Be Prepared…Litigation is Often the Ultimate Reality; First Disability Accommodation Lawsuit; Understanding The Gender Dysphoria Legal Background; Award for Nina Ginsberg
By: Anne Cullen
Law360 (September 9, 2021, 6:36 PM EDT) — The U.S. Equal Employment Opportunity Commission’s first disability accommodation lawsuit tied to the pandemic sheds light on how businesses can handle the ongoing surge in telework requests without violating anti-discrimination law, experts say.
In the lawsuit, which was filed Tuesday, the workplace bias watchdog said a Denmark-based facilities company illegally rejected a telework request from an employee whose lung disease put her at higher risk of severe complications from COVID-19.
The agency accused ISS Facility Services of violating the Americans with Disabilities Act when it refused to let former company health and safety manager Ronisha Moncrief work from home two days a week in mid-2020. Moncrief has obstructive lung disease, which places her at higher risk of complications from COVID-19, according to the agency’s complaint.
The case marks the first time the agency has taken a company to court over a pandemic-related request for an accommodation under the ADA, and experts say company leaders and their legal counsel should be following the proceedings closely.
“I think this is one that all employment lawyers should be watching to see how this all plays out,” said disability law expert Jonathan Mook of DiMuroGinsberg PC. “It may well end up as a template for litigating these kinds of cases.”
The lawsuit offers employers a blueprint for steering clear of disability discrimination as they continue to handle employees’ telework requests, experts said.
“This is one to watch because it will very likely — if it ends up making law, as opposed to being resolved early — set the stage for how far an employer may need to flex when it comes to work from home,” said Littler Mendelson PC shareholder Michelle Barrett Falconer, who co-chairs the firm’s leaves of absence and disability accommodation practice group. While the case is just getting started, here are four things employers can learn from the legal
Claims Over Denied Telework Abound
The allegations in the EEOC’s new lawsuit are not uncommon, and experts said the agency’s intervention in this space indicates that more suits with these types of claims will surface, both from the agency and private litigants.
“There’s going to be an avalanche of these types of cases as employers start bringing employees back to work physically at the worksite,” Mook said. Plus, he added, more claims will land in federal courts as they percolate through the EEOC’s administrative process from recall efforts that started last year.
His prediction is backed up by a recent survey from management-side firm Fisher Phillips, which found there’s been a general trend of increased litigation around the pandemic during the summer, with claims surrounding remote work and leave making up about a third of the total.
The firm also forecasted a steady increase in COVID-19 lawsuits filed by employees across the country. Mook said the litigation also makes clear that this is a space the agency is eyeing closely and
could crack down on.
“The EEOC is sending a signal that they’re serious about these cases, and they’re going to start taking a hard look at employers taking the position that employees who have disabling conditions no longer can continue working at home,” he said.
An EEOC spokesperson declined to comment on the allegations in the lawsuit or whether more similar suits were in the pike, but told Law360 on Thursday that “the COVID-19 pandemic is a health crisis with immense civil rights implications.”
“The economic fallout is disproportionately affecting vulnerable workers, including those with disabilities, and has serious workplace implications,” said agency spokesperson Christine Saah Nazer. “Employers must remain vigilant in ensuring that they maintain a discrimination-free workplace.”
If Recalling Workers, Have a Good Reason Employment lawyers said the lawsuit reminds businesses that they need to have a solid rationale for recalling their workers from a remote arrangement if their job doesn’t require them to be
“It’s a good warning to employers to be careful about flat rules about requiring people to come back to the office,” said Constangy Brooks Smith & Prophete LLP partner Robin E. Shea. In the agency’s lawsuit, it argued that Moncrief had a legitimate basis to keep clocking in from home and had provided documents to ISS Facility Services supporting her reasoning.
She offered documentation to the company showing she needed the accommodation because her severe pulmonary disease placed her at a high-risk for contracting COVID-19, according to the lawsuit. When she was on-site, Moncrief often had close contact with colleagues, sometimes sharing a desk with co-workers, the agency said.
