One of the most difficult questions California employers face is whether an employee’s troubling behavior should be treated as misconduct or as a possible sign of a disability.

Respond too quickly with discipline, and an employer may overlook its obligations under the Fair Employment and Housing Act (FEHA). Wait too long to address serious misconduct, and the employer risks disrupting the workplace, compromising safety, and undermining accountability.

A recent California Court of Appeal decision illustrates just how difficult this balance can be and offers several important lessons for California employers.

The Case Was Not Really About Misconduct

At first glance, the case appeared to center on an employee’s behavior. But the court’s analysis focused on a different question: What did the employer know, and when did it know it?

Under the FEHA, an employer’s obligation to engage in the interactive process generally arises when it knows—or reasonably should know—that an employee may have a disability requiring accommodation.

That does not mean every difficult employee has a disability.

Nor does it mean every unusual behavior requires an accommodation.

Instead, the employer must evaluate the information available at the time and determine whether there are sufficient facts to suggest a medical or mental health condition may be affecting the employee’s conduct.

Notice Does Not Always Come from a Doctor

Many employers assume they have no accommodation obligations until an employee presents medical documentation or specifically requests an accommodation. But California law is not that simple.

Notice may arise from many different sources, including:

• Statements made by the employee
• Information provided by family members
• Prior medical disclosures
• Observable changes in behavior
• Workplace conversations that reasonably suggest a medical condition may be involved

The court’s decision serves as a reminder that employers should not focus solely on whether the employee used the words “reasonable accommodation.”

The real question is whether the employer had enough information to recognize that further inquiry might be appropriate.

Misconduct Can Still Be Misconduct

One point that is often misunderstood is that the FEHA does not require employers to excuse workplace misconduct simply because a disability may exist.

Employees remain responsible for complying with legitimate workplace rules, performing the essential functions of their jobs, and maintaining appropriate workplace conduct.

If an employee violates workplace policies, discipline may still be appropriate.

The mistake employers sometimes make is assuming that misconduct automatically ends the disability analysis. But that’s not correct.

When the circumstances suggest the behavior may be connected to a disability, employers should consider whether additional inquiry or the interactive process is warranted before making a final employment decision.

The Interactive Process is Not Automatic

The court did not suggest that employers must initiate the interactive process every time an employee behaves poorly.

Instead, employers should evaluate the facts objectively.

Questions worth asking include:

• Is this behavior new or out of character?
• Has the employee disclosed a medical condition in the past?
• Has the employee—or someone acting on the employee’s behalf—raised health concerns?
• Is there information suggesting the behavior may have a medical explanation?
• Have we gathered enough information before making a significant employment decision?

The answers will differ in every case, which is why individualized assessment remains one of the FEHA’s central principles.

Documentation Often Determines the Outcome

Cases involving behavioral issues frequently turn on documentation.

Employers should document objective observations rather than conclusions.

For example, instead of writing that an employee was “unstable,” document the specific conduct that occurred, when it occurred, who observed it, and how it affected the workplace.

Similarly, document conversations with the employee, information received about possible medical issues, the steps taken to evaluate the situation, and the reasons supporting the ultimate decision.

Objective documentation demonstrates thoughtful decision-making and often becomes critical evidence if litigation follows.

Train Supervisors to Recognize When to Pause

Supervisors are usually the first people to observe changes in employee behavior.

They are not expected to diagnose medical conditions—and they should never attempt to do so.

Their responsibility is much simpler: Recognize when unusual circumstances may require HR involvement before significant disciplinary action is taken.

A supervisor who immediately contacts HR after observing concerning behavior may prevent an expensive legal dispute months or years later.

Bottom Line

The recent decision reinforces an important principle: employers do not have to choose between enforcing workplace standards and complying with disability accommodation laws. They must do both.

The key is recognizing when employee misconduct may also raise questions about a potential disability and taking the time to evaluate those questions before making significant employment decisions.

For California employers, the safest approach is neither to assume every behavioral problem is a disability nor to dismiss the possibility too quickly. A careful, individualized analysis remains the best way to reduce legal risk while maintaining a safe, productive, and accountable workplace.

Want to Learn More?

Managing leaves of absence and reasonable accommodations is one of the most challenging areas of employment law, especially as legal requirements continue to evolve. If you’d like a deeper dive into advanced leave management strategies, join us for our Effectively Managing Leaves of Absence and Reasonable Accommodations: Intensive Workshop (Advanced Topics). This interactive two-day program covers complex real-world scenarios, recent legal developments, and practical tools to help HR professionals and managers navigate even the most difficult situations.

Learn more and register here: Effectively Managing Leaves of Absence and Reasonable Accommodations: Intensive Workshop (Advanced Topics).