The federal Americans with Disabilities Act (ADA) and California’s Fair Employment and Housing Act (FEHA) both require employers to reasonably accommodate the known physical or mental limitations of an otherwise qualified employee or applicant with a disability. However, an employer’s duty to provide reasonable accommodation under the FEHA is broader than under the ADA, even considering the recent amendments to the ADA which become effective on January 1, 2009. (We wrote about the amendments in our September 24, 2008, column.)

Unlike the ADA, under the FEHA, an employer’s failure to provide a reasonable accommodation is a separate statutory violation. Discrimination in the terms and conditions of employment is not required. Moreover, although federal courts have interpreted the ADA to require an employer to engage in a timely, good faith, interactive process with an applicant/employee to determine effective reasonable accommodations, the FEHA goes further in providing a separate cause of action for failure to do so.

The California Court of Appeal recently considered the scope of an employer’s obligation under the FEHA to offer alternative positions as a reasonable accommodation. In Nadaf-Rahrov v. The Neiman Marcus Group, Inc., the Court ruled that it is an employee’s legal burden to prove the existence of an available, vacant position to support a claim of failure to accommodate or failure to engage in the interactive process. The Court’s decision imposes significant requirements on employers in this difficult area.

The Facts

Forough Nadaf-Rahrov began working as a “clothes fitter” for The Neiman Marcus Group, Inc. (Neiman Marcus) in April 1985. In December 2002, Nadaf-Rahov’s health care provider informed Neiman Marcus that she had carpal tunnel syndrome in both hands and osteoarthritis in her fingers. On November 7, 2003, Nadaf-Rahrov requested family medical leave under the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). She provided Neiman Marcus with a certification from her health care provider stating that she was unable to perform work of any kind and she was precluded from performing all of the essential job functions of her current position. Based on this information, Neiman Marcus approved Nadaf-Rahrov’s request for leave.

In a letter dated January 21, 2004, Nadaf-Rahrov informed Neiman Marcus that she could not return to her clothes fitter job due to her medical condition, and requested a reassignment to another position. Her health care provider wrote Neiman Marcus a similar letter on January 25, 2005, confirming Nadaf-Rahrov’s disability and recommending she be assigned to a position “that would not involve bending, standing, or kneeling.”

Nadaf-Rahrov’s FMLA/CFRA leave expired on February 1, 2004. However, based on the medical documentation she provided, Neiman Marcus granted Nadaf-Rahrov additional time off and continued to pay her accrued sick leave benefits. Nadaf-Rahrov’s health care provider subsequently extended her return-to-work date four times through August 16, 2004. The final documentation from the health care provider, dated June 28, 2004, stated, “Forough Nadaf remains unable to return to work as she is having increasing pain. I am extending her disability for an additional 6 weeks. I believe she may be able to return to work on 8/16/04 but not in her previous position.”

On July 14, 2004, Neiman Marcus decided to terminate Nadaf-Rahrov’s employment. At the time of her termination, Nadaf-Rahrov did not have a release from her health care provider to perform work of any kind. Even with such a release, Neiman Marcus’s Human Resources Manager concluded that given Nadaf-Rahrov’s existing medical restrictions, she was not qualified to fill any open and available position within the organization. Moreover, the documentation from Nadaf-Rahrov’s health care provider did not definitively state she would be released to return to work on August 18, 2004. Based on Nadaf-Rahrov’s history of repeated requests for additional time off, the Human Resources Director believed she would seek further leave, and determined it was not reasonable to grant the six-week extension.

Nadaf-Rahrov subsequently sued Neiman Marcus under the FEHA for, among other things, failure to accommodate her disability and failure to engage in the interactive process. The lower court granted summary judgment in favor of Neiman Marcus on the basis that the undisputed facts established Nadaf-Rahrov was unable to perform the essential functions of her fitter position or any other available position in the organization. In addition, the court found that Neiman Marcus had reasonably accommodated Nadaf-Rahrov by providing six months of leave beyond the expiration of her FMLA/CFRA leave, and the organization was not required to wait indefinitely for her medical condition to improve to the point that she could perform the duties of an available position. Nadaf-Rahrov appealed.

The Court of Appeal’s Decision

Neiman Marcus relied on three key arguments in its defense of Nadaf-Rahrov’s claims: (1) the health care provider stated in the medical certification that Nadaf-Rahrov could not perform work of any kind; (2) Nadaf-Rahrov’s own description of her physical limitations demonstrated that she was unable to return to work in any capacity; and (3) the Human Resources Manager had determined based on the information Nadaf-Rahrov provided that she could not perform the essential job functions of any vacant positions in the organization.