The agency also noted that working from home helped Moncrief manage her condition, but the company rejected her request to work from home two days a week. While ISS Facility Services has not yet responded to the lawsuit and did not respond to multiple requests for comment, experts said the case shows that it’s crucial company leaders have a solid defense for denying a disabled worker’s petition to telework.
“It does confirm what we’ve been saying all along, it’s going to be incredibly difficult for employers to justify no further telework,” said Littler’s Falconer. Calling workers back in because that’s how things used to be is not a good enough reason; company leaders should have a well-thought-out, documented rationale for why employees need
“They may have reasons,” Falconer said. “But the idea of, we just want everybody in the office, is not going to be an argument that will easily win the day.”
Consider Pandemic Experience in Analysis
The suit also serves as a reminder that company leaders who had everyone clock in from home at some point in the pandemic should take into consideration how their workers fared during this period when they evaluate requests to continue the arrangement, experts said.
The EEOC said in its lawsuit that Moncrief had worked from home four days per week after the U.S. first shut down due to COVID-19 in early 2020, but was later denied a similar, pared-down arrangement when the company sought to recall some of its workforce.
Two months after she asked to continue a partially remote arrangement, she was sacked for purported performance issues, according to the complaint, though the agency also noted that in the months leading up to her firing, Moncrief had performed well for the company, increasing employee training facilitywide.
The allegations may indicate that Moncrief had successfully completed her work during the initial telework period, something the agency has advised should be taken into consideration when evaluating continued remote work requests.
Guidance the EEOC put out a year ago said pandemic telework experiences can serve as a “trial period that showed whether or not this employee with a disability could satisfactorily perform all essential functions while working remotely,” and companies “should consider any new requests in light of this information.”
DiMuroGinsberg’s Mook said this week’s lawsuit indicates that the agency wants employers to heed this advice.
“The signal they’re sending is employers need to be careful,” he said. “It isn’t the old way of operating in terms of telework as a reasonable accommodation.”
Back to Basics
However, despite the use of potential new factors in the calculus, Jackson Lewis PC principal Jenifer Bologna said this case makes clear to her that company leaders need to ensure they’re handling reasonable accommodation requests following the traditional, fact-specific process.
“Employers should be evaluating claims the way they would any other request for a reasonable accommodation under the ADA, and I think that’s really the important takeaway,” said Bologna, who specializes in disability and leave management issues.
“When it comes to requests for accommodations, the standard rules apply,” she said. The agency’s longstanding guidance on evaluating an accommodation request starts with a discussion on the nature of a worker’s disability and how it limits their ability to do their job.
The EEOC’s running bulletin on best practices for companies balancing pandemic issues with the needs of disabled workers reiterates the standard rules. In it, the agency has laid out a list of discussion items that employers should run through with an employee when evaluating the viability of a remote work arrangement.
It’s important to understand how the worker’s disability limits their ability to come into the office, how telework could help the problem, whether another arrangement could be the solution and if the worker can get their fundamental job duties done while at home, according to the agency’s guidance.
Bologna said employers need to make sure their conversations follow this blueprint. “Each situation is different, but it’s truly back to basics,” she said. “There is so much new with COVID, so many new concepts, but this is a circle back to our traditional accommodation process.”
— Additional reporting by Amanda Ottaway. Editing by Abbie Sarfo.
By: Anne Cullen
Law360 (July 12, 2021, 6:49 PM EDT) — Despite some major carveouts in the Americans with Disabilities Act surrounding transgender individuals, federal district courts are increasingly endorsing the claim that gender dysphoria merits protections under the federal anti-discrimination law.
Medical research makes clear that the condition can be severely disabling, as the American Psychiatric Association defines gender dysphoria as clinically significant distress or impairment related to a strong desire to be of another gender, and says it can interfere with someone’s social life, their ability to do their job as well as other important daily functions.
However, part of the ADA that hasn’t been touched since it was written three decades ago makes clear that “transvestism,” “transsexualism,” and “gender identity disorders not resulting from physical impairments” do not qualify as disabilities.
These “conditions” are lumped among a crop of others that lawmakers said don’t make the cut, including pedophilia, exhibitionism, voyeurism, compulsive gambling, kleptomania, and pyromania.
