Employee's Disability May Have Been a Factor in Layoff

​An IT engineer could go forward with her disability bias claim even though she had been tentatively designated for layoff before she became disabled, a California appeals court recently ruled. The employer, a California hospital system, did not finalize its layoff plans until after the employee had become disabled, and there was evidence that the employer's ultimate decision to terminate the employee was motivated, at least in substantial part, by concerns the employer had about the employee's disability, the court said.  

The employee was hired in June 1999, and from 1999 to 2018, her managers evaluated her performance positively. In December 2018, the employer began planning to lay off employees for economic reasons. The director of the division where the employee worked made the decision to eliminate the employee's position.

On Jan. 7, 2019, the employee fell in the workplace and suffered an injury to her left shoulder. She was placed on modified duty with restrictions limiting the use of her left arm and requiring her to attend medical and physical therapy visits. On Jan. 29, her supervisor discussed her performance with HR and identified an issue with the quality of her work, noting that she was typing slowly, resulting in a decline in her work performance. On Jan. 31, the employer circulated an updated reduction in force (RIF) list, which had been narrowed from 31 to 25 employees but still included the IT engineer.

On Feb. 22, the employee's modified duty was extended by her doctor through March 25. On Feb. 27, the employee's supervisor met with her to discuss her performance. He told her that her "unavailability" had occasionally forced her teammates to complete tasks for her and that her "pace of execution needs improvement." On March 8, the employee met with her supervisor to discuss and complete her 2018 year-end performance evaluation. Although the supervisor again rated the employee's overall performance as successful, he rated her performance in several subcategories as needing improvement. Shortly after this meeting, the employee went on medical leave.

In March, the employer circulated two more drafts of the RIF list, which was reduced from 25 employees to 20 employees and finally to 17, still including the IT engineer. On April 24, the employer notified the employee that her position had been eliminated and that her employment would be terminated.

The employee filed a lawsuit against the employer, alleging, among other claims, disability discrimination in violation of California's Fair Employment and Housing Act (FEHA).  

The employer sought to have the disability discrimination claim dismissed before trial, arguing that the decision to eliminate the employee's position in the RIF had been made before she sustained her disability and so could not be the result of disability bias. The employee argued that although her name had been selected for the initial RIF list in December 2018, this proposed list was subject to further review, as reflected in the list's gradual reduction from 31 employees to the 17 who were ultimately laid off.

She further argued that her ultimate termination was a result of her supervisor's post-disability assessment of her, and that the supervisor's negative ratings were based on her disability. The trial court dismissed the claim before trial, and the employee appealed.

FEHA Disability Discrimination

FEHA prohibits an employer from discharging any person from employment because of the person's disability. A disabled employee need not show that a disability was the sole reason for a termination, the court first noted. Instead, when a plaintiff-employee advances a "mixed motive" theory—a theory that an employer had both legitimate and discriminatory motives for a termination—the plaintiff must show only that the disability was a substantial motivating factor in the challenged employment action.

In addition, under the cat's paw doctrine, showing that a significant participant in an employment decision exhibited discriminatory animus is enough to raise an inference that the employment decision itself was discriminatory, even absent evidence that others in the process harbored such animus.

These standards compelled reversal of the trial court's dismissal of the employee's FEHA disability discrimination claim, the appeals court concluded.

The employer was correct, the court said, that its decision to place the employee on the initial RIF list for termination in December 2018—before she became disabled—could not have been unlawful disability discrimination. However, the court then concluded that a jury could find that the employee's December 2018 selection for the RIF was tentative. Between December 2018 and March 2019, the employer circulated several progressively narrower drafts of the RIF list—cutting the number of employees impacted and indicating that it was trying to find other ways to lower costs.

The appeals court further concluded that a reasonable jury could find that the employee's eventual termination was substantially motivated by her disability. Before she sustained her disability, neither her current supervisor nor any prior supervisor had given her a negative performance evaluation.  

After her disability, however, her supervisor judged her performance more harshly. Furthermore, because her supervisor's negative evaluations were provided to the division director, who decided which employees were to be laid off, the employer could be liable under a cat's paw theory, the court said.

Lin v. Kaiser Foundation Hospitals, Calif. Ct. App., No. B314162 (Feb. 24, 2023).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.