Ohio Appellate Court Affirms $250K Jury Verdict for Plaintiff Terminated on Account of Perceived Disability

At the end of last month, a unanimous Montgomery County Court of Appeals affirmed a $250,000 jury verdict in favor of a home health care nurse who had been terminated in July 2011 because she had been prescribed and was wearing a fentanyl patch to cope with pain.  Cavins v. S&B Health Care, Inc., 2015-Ohio-4119.  The court rejected the employer’s challenge to the trial court’s failure to bi-furcate the trial on punitive damages because that alleged error had been waived and was harmless when the jury did not award punitive damages.  It also found that the jury’s decision was supported by sufficient evidence.  The Court found that there was clear evidence that the employer viewed her as being disabled by a drug addiction because it disciplined and suspended her for wearing the patch pending a release from her physician, told her that they perceived her wearing a pain patch as a liability and two executives mentioned it in connection with her termination decision.  With such direct evidence of discrimination, she was not required to prove pretext, but had done so.  The employer could not rely on an “honest belief” defense when it conducted no investigation of the supposed HIPAA violation leading to her termination.  Similarly, the jury could disbelieve the employer based on its disparate treatment of the plaintiff in disciplinary warnings which were also not supported by its written policies.  The employer also failed to prove an accommodation constituted an undue hardship or a direct threat.   The court refused to find judicial estoppel from the plaintiff’s pursuit of a workers’ compensation claim and similarly refused to deduct her workers’ compensation recovery from her back or front pay award based on an application of the collateral source rule to deter discriminatory employers.  Finally, the court found the plaintiff could recover emotional distress damages without expert testimony or evidence of a physical injury.

Background.  According to the court’s lengthy opinion (which necessarily construed the facts in the prevailing plaintiff’s favor), the plaintiff had received above average performance evaluations in the two years prior to her termination.  Her evaluations and the company’s policy manual required that she turn in reports on a weekly basis. However, the evaluation had a handwritten “daily” inserted, which the plaintiff implied was done after her termination.  Her lowest scores in her performance evaluations concerned the inconsistent timeliness of her documentation.  In late 2010, she filed a workers compensation claim based on a deterioration of her arms and wrists from patient charting and the company ultimately arranged for a voice-activated computer to assist with her documentation.  Her supervisor sent her a holiday card to get some rest and not burn out.  While normal full-time employment was 20-25 patients/week, she generally had a much heavier workload, covering for other employees and working every holiday since she was hired.  For example, she saw 13 patients on July 4 shortly before she was fired.  In early January, her car was hit from behind while she was travelling to see a patient.   Although she was in pain, she continued to work because she could not afford to take time off.  In late May, she was given a written warning for untimely documentation and was reminded in writing that her documentation was due at 8 a.m. on Monday mornings (i.e., weekly).   She responded that she would try harder, but was in pain. On June 2, she was involved in another car accident while her daughter was driving.  After seeing to her daughter’s broken arm, she went to a different hospital the next day and claimed to have notified her employer (which denied knowing about this second accident).

On July 1, the plaintiff was prescribed a fentanyl patch for her pain.  There were no complaints about her performance after she began wearing the patch.   She requested and received approval to take July 8 off work for her birthday.  She subsequently emailed her supervisor that she had found others to cover for her on July 9 and 10 as well.  In the interim, a co-worker notified a supervisor that the plaintiff sounded impaired on the telephone and admitted to wearing a morphine patch.  This inaccurate information was relayed to a vice president, Human Resources, and the company’s lawyer.  The following day, another employee also claimed that she had slurred speech, and the plaintiff later explained that she had been up all night trying to catch up with her patient documentation and had not been wearing the patch at the time.  (Her all-nighter was confirmed in an email she sent at 6:33 a.m. to her manager).  