While some attorneys say the outdated section of the law gives transgender individuals a steep hill to climb when they want to bring a gender dysphoria bias claim in court, many courts that have actually grappled with this question cleared these allegations to move ahead.
“There’s overwhelming support by courts for coverage of gender dysphoria under the ADA and the Rehab Act,” said Quinnipiac University associate dean and disability law professor Kevin M. Barry, who has penned academic papers and court filings on the issue.
Case law does appear to be trending in one direction, but this area of law is still unsettled; a Law360 analysis found that federal district courts have issued fewer than two dozen decisions on the issue — primarily in prisoners’ rights cases — and the question has not yet been tackled by an appeals court.
The issue will continue to crop up, experts predict, potentially forcing courts to solidify the legal landscape one way or the other.
“It’s certainly an emerging issue under the ADA that I think practitioners are going to be confronting in the future,” said disability law expert Jonathan Mook of DiMuroGinsberg PC. Here Law360 takes a look at where the law stands when it comes to the status of gender dysphoria under the ADA and its federal sector counterpart, the Rehabilitation Act.
Seminal Blatt Case Makes Waves
While the law specifically excludes certain “gender identity disorders,” a Pennsylvania federal judge created a stir in 2017 when he declared that gender dysphoria sits outside that category.
The decision, Blatt v. Cabela’s Retail Inc. , marked the first time a court said gender dysphoria could be a disability under the ADA. U.S. District Judge Joseph F. Leeson Jr. said gender identity disorder narrowly refers to the condition of identifying with a different gender, not the disabling conditions, like gender dysphoria, that might come along with it.
Judge Leeson cleared employment discrimination allegations against sports retailer Cabela’s to move ahead in May 2017, and the case settled shortly after. Quinnipiac University’s Barry, who represented a handful of LGBTQ advocacy organizations that chimed into the case to argue gender dysphoria qualifies as a disability, told Law360 this was the right call.
“The Blatt court said that when the ADA excluded gender identity disorder, what Congress was really excluding was trans identity, and trans identity is not a disability,” he said. “That is true.”
However, other experts aren’t so sure.
Constangy Brooks Smith & Prophete LLP partner Robin E. Shea, who counsels employers, said there’s a strong argument that specific exclusions in the ADA encompass gender dysphoria.
Shea told Law360 that the Blatt case may have gotten it wrong when they decided otherwise. “I think they might have stretched [the ADA] with that decision,” Shea said.
Physical Impairment Theory Wins Court Favor
Though Judge Leeson’s take was the first on the issue, his theory isn’t the one that has taken center stage in the legal battles that have followed.
In the years since the Blatt decision, many of his peers on the federal bench who have concluded gender dysphoria might be a disability under the ADA made their finding based on the statute’s language surrounding “physical impairments.”
Because the law says “gender identity disorders not resulting from physical impairments” do not qualify, a handful of federal courts have found that when someone makes a claim that their gender dysphoria did stem from a physical cause, their condition may merit ADA protection.
Federal courts in Massachusetts, Idaho, Illinois, Florida, and Georgia have all cleared ADA claims relating to gender dysphoria to move ahead based on this theory.
“The piece that a lot of courts are struggling with is this carveout that the ADA contains for gender identity disorders,” said Eckert Seamans member Lindsey Conrad Kennedy, who advises employers. “As we’ve seen pretty recently, courts and plaintiffs are finding ways to get around this carveout.”
U.S. District Judge Richard G. Stearns in Massachusetts was one of the first to take this stance three years ago in a legal battle lodged by a transgender inmate who sued under the pseudonym Jane Doe.
Judge Stearns pointed out in his mid-2018 decision in Doe v. Massachusetts Department ofCorrection that a growing body of medical research shows that gender dysphoria may come from hormonal and genetic drivers.
He ruled that “the continuing re-evaluation of GD underway in the relevant sectors of the medical community is sufficient, for present purposes, to raise a dispute of fact as to whether Doe’s GD falls outside the ADA’s exclusion of gender identity-based disorders as they were understood by Congress 28 years ago.”
