement offers are presumptively inadmissible.
  3. Settlement offers are not part of the interactive process. So, if an employer has failed to engage in the interactive process sufficiently, what happens in any settlement negotiations will not be counted towards the interactive process.
  4. The Second Circuit’s focus on feasibility with respect to the accommodation process is a bit unfortunate because it suggests a lower standard than what the law provides. My guess is that use of feasibility by the Second Circuit wasn’t intended that way. After all, the ADA requires accommodations for a qualified person with a disability unless an undue hardship exists (logistical or financial).
  5. By this opinion, the Second Circuit joins the majority of Circuits in holding that violations of the interactive process do not constitute an independent cause of action for violating the ADA.