When the plaintiff reported to work on July 11, she was given three written warnings and suspended.  The first written warning was dated on July 7 and was for failing to notify management about her pain patch, even though the cited policy only prohibited the use of illegal drugs, alcohol or control substances which could affect employee performance or safety.  She was not permitted to return to work until her physician confirmed in writing that she could safely drive and perform her job.  The second warning was also dated July 7 and concerned the tardy submission of reports, which she had been submitting on Sunday night or early Monday morning instead of daily.  It reflected a performance plan and threatened to terminate her if she did not improve.  She refused to sign it since her most recent warning had only required her to submit weekly reports and she was not yet late with the reports from the prior week as alleged.   The third written warning was for failing to use the proper form to request time off for July 8.  However, the plaintiff denied knowing about such a policy or forms and the company never produced a copy of any such policy or forms at trial (which strongly suggests that they do not exist).  There was evidence that other employees had requested and received time off without such forms and never been disciplined.  The plaintiff returned to work on July 18 after her physician released her without restrictions.  Nonetheless, she was told that she was a liability while she wore her pain patch.  She subsequently offered to stop wearing it if the company and its attorney remained concerned, but her email received no response.  The next day, the company claimed that an anonymous employee told it that the plaintiff had secretly contacted a former patient.  Without any investigation, the decision was made to terminate the plaintiff.  At trial, the employer was unable to identify any employees or patients with knowledge that the plaintiff had improperly contacted them.   They arrived at her home (because she had called off sick) but she did not answer the door.  When the plaintiff emailed her supervisor that she thought that she would be off sick for less than two weeks, she was notified that she had been terminated and an employee was sent to pick up her equipment.  The company executives testified to different reasons for her termination, but two of them referred to her fentanyl patch. 

The plaintiff ultimately produced a physician note that should return to work on August 1, but in light of her termination did not work for two years.  During workers compensation litigation, the plaintiff received her termination documentation for the first time and it listed only a HIPAA violation (for contacting a former patient) and nothing about the fentanyl patch.  She returned to work on modified duty in 2014 for another employer.  In the meantime, she filed suit concerning her termination.  After trial, a jury awarded her $125,000 in back pay, $75,000 for front pay and $50,000 in compensatory damages, but denied punitive damages.  The employer appealed.

Failure to bifurcate was harmless error.  The appellate court rejected the employer’s argument that the trial should have been bifurcated because it was waived at trial (when the attorneys failed to have the jury instruction conference transcribed and included in the record) and any error was harmless in that the jury did not award punitive damages.

Direct Evidence that Perceived Disability Motivated Termination Decision.  The Court found substantial evidence that the plaintiff had been perceived as disabled on account of wearing her fentanyl patch and that the jury was in the best position to evaluate the credibility of the witnesses.  It noted that Ohio law and the ADAA only require evidence that the employer views an employee as impaired and does not require evidence that the employer perceived that impairment as substantially limiting a major life activity.   Accordingly, when the employer took adverse action against the plaintiff on account of the fact that she sometimes wore a fentanyl patch to treat the pain she suffered from two automobile accidents, it constituted direct evidence that the employer perceived her as disabled under Ohio law:

[The plaintiff] was taking measures (prescription medication) to correct or mitigate an underlying physical condition – injuries caused by one or more auto accidents. Accordingly, there was sufficient evidence to allow the jury to conclude that Cavins was perceived as disabled within the meaning of R.C. 4112.02(A)(1) and R.C. 4112.01(A)(13).

Indeed, the jury was not even required to infer that the plaintiff’s impairment played a part in the decision to terminate her because two of the company’s executives admitted as much.

No judicial estoppel from pursuing workers’ compensation claim.  In a rather confusing discussion, the court addressed the issue of whether the plaintiff had been qualified to perform her duties immediately prior to her termination, particularly in light of the fact that she did not work for two years following her termination and had submitted documentation that she had been unable to work because of her workers’ compensation injury.  First, the court noted that she had produced return-to-work notes on July 18 (and actually worked a few days thereafter before getting sick again) and had been released to return to work on August 1 (after her termination).  Second, the plaintiff also testified that her duties did not require her to lift patients.   Third, the court rejected the concept of judicial estoppel to preclude the plaintiff from contending that she could work (in order to recover back and front pay) while she was contending in different proceedings that she was entitled to workers’ compensation because she was unable to work.  The court did so because she had never made any representations to the BWC under oath (as required for judicial estoppel to apply).  Moreover, the court found that she was qualified to perform her job at the time she was terminated (in light of two medical releases) and could have continued to do perform her duties with a reasonable accommodation (of wearing her fentanyl patch).