A handful of courts have made similar findings in the years following. In Georgia federal court late last year, a federal judge ruled in Lange v. Houston County , Georgia, that a deputy sheriff with gender dysphoria could move ahead with her claim against the county because she had clearly alleged that the condition stems from a physical impairment.
While the county insisted that the employee, Anna Lange, hadn’t shown her specific condition was rooted in any physical cause, U.S. District Judge Marc T. Treadwell said she didn’t need to make this showing to defeat the county’s dismissal bid.
“As a matter of pleading, Lange clearly alleges that she has a condition that results from physical impairment,” Judge Treadwell said. “Because she has alleged that, the court cannot conclude as a matter of law that the statutory exclusion of ‘gender identity disorders’ applies.”
That case is now in the midst of discovery.
And just last month, in Pennsylvania federal court, U.S. District Judge Karen S. Marston cleared an ADA claim against the Hospital of University of Pennsylvania to move ahead on similar lines, citing the Lange decision.
Save for some cases in which a plaintiff — usually those lacking legal counsel — didn’t quite make the “physical impairment” argument clearly and strongly enough, Quinnipiac University’s Barry said courts have nearly universally shown they’re on board with this angle.
“Almost every court that has addressed that issue has accepted that theory of coverage,” Quinnipiac University’s Barry said. “That is the theory that courts are saying is a path by which gender dysphoria finds coverage under the ADA and Rehab Act.”
The federal government has thrown its weight behind this theory too. In a handful of briefs filed in employment, prisoner rights and other civil rights cases over gender dysphoria since 2015, the Department of Justice under both the Obama and Trump administrations interpreted the ADA to cover gender dysphoria because it said the condition may have physical roots.
“While no clear scientific consensus appears to exist regarding the specific origins of genderdysphoria (i.e., whether it can be traced to neurological, genetic or hormonal sources), the current research increasingly indicates that gender dysphoria has physiological or biological roots,” the Justice Department argued in the Blatt case in 2015.
The Justice Department again made the same argument under the Trump administration twoyears later, insisting in a transgender woman’s case over New Jersey’s birth certificate rules that her gender dysphoria counts as a disability because she had plausibly alleged it stemmed from a physical impairment.
Some Gender Dysphoria Bias Claims Shot Down
On the other side of things, courts in Ohio, Alabama and Virginia have rejected some individuals’ claims that their gender dysphoria is protected by the anti-discrimination law, though none of these courts undermined the physical impairment theory.
U.S. District Judge George C. Smith in Ohio primarily took aim at the Blatt decision when he threw out construction worker Tracy Parker’s allegation of disability discrimination based on her gender dysphoria. The judge ruled in 2018 that he can find “no support, textual or otherwise” for the interpretation set out in Blatt.
“The clear result is that Congress intended to exclude from the ADA’s protection both disabling and nondisabling gender identity disorders that do not result from a physical impairment,” he said.
Parker couldn’t move ahead on the physical impairment theory because she’d left that argument out of her complaint, Judge Smith said. While Parker had cited medical research in follow-up filings, Judge Smith said he can’t consider evidence lodged outside her complaint.
In 2019 in Alabama, a federal judge said in a workplace bias case against Northrop Grumman that the terms “gender identity disorder” and “gender dysphoria” are legally synonymous — also countering the Blatt decision — and that there was no physical impairment behind the Northrop Grumman employee’s condition to trigger the ADA.
“A condition of ‘gender dysphoria’ (formerly described as a ‘gender identity disorder’) that does not result from a physical impairment is expressly excluded from the definition of disabilities covered by the Americans with Disabilities Act,” U.S. District Judge C. Lynwood Smith said.
Just last month, a transgender woman who was incarcerated in Virginia wasn’t able to convince a federal judge that her gender dysphoria counted as a disability because she hadn’t made the physical impairment argument either.
“There’s been a new and increasing number of decisions on this topic and courts have really come out in all different directions,” Eckert Seamans’ Kennedy said.
Bostock’s Impact On Gender Dysphoria Case Law
While experts agree this question will crop up more often in the courts, they say the rate at which cases are filed could be affected by how broadly the government and the courts interpret the U.S. Supreme Court’s landmark LBGTQ rights decision in Bostock v. Clayton County.
