Before getting started on our blog entry for the week, I want to let everyone know that next week my daughter’s school has a break, and we are off to Universal Orlando for the week. We are all big Harry Potter fans. So, with Monday being a holiday and my daughter being off with some appointments, I am not sure I will get a blog up on Monday. No way, I get a blog up the rest of the week. I will definitely be back blogging the week of the 25th.

One of the things that we have talked about in our blog is the difficulty of class actions when it comes to persons with disabilities. It is, as we have discussed here, very difficult to pull off. I do see them with respect to deaf and hard of hearing access. I also see it with respect to the treatment of prisoners with disabilities, which we discussed here. Other than that, very difficult to pull off. Now comes a case from the District Court of Nebraska saying that a class action can proceed with respect to a particularly egregious fitness for duty policy of the Union Pacific Railroad Company. The case is Harris v. Union Pacific Railroad Company from the U.S. District Court in Nebraska decided on February 5, 2019. As usual, the blog entry is divided into categories and they are: facts; court’s reasoning allowing class action to proceed; and takeaways. I have broken down the reasoning into specific compartments. Of course, the reader is free to focus on any or all of the categories.

I

Facts

Union Pacific has a companywide fitness for duty program. The policy, effective 2014, works like this. Employees in certain positions are required to disclose specific health conditions. That policy automatically precludes employees disclosing those conditions from employment. Those employees then have to have a fitness for duty evaluation, and according to plaintiffs, Union Pacific routinely ignored the medical opinions of outside doctors. The records are then sent to a doctor, a Dr. Holland, in Olympia, Washington and his support staff. The doctor and his staff do not do a physical evaluation, then he and his designees make all decisions regarding who is fit for duty.

The plaintiffs are all previous employees of Union Pacific. Many had worked for years and were allegedly qualified in performing their jobs with no problem. They were pulled from their jobs under this program, evaluated, and then excluded from their positions with Union Pacific even though, according to the plaintiffs, they had no trouble fulfilling the essential functions of the job. Plaintiff challenged Union Pacific’s policy of removing employees from the job based on an arbitrary and scientifically unsound 1% rule regarding the risk of sudden incapacitation. Dr. Holland, the physician making the decisions in Olympia Washington, admitted that Union Pacific applied a uniform threshold risk level by considering any condition with the risk for a sudden impact event of greater than 1% in the coming year to require restrictions from work. That is, non-acceptable risk meant an absolute current risk of sudden incapacitation greater than 1% annual recurrence rate in the coming year.

Plaintiffs brought a class action alleging: 1) disparate treatment; 2) disparate impact; and 3) unlawful medical inquiry in violation of 42 U.S.C. §12112(d)(4)(A). The proposed class encompassed, “individuals who were removed from service over their objection, and/or suffered another adverse employment action, during their employment with Union Pacific for reasons related to a fitness for duty evaluation at any time from 300 days before the earliest date that a named plaintiff filed an administrative charge of discrimination to the resolution of this action.

II

Court’s Reasoning Allowing the Class Action to Proceed

  1. The four basic requirements of a class action under Rule 23(a) are: 1) numerosity; 2) commonality; 3) typicality; and 4) adequacy of representation. Further, one of the following §§ of Rule 23(b) must also be met: 1) a risk of inconsistent adjudication or impairment of interest for non-class members exists; 2) the defendant’s conduct apply generally to the whole class; or 3) questions of law or fact common to members of the class predominate in the class action is a superior method for adjudication. Finally, Rule 23 requires any certification of the class to have in its order the appointment of class counsel.

Numerosity

  1. Regarding numerosity, no magic number proving numerosity exists, but courts have stated that a class of 40 works. Here, the plaintiffs have presented evidence of potentially 7000 class members. While Union Pacific disputes the exact number, it does not dispute that plaintiffs meet the numerosity requirement.

Commonality

  1. Regarding commonality, commonality is satisfied when the legal question linking the class members is substantially related to the resolution of the litigation.
  2. Commonality requirement imposes a very light burden on a plaintiff seeking to certify a class and is easily satisfied.
  3. The key to commonality is focusing on the capacity of a classwide proceeding to generate common answers apt to drive the resolution of litigation. The similarities within the proposed class are what have the potential to impede the generation of common answers.
  4. The court finds commonality exists for several reasons: 1) the fitness for duty policies and reportable health events are uniformly carried out nationwide by the same group of decision-makers, i.e. Dr. Holland and his team of doctors and nurses; 2) 75% of Union Pacific’s 40,000+ employees are considered working in these positions and therefore, are subject to reportable health events policy; 3) each employee has to undergo an evaluation; 4) medical records are obtained on each of those employees, and the employees are not physically examined by Dr. Holland or his team; 5) the doctor merely looks at the employee’s medical records, references materials for the suspected condition or diagnosis, and decides whether the employee poses a greater than 1% risk of sudden incapacitation within the next year; 6) where appropriate, work restrictions are implemented, and in most cases, those broad restrictions make it impossible for the employee to continue working; and 7) proof will be the same regarding systemic disability discrimination, operating procedures and policies, and the affirmative defenses (direct threat and business necessity).