Reasonableness of accommodation.  The court found that permitting the plaintiff to wear the patch was a reasonable accommodation because the employer had indicated that she could do so if her physician confirmed that she could safely drive and perform her duties while wearing it.

Pretext Evidence Not Required.  The court also rejected the employer’s argument that the plaintiff failed to show that the documented reason for terminating her – an alleged HIPAA violation and prior disciplinary history – was pretextual.  The Court found that the plaintiff was not required to prove pretext because she had produced sufficient direct evidence of discrimination when two executives admitted that her fentanyl patch was a motivating factor in her termination.  When direct evidence exists, the burden-shifting framework in cases of indirect evidence does not apply.   At that point, the employer could only prevail if it could prove undue hardship or a direct threat.  It could do neither.  In particular, its July 11 suspension of the plaintiff – until she could produce medical documentation that she could safely perform her job duties and drive – demonstrated the reasonableness of that reasonable accommodation.  The employer could not challenge the reasonableness of that accommodation upon her return to work without further investigation, which it failed to do before terminating her a few days after she returned to work.   

Pretext Proven.  In any event, the court found sufficient evidence of pretext on the record.  The plaintiff denied that she had violated HIPAA or contacted a former patient as alleged.  In contrast, the employer’s only evidence was that an anonymous employee supposedly told it of the violation.   This was not corroborated by the employee or the patient.  Accordingly, the jury was free to disregard the employer’s testimony.  Moreover, the employer could not rely on an honest belief defense because it conducted no investigation whatsoever of the anonymous tip; it did not contact any former patients or even confront the plaintiff with the allegation.  In addition, the management employees contradicted each other as to whether the fentanyl patch was a factor in the termination decision.   Finally, the fact that the plaintiff was terminated just a few days after she had been told that her wearing the fentanyl patch was a liability further undermined the legitimacy of the purported HIPAA explanation. 

With respect to the consideration of her prior disciplinary history, there was evidence to show that her disciplinary warnings were not supported by any written company policies and that she had been treated differently than other employees on those issues:

Moreover, even if one assumes that the basis for the termination included the prior disciplinary actions, there was evidence that these alleged violations were not actual violations of Black Stone policy, or that other employees were not similarly disciplined. In short, the record contains evidence that Black Stone’s actions were poorly documented, and that its policies were inaccurately and inconsistently applied. For example, although Black Stone disciplined Cavins for failing to request a day off in writing, the company failed to submit evidence of a written policy or form to this effect, and there was evidence from an employee other than Cavins that she had been allowed to submit an oral vacation request without being disciplined. Cavins also testified that she had never been required to submit a written request. Again, the jury was permitted to believe Cavins’ evidence.

The court also found the jury was entitled to disbelieve the employer about the documentation requirements.  The employer contended that she had for years been required to submit it daily, not weekly as the plaintiff contended.  She testified that July 11 was the first time she had been told it was due daily.   She was corroborated by the fact that the policy manual said weekly and her May 2011 written warning also said weekly.  The employer contended that the May 2011 warning had been a mistake and pointed to handwritten notes on her last performance evaluation referring to daily documentation.  However, the plaintiff denied that “daily” had been written on the evaluation when she received it.

The court also found that the jury was entitled to disbelieve the employer about whether the plaintiff had violated any policy by failing to report her prescribed fentanyl patch since the policy only referred to a prohibition against using illegal drugs, alcohol and controlled substances that would interfere with job performance.  There was no reporting requirement mentioned in the policy.