In the watershed ruling, the justices made clear that Title VII, the federal law barring discrimination in the workplace, bans bias on the basis of gender identity and sexual orientation.
Because transgender workers now have more protections under federal law, DiMuroGinsberg’s Mook said it’s possible that those who suffer from gender dysphoria may choose to sue only under Title VII and forego their ADA claim, potentially leading to a drop-off in the employment-related cases surrounding gender dysphoria.
“Some of the ADA litigation is really going to depend upon how broadly the Title VII protections are interpreted for transgender individuals, the narrower those protections are interpreted to be, litigation under the ADA would be more prominent,” DiMuroGinsberg’s Mook said.
At the moment, the U.S. Equal Employment Opportunity Commission has given Bostock a wide reach, making clear in guidance rolled out this summer that employers must accommodate their LBGTQ employees when it comes to dress codes, pronouns, bathrooms and other issues.
However, this doesn’t mean these claims aren’t still going to bubble up. Earlier this month, a former associate professor at Pennsylvania State University hit the institution with a discrimination lawsuit claiming they were denied tenure because they’re transgender and the school violated the ADA by not accommodating their gender dysphoria.
“I do think we will see more disability claims in the gender dysphoria claims across the board,” said Quinnipiac University’s Barry.
–Additional reporting by Adam Lidgett, Amanda Ottaway, Vin Gurrieri and Braden Campbell. Editing by Vincent Sherry.
Preventing the Spread; Rocket Docket Update; Nina Ginsberg – Lawyer of the Year; COVID-19 Virus Long-Haulers Almost Certain to Find Protection from the ADA; DG/30 Milestone
By: Jonathan R. Mook
As the COVID-19 pandemic continues to wreak havoc across the U.S., especially with the prevalence of the delta variant, an increasing number of individuals still are suffering the long-term health effects of the virus even though they may have initially been infected months ago.
According to the Centers for Disease Control and Prevention, “long COVID” is defined as “new or ongoing symptoms that can last weeks or months after first being infected with the virus that causes COVID-19.”
The precise manner in which infection with the COVID-19 virus can cause such lingering health problems is not precisely known. The relationship between COVID-19 infection and continued negative health effects, however, is becoming increasingly well documented as the impact of long-haul COVID-19 continues to affect individuals in their daily lives both at home and at work.
Indeed, the U.S. Department of Justice has termed “the rise of long COVID as a persistent and significant health issue.”
Legal Implications of Long-Haul COVID-19
The legal implications stemming from the rise of long-haul COVID-19 are now just coming to the fore, especially in terms of whether long-haulers may qualify for protections under the Americans with Disabilities Act.
A few courts have considered whether infection with the COVID-19 virus, in and of itself, is an ADA disability, and in their rulings have held that it is not.
As U.S. District Judge Tilman E. Self of the U.S. District Court for the Middle District of Georgia pointed out in his May decision in Champion v. Mannington Mills Inc., being required to miss work for a number of days or having to quarantine due to a COVID-19 positive test is not sufficient for coverage under the law. If that were the case, Judge Self observed, “employers across the nation will be shocked to learn that if any of their employees are sick for just a few days, then those employees are ‘disabled’ and now protected by the ADA.”
Importantly, in their dismissal decisions, the courts have recognized that their rulings do not necessarily mean that COVID-19 infection never can rise to the level of an ADA-protected disability — leaving open the distinct possibility that long-haul COVID-19 could qualify for ADA protection.
Biden Administration’s Pronouncements
The U.S. Equal Employment Opportunity Commission, which enforces the employment provisions of the ADA, has not specifically opined on the issue, but reportedly is considering the matter.
Not willing to wait for a pronouncement from the commission, the Biden administration recently decided to move forward to address the protections afforded to those suffering from long-haul COVID-19 under the country’s disability laws.
On July 26, at the ceremony in the Rose Garden marking the 31st anniversary of the ADA, President Joe Biden made clear that those persons suffering from the effects of long-haul COVID-19 may be entitled to the protections of the statute.