In reversing the lower court’s decision, the Court essentially disregarded the medical certification stating that Nadaf-Rahrov was completely unable to work and unable to perform the essential functions of her fitter position. The Court also rejected Neiman Marcus’s argument that Nadaf-Rahrov’s health care provider never released her to return to work in any capacity and therefore there was no basis for engaging in further interactive conversations. Instead, the Court relied on the testimony of Nadaf-Rahrov’s health care provider that he intended his January 2004 letter to Neiman Marcus to indicate only that Nadaf-Rahrov was unable to perform the essential job functions of the fitter position and that he had encouraged her seek a less strenuous position at work.

Neiman Marcus unsuccessfully argued that the health care provider’s testimony directly contradicted his statements in the medical certification and subsequent notes to the organization. In the Court’s view, the health care provider, who was intimately familiar with Nadaf-Rahrov’s physical restrictions, was in a better position to interpret what his own writings meant.

Regarding the availability of alternative positions, Nadaf-Rahrov testified during her deposition that she was so severely physically disabled she could not perform most ordinary household chores or activities of daily living. The lower court concluded from this testimony that Nadaf-Rahrov’s ongoing physical problems prevented her from taking any position at Neiman Marcus. The Court of Appeal, however, disagreed with that assessment. Instead, the Court concluded that a jury could find that despite her limitations, Nadaf-Rahrov may have been able to perform the essential functions of another position, such as a “vacant desk job,” with reasonable accommodation. Then the Court ruled that because Neiman Marcus failed to establish that no such position was available, or that Nadaf-Rahrov could not perform the essential functions of any such position, the lower court should not have dismissed her claims based on her own admissions regarding her physical limitations.

During discovery, the lower court ordered Neiman Marcus to produce a list of all vacant positions at the stores where Nadaf-Rahrov had worked through November 2004 (Nadaf-Rahrov initially requested information regarding all open positions throughout the country). Based on the list, Nadaf-Rahrov’s health care provider provided a declaration stating that Nadaf-Rahrov could have performed the essential functions of several of the positions, even with her physical restrictions. The declaration did not persuade the lower court.

However, on appeal, the Court ruled that even though Nadaf-Rahrov contradicted her health care provider’s declaration by testifying that she could not perform the duties of many of the positions (even with an accommodation), the health care provider’s opinion should not have been disregarded. The Court reasoned that an individual’s tolerance for pain is subjective, and a patient may decide she cannot perform duties that a health care provider opines she is technically capable of performing.

After taking great pains to reconcile Nadaf-Rahrov’s admissions with her health care provider’s conflicting medical certifications and subsequent declaration, the Court concluded that it may have been a reasonable accommodation for Neiman Marcus to extend Nadaf-Rahrov’s leave of absence for a limited period until an appropriate position became available, particularly if the organization could have anticipated the future openings at the time of her termination.

The Court’s holding is significant because it is inconsistent with prior cases holding that an employer’s duty to reasonably accommodate generally does not include providing a disabled employee an indefinite leave of absence. Rather than evaluating whether Nadaf-Rahrov’s return to work was reasonably definite, the Court focused instead on whether a suitable position for her might become available at some point in the future.

The Court also directed the lower court to reconsider its earlier discovery ruling regarding Nadaf-Rahrov’s request for a list of every available position across the country as of November 2004 (three months after her termination). The lower court had narrowed the scope of the request to the two stores where Nadaf-Rahrov had worked. The Court of Appeal determined this was too restrictive, and directed the lower court to reconsider the issue.

Lessons for Employers

The Neiman Marcus decision contains several lessons for employers. First, it generally highlights the importance of exhausting all potential reasonable accommodations during the interactive process, regardless of the information provided by the employee or the employee’s health care provider.

In addition, before terminating an employee in the circumstances Neiman Marcus faced, an employer must exhaust all possible accommodations with the employee. The employee should be given the opportunity to request any accommodations that may allow her to return to work now or in the reasonably foreseeable future. This should include providing information regarding all currently available openings (excluding promotional opportunities) so the employee may discuss the duties of those positions with her health care provider and assess whether she can perform the essential functions, with or without a reasonable accommodation. In situations involving employees with a history like Nadaf-Rahov, this process can and should take place before the employee is released to return to work.

Finally, the Neiman Marcus decision is a reminder that when evaluating whether alternative positions may constitute a reasonable accommodation, certain geographic or temporal restrictions may be inappropriate. The Court of Appeal disapproved of restricting the consideration of alternative positions to those stores where Nadaf-Rahrov had worked. The Court also recognized the need in certain circumstances for employers to anticipate future openings before deciding there are no available positions consistent with an employee’s medical limitations.

Although the Neiman Marcus decision provides helpful guidance regarding the scope of an employer’s duty to reasonably accommodate employees on extended leaves of absence, this area of the law is still developing and can be confusing. Employers facing these issues must ensure compliance with their internal policies and procedures and understand the scope of their legal responsibilities.

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