‘An employer's changing rationale for making an adverse employment decision can be evidence of pretext’ to establish discrimination.” Sells v. Holiday Mgt. Ltd., 10th Dist. Franklin No. 11AP-205, 2011-Ohio-5974, ¶ 27, quoting Thurman v. Yellow Freight Sys., Inc., 90 F.3d 1160, 1167 (6th Cir.1996), amended on other grounds, 97 F.3d 833 (6th Cir.1996). “The factfinder is entitled to infer from any ‘weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions’ in the employer's proffered reasons for its action that the employer did not act pursuant to those reasons * * * . If the factfinder concludes that one of the employer's reasons is disingenuous, it is reasonable for it to consider this in assessing the credibility of the employer's other proffered reasons.”

Mitigation.  The court also rejected the employer’s argument that the plaintiff was not entitled to so much back pay because she failed to mitigate damages and had recovered workers’ compensation during the same period because she was purportedly unable to work.  Again, the court rejected a judicial estoppel argument because she might have been able to work with a reasonable accommodation.  The court also found the mitigation affirmative defense was waived because there no was argument about it in closing statements and it failed to object to the exclusion of its proposed jury instruction.  As with the bifurcation issue, it was an error to not transcribe the jury instruction conference and include on appeal.  Failing to include a mitigation jury instruction could not be a plain error because the collateral source rule precludes consideration on the receipt of unemployment or workers’ compensation in a discrimination case, in part to further deter discriminatory employer misconduct.  In any event, the employer bore the burden on this affirmative defense and it failed to introduce any evidence about jobs which had been available that the plaintiff could have performed.   Finally, the amount of back and front pay awarded by the jury was well below the plaintiff’s estimates of what she would have earned if she had not been terminated.

Compensatory Damages for Emotional Distress.  The court rejected the employer’s argument that the plaintiff could not recover for emotional distress without expert testimony or a contemporaneous physical injury. “Under Ohio law, even without proof of contemporaneous physical injury, one may recover for mental anguish, humiliation or embarrassment.”

 

At trial, Cavins testified that she had been forced to file for bankruptcy as a result of the termination and her resulting loss of income. Cavins further testified that in addition to incurring filing fees for the bankruptcy, her relationships with creditors and others had been affected. She also stated that she was humiliated. In addition, Cavins testified about stress and stomach issues while she worked at Black Stone, due to her employers’ attitude.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

  

Franklin County Appellate Court: Continued Receipt of TTD is Incompatible with Application to Return to Work from Disability Leave

Last week, the Franklin County Court of Appeals affirmed the denial of an administrative appeal from a SPBR decision which had denied reinstatement from a disability leave to a court probation officer who still received Temporary Total Disability (TTD) workers compensation four months after applying for reinstatement. Ewell v. Montgomery Cty. Court of Common Pleas, 2014-Ohio-3047.   “[E]vidence of the receipt of TTD at the time an employee applies for reinstatement from an IDS is reliable, probative, and substantial evidence that an employee is unable to return to work since the very statutory definition of TTD requires that the employee's treating physician continue to determine the employee is medically unable to perform his or her job duties.”

 According to the Court’s well-written opinion, the employee incurred a work related injury and began a disability leave in September 2008.   The employer then initiated a disability separation.   Under the employer’s policy, he had three years to seek reinstatement.    The employee applied for reinstatement on September 8, 2011 with a medical statement from his physician indicating that he could return to work without any medical restrictions.  Nonetheless, he continued to submit statements to the BWC indicating that he could not perform his job.  Accordingly, at the reinstatement hearing (held on January 18, 2012), his employer declined to consider the medical evidence that he submitted and, instead, focused on the information he continued to provide to the BWC about his inability to work.  He had received his most recent TTD payment just a week before the hearing.  Refusing to reinstate an employee who claims that he can return to work while the same employee provides information to the BWC that he cannot work was not an inappropriate decision.  It probably did not help the employee’s cause that he failed to seek reinstatement until the very last day of his leave period.

In fact, here, appellant continued to submit requests for TTD compensation to the BWC after he applied for reinstatement from his IDS. Appellant's treating physician reported to appellee that appellant was able to return to work as of September 7, 2011 for purposes of reinstatement from his IDS, but appellant reported to the BWC that, based on reports of medical evaluations conducted September 12, 13 and 14, 2011, appellant was unable to return to work for purposes of receiving continued TTD payments. Logically, these two positions are incompatible.