As Biden explained, “many Americans who seemingly recover from the virus still face lingering challenges like breathing problems, brain fog, chronic pain, and fatigue. These conditions can sometimes … rise to the level of a disability.”
Thus, Biden stated that his administration was bringing [federal] agencies together to make sure Americans with long COVID, who have a disability, have access to the rights and resources that are due under the disability law, which includes accommodations and services in the workplace, in school, and our healthcare system so they can live their lives in dignity and get the support they need as they continue to navigate these challenges.
In accordance with Biden’s declaration, both the DOJ and the U.S. Department of Health and Human Services released joint guidance, which explains when infection with COVID-19, and in particular, long-haul COVID-19, may rise to the level of an ADA disability.
In conformity with the analysis of disability under the ADA, Biden in his remarks, and the DOJ and HHS in their joint guidance, emphasized that not every person who suffers from long-haul COVID-19 necessarily will be covered by the ADA; an individualized assessment must be made. Nonetheless, the joint guidance points out that coverage may be found where the infection substantially limits one or more of the person’s major life activities.
These activities can include working, performing manual tasks, sleeping, eating, breathing, concentrating and communicating — many of which are activities in which individuals who suffer from long-haul COVID-19 experience significant difficulties.
Given Biden’s statements about the need to support persons suffering from long-haul COVID-19 and the concerted effort of the DOJ and HHS in issuing their joint guidance, the clear message from the Biden administration is that coverage under the ADA will likely be found for persons experiencing significant health effects due to long-haul COVID-19.
What Will the EEOC Say?
Even though the EEOC did not join the Biden administration’s initiative to emphasize the legal protections for employees suffering from long-haul COVID-19, there can be little doubt that the commission, even though ostensibly an independent agency, will soon be on board.
In passing the Americans with Disabilities Act Amendments Act of 2008, Congress made clear that the definitions under the various federal civil rights laws protecting individuals with disabilities are to operate under one constant standard for the definition of “disability” so that “the civil rights of individuals with disabilities will be protected in all settings.”
Thus, the DOJ’s regulations interpreting those sections of the ADA that it enforces — Title II, which prohibits disability discrimination by state and local governments, and Title III, which prohibits disability discrimination by public accommodations and commercial facilities — mirror the definition of “disability” adopted by the EEOC.
The definition of “disability” under Section 504 of the Rehabilitation Act, which also is enforced by the DOJ and HHS (as well as other federal agencies), likewise, is consistent with that under the ADA.
Employers, therefore, are well advised to carefully review the DOJ and HHS joint guidance on the ADA coverage of long-haul COVID-19 for an understanding of how the EEOC and the courts will address the issue under the employment provisions of the ADA.
To have an actual ADA disability, an individual must have a physical or mental impairment that substantially limits a major life activity. The joint guidance makes clear that long-haul COVID-19 is a physical or mental impairment since it is a “physiological condition affecting one or more body systems.”
According to the guidance, long-haul COVID-19 also affects major life activities, with the potential to experience lung, heart and kidney damage, damage to neurological and circulatory systems, and “lingering emotional illness and other mental health conditions.”
Finally, the joint guidance provides examples of where persons with long-haul COVID-19 can be substantially limited in one or more of their major life activities, and hence, disabled under the statute. These include situations where long-haul COVID-19 has resulted in:
- Lung damage that causes shortness of breath, fatigue and related effects, which substantially limits a person’s respiratory function;
- Intestinal pain, vomiting and nausea for months, which substantially limits the individual’s gastrointestinal function; and
- Memory lapses and brain fog, which substantially limits brain function, concentrating and/or thinking.
There undoubtedly are many more health-related consequences of long-haul COVID-19 that will substantially limit a person’s major life activities and rise to the level of an ADA disability. Accordingly, in the coming months (and years) there is little doubt that the rise of long-haul COVID-19 and its consequences for employees and employers alike will have a substantial impact on the development of ADA law and policy.
Avoiding ADA Liability
Even as the COVID-19 pandemic hopefully starts to wane, the long-lasting effects of persons suffering from long-haul COVID-19 will remain.