Typicality

  1. Regarding typicality, the court found the claims and defenses are typical of the class for a variety of reasons: 1) all complaints alleged discrimination; 2) all complaints involve the exact same policy; 3) most of the employees allegedly are either discharged or constructively discharged by the 1% rule; 3) the regulations and fitness for duty policies have led to dismissal or significant restrictions on the employees; 4) of the 7000 Union Pacific employees having to report a health event under the policy, it appears that at least 3145 of them were not cleared for work or were issued work restrictions; 5) for those with a “critical diagnosis,” those employees were not cleared for work or given very high levels of work restrictions; and 6) workers were often given long-term restrictions that lasted hundreds of days if not years.

Adequacy of Representation

  1. Regarding the adequacy of representation, plaintiff’s interests do not diverge or are opposed to the rest of the class, and counsel would adequately represent the class members as they are experienced and competent to lead the case.

Rule 23(b)(3)

  1. For class certification, plaintiffs also must prove one of the requirements of Rule 23(b). In this case, the rule involved is Rule 23(b)(3), which necessitates a finding by the court that questions of law or fact common to class member predominate over any questions affecting only individual members, and that a class action is superior to other available method for fairly and efficiently adjudicating the controversy.
  2. With respect to predominance, common issues have to constitute a significant part of any individual cases. Another way to look at it is that where there is an essential factual link between all class members and the defendants for which the law provides a remedy, questions of law or fact common to the class exists.
  3. The proposed class is sufficiently cohesive as it involves an alleged pattern of employee decision-making with respect to the class even more so than with respect to the individuals. Finally, the same evidence will be used to establish class wide proof.
  4. In a footnote, the court noted that the plaintiffs identified their support for the pattern or practice liability, which included: 1) a uniform, written reportable health event policy; 2) uniform implementation of that policy by a small group of decision-makers guided by standardized policies and practices; 3) evidence that the policy is invalid because among other things it is based upon incorrect generalizations about the risk of sudden incapacitation posed by certain health condition, including a scientifically unsound 1% rule and inapplicable material governing commercial truck drivers; 4) internal documents showing that the company was aware of the discriminatory intent and outcomes of its policy; 5) numerous specific instances of discrimination suffered by class members; and 6) data showing a pattern of thousands of workers suffering adverse outcomes as a result of Union Pacific’s policy.
  5. With respect to superiority, the question is whether the adjudication of common issues helps achieve judicial economy. The court found this satisfied because common question regarding the proposed class, including a pattern and practice of discrimination and the viability of Union Pacific’s affirmative defenses exist. Much of the case relies on common proof. So, to allow individual lawsuits would duplicate that proof over and over again.
  6. In the Eighth Circuit, a class must be adequately defined and clearly ascertainable. That is the case here because the case involves a single, uniform reportable events policy. The Eighth Circuit has not joined the Third Circuit in requiring an additional requirement of administrative feasibility of the class. In any event, the administrative feasibility requirement doesn’t make sense when you have a pattern of discriminatory decision-making, i.e. a pattern or practice case.

Court’s Way Forward

  1. With respect to how the case proceeds in the future, the court set up a two-part process. First, the parties litigate liability and injunctive relief in phase 1. Then, in phase 2, parties litigate damages and other remaining issues through individual hearings, or group hearings as appropriate, or by stipulations of the parties.

III

Takeaways

  1. You have to figure that this case is going to settle. We have discussed direct threat many times, such as here, here, and here, and it’s hard for me to believe that such a policy could even remotely come close to meeting the direct threat standard. Also, we have discussed job-related and consistent with business necessity several times as well, such as here. Hard for me to believe that these exams would job-related and consistent with business necessity.
  2. One wonders about how the policy came into being. Hard to believe that knowledgeable ADA counsel would not have spotted the issues with respect to how it screens out persons with disabilities (title I, II, and III all have provisions in them prohibiting policies and procedures that screen out persons with disabilities). It would be interesting to know if the policy was reviewed by in-house or outside legal counsel before implementation as that might create malpractice issues. It is also entirely possible that legal pointed out the difficulties and the client went ahead and did it anyway. That does happen. As mentioned above, the court in a footnote, said that the company was made aware of the discriminatory impact of the policy.
  3. The policy is so draconian that in my opinion, the regarded as prong is also activated.
  4. The ADA requires an individual analysis and an interactive process, both of which are missing in this case.
  5. Interesting discussion about pattern or practice since it is the EEOC that brings such actions. You generally don’t think of a pattern or practice with regards to private litigants. That said, you certainly have screen out issues going on here, which as a de facto matter when combined with the policy amounts to something very similar.
  6. Check your jurisdiction as to whether it adopts an additional administrative feasibility rule when it comes to class actions.
  7. Ignoring relevant medical evidence is never a good idea.
  8. Considering how hard it is to find labor nowadays, one wonders about the business sense of Union Pacific’s policy.
  9. Many of the employees worked for years with no problems. So, if it ain’t broke, don’t fix it.
  10. Commonality is not a difficult requirement to satisfy.
  11. For the reasons discussed in this blog entry, I can’t imagine an appeal being successful.

4 Responses to Egregious Fitness for Duty Policy Leads to Class Action Certification

Union Pacific filed a 23(f) petition in the eighth circuit for leave to appeal the class certification order with a response due in early March.

The Court of Appeals granted permission to appeal from the order certifying a class action today (March 13).

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