The Court found a similar case where the employee was still receiving disability pay through DAS to be factually distinguishable because the TTD standard differs from the DAS standard.

What was not discussed, or apparently argued, is how this case would turn out if the pro se employee had argued that he was entitled to reinstatement under the ADAA if his physician indicated that he could return to work and the employee requested a modification of the employer’s three-year leave cap. The EEOC has been filing suit against other employers with inflexible leave cap policies.  Of course, the federal courts have adopted similar arguments of judicial estoppel concerning the receipt of social security income while simultaneously arguing the ability to perform essential job duties.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Reverses Denial of LTD Based on File Reviews That Questioned Claimant’s Credibility and Mental Health

Last week, the Sixth Circuit reversed the denial of the first year of LTD benefits to a Central Ohio employee when the denial was based entirely on reviews of the medical file which questioned the lack of an objective cause for the claimant’s back pain and the subjective evaluation of his mental impairments.  Javery v. Lucent Technologies Inc. Long Term Disability Plan for Management or LBA Employees, No. 12-3834 (6^th Cir. 2-3-14).  The LTD Plan utilized two standards for benefits depending on whether the claim encompassed the first year (a lesser standard) or thereafter.  The employee’s LTD application, which was filed in November 2005, involved a long and tortuous history through the internal review process and two appeals to federal court.  One of his attorneys neglected to include the claim in his 2007 bankruptcy petition, but the federal courts declined to apply the judicial estoppel doctrine to bar his ERISA appeal.  The LTD Plan Administrator relied on file reviews by a staff nurse, staff physician and independent physicians to deny the employee’s application under the lesser first-year standard.  Ultimately, the Sixth Circuit concluded that the rationale for Plan’s decision lacked sufficient weight to counter the overwhelming medical evidence provided by the employee showing that he was unable to work due to a combination of his mental and physical impairments. File reviews are rarely appropriate or sufficient when the Plan is evaluating mental health or questions the claimant’s credibility.

According to the Court’s opinion, the plaintiff began working for the employer in 1998 as a software engineer and his job required him to sit for 8-10 hours/day and about 70 hours/week. By 2005, his physician advised him to stop working because of significant back pain for which he was taking medication.  He received STD and then applied for LTD under his employer’s plan, which provided that for the first year he would be considered to be disabled if was unable (for other than an injury covered by workers compensation) to engage “in his  . . .  occupation or employment at the Company, for which the eligible employee is qualified, based on training, education or experience.” (emphasis added).  After his initial claim was denied, he submitted medical documentation concerning his degenerative diseased discs and how the medication disoriented him and impaired his cognitive abilities.  While his physician believed returning to work would be in his best interests, he could not sit for prolonged periods.   An IME revealed no neurological basis for the pain, but suspected psychogenic factors.  

The Plan Administrator’s nurse manager reviewed the file and denied the appeal because that the plaintiff should be able to perform a sedentary occupation. The Plan Administrator explained that his claim was denied because his back pain did not make him unable “to work throughout your entire Benefit Waiting Period.”   At this point, the plaintiff retained an attorney and appealed again.  Additional medical evidence was submitted, as well as an explanation that the employer refused to provide certain accommodations (such as reduced working hours, etc.).  A physician employed by the Plan Administrator reviewed the file and saw no clinical basis to support his claimed back pain.  The Plan Administrator again denied the appeal and noted, among other things, that no mental status tests had been administered to document a cognitive impairment.  Again, the plaintiff appealed and submitted detailed psychological records.  After his final appeal was denied in January 2007, the plaintiff filed for bankruptcy 10 months later and in January 2009 sought review under ERISA of his LTD application in federal court.

 

The district court reviewed the plaintiff’s file de novo and in March 2011 remanded it back to the Plan Administrator for reconsideration of his mental impairment.  The plaintiff again submitted additional medical records concerning his sleep apnea and hospitalizations for mental illness, MRIs, CT scans, and a determination by the Social Security Administration that he was totally disabled from working at any job.  The Plan Administrator hired an independent neurologist and psychiatrist to review his files, but, although it had the right, did not request a medical evaluation.  Again, the Plan Administrator denied the plaintiff’s claim, and he re-activated the federal action for another appeal under ERISA.  This time, the court granted summary judgment to the Plan Administrator and the plaintiff appealed.

 

On appeal, the Plan argued that the plaintiff should be precluded from pursuing the appeal because his bankruptcy petition did not list the claim on his schedule of assets. The plaintiff showed that the mistake had been inadvertent because he had communicated the claim to his bankruptcy attorney.  The trial court refused to apply the judicial estoppel doctrine, which precludes a party from taking contradictory positions in different litigation.  Although the Sixth Circuit noted there was some authority that judicial estoppels should be reviewed on an abuse of discretion basis, it applied a de novo review. “We have made clear that “judicial estoppel does not apply where the prior inconsistent position occurred because of ‘mistake or inadvertence.’”  Moreover, in this case, the plaintiff lacked a motive to conceal the LTD claim from creditors: “[U]nder Ohio laws, proceeds from a disability insurance policy are completely exempt from a debtor’s estate (i.e., set aside for the benefit of the debtor) to the extent that they are necessary for the support of the debtor and his family.” 

The trial and appellate courts applied a de novo standard of review of the plaintiff’s LTD claim in this case because, as the Plan’s attorneys conceded at oral argument, the Administrator’s decision was not entitled to deference.  The Court concluded that the plaintiff had proved that he was unable to work as a software engineer for the first year of his LTD application based on a review of his job and the medical evidence.

 

Both parties agree that Plaintiff’s job as a software engineer was technically and intellectually demanding and required sitting for prolonged periods of time.

 . . . The medical evidence in the administrative record indicates that a combination of extreme pain, and mental illness, and the effects of pain medication made it exceedingly difficult for Plaintiff to concentrate, handle stress, stay awake during the day, remember things, relate to co-workers, make decisions, or sit for any extended period of time.

Three treating physicians concluded he was unable to work. In addition,  

[o]f the two psychiatrists who evaluated Plaintiff in 2006, one determined that he was seriously mentally ill and incapable of working, and the other found substantial impairment in Plaintiff’s ability to sustain the stress and pressure of day-to-day work. Their diagnoses were confirmed shortly thereafter by Dr. Borders, a psychiatrist at Shepherd Hill behavioral health facility, when Plaintiff was hospitalized for twelve days for mental illness in an acute in-patient unit in September 2006.

The Court found that the opinions of the Plan’s medical experts were insufficient to counter the plaintiff’s medical file.  While none of them found an objective basis for the plaintiff’s back pain, one of them suspected a mental cause.  Another physician complained about the lack of objective evidence and then overlooked such evidence in the file.  For example, he complained about the lack of psychological tests and then overlooked such a test that had diagnosed severe depression.  He also noted that non-mental health providers had not provided information about his mental health when, in fact, they had.  Finally, he had ignored the requirements of the plaintiff’s software engineer position.

First, file reviews are questionable as a basis for identifying whether an individual is disabled by mental illness. See Smith v. Bayer Corp. Long Term Disability Plan, 275 F. App’x 495, 505–09 (6th Cir. 2008) (noting that “[c]ourts discount the opinions of psychiatrists who have never seen the patient for obvious reasons”).  Second, reliance on a file review is inappropriate where a claims administrator disputes the credibility of a claimant’s complaints.

 . . . .

Plaintiff submitted medical evidence from numerous doctors and therapists who directly treated or examined him and concluded that he was unable to work due to a combination of his physical and mental conditions. He visited over a dozen medical experts. Those doctors who knew him best concluded, unequivocally, that he was unable to work at the relevant time.  Defendant offers little to contradict this evidence. Accordingly, Plaintiff is entitled to disability benefits for the relevant period.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.