As a consequence, Assistant Attorney General for Civil Rights Kristen Clarke has promised that the federal government will vigorously enforce the ADA and other federal rights laws to ensure that as the nation responds to, and recovers from, COVID-19 … those with disabilities are full and equal partners in that recovery.
And there is no reason not to take the assistant attorney general at her word.
Accordingly, all employers need to be attuned to their legal obligations with respect to their employees who are experiencing the symptoms of long-haul COVID-19 and to make sure that they have established procedures to engage the employees in an interactive dialogue to determine what, if any, accommodations they may need in order to perform their jobs.
Failure to do so can only entail being the subject of an EEOC charge or a lawsuit, and potentially years of costly litigation — a prospect no employer wishes to contemplate.
Obligations” and “ADA: Public Accommodations and Commercial Facilities.”
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. According to the Department of Justice, “some people continue to experience symptoms that can last weeks or months after first developing COVID-19.” Importantly, “this can happen to anyone who has had COVID-19, even if the initial illness was mild.” See Department of Justice, Office of Public Affairs, DOJ and HHS Issue Guidance on ‘Long COVID’ and Disability Rights Under the ADA, Section 504, and Section 1557, July 26, 2021, available at https://www.justice.gov/opa/pr/doj-and-hhs-issue-guidance-long-covid-and-disability-rights-under-ada-section-504-andsection. (“DOJ and HHS Issue Guidance”).  See Centers for Disease Control and Prevention, Post-COVID Conditions, available at www.cdc.gov/coronavirus/2019-ncov/long-term-effects.html. Some persons experiencing long COVID also can sustain damage to multiple organs including the heart, lungs, kidney, skin and brain. Id.  A February, 2021study published in JAMA Network Open found that approximately 30 percent of COVID-19 patients reported persistent symptoms as long as nine months following their illness. Sequelae in Adults at 6 Months After COVID-19 Infection. JAMA Network Open.
2021;4(2):e210830-e210830. doi:10.1001/jamanetworkopen.2021.0830. More recent reports confirm that COVID-19 may have lingering effects that cause fatigue, shortness of breath, difficulty sleeping, fevers, gastrointestinal issues, anxiety and depression, and what has been termed “brain fog.” See Assessment of the Frequency and Variety of Persistent Symptoms Among Patients with COVID-19; A Systematic Review, JAMA Network Open, 2021;4(5):e2111417. doi:10.1001/jamanetworkopen.2021.11417; Assessment of Prolonged Physiological and Behavioral Changes Associated with COVID-19 Infection, JAMA Network Open.
2021;4(7):e2115959. doi:10.1001/jamanetworkopen.2021.15959; Long COVID: Tackling a Multifaceted Condition Requires a Multidisciplinary Approach. Lancet Infect Dis.
2021;21(5):601-602. doi:10.1016/S1473-3099(21)00043-8; Self-Reported Memory Problems 8 Months After COVID-19 Infection, JAMA Network Open. 2021;4(7):e2118717. doi:10.1001/jamanetworkopen.2021.18717. U.S. Department of Health Human Services and U.S. Department of Justice, Guidance on “Long COVID” as a Disability Under the ADA, Section 504, and Section 1557, July 26, 2021, available at https://www.ada.gov/long_covid_joint_guidance.pdf (“Joint Guidance”).  See Champion v. Mannington Mills, Inc ., 2021 U.S. District LEXIS 89381 (M.D. Ga. May 10, 2021); Payne v. Wood Servs, 2021 U.S. Dist. LEXIS 28198 (E.D. Pa. Feb. 16, 2021).  Champion, 2021 U.S. District LEXIS 89381, *11.  Anne Cullen, Biden Says Long-Haul COVID Can Be A Disability, Employment Authority –
Discrimination, available at https://www.law360.com/employment-authority/articles/1406785
/biden-says-long-haul-covid-can-be-a-disability-.  Remarks by President Biden Celebrating the 31st Anniversary of the Americans with Disabilities Act, available at https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/07/26/remarks-by-president-biden-celebrating-the-31st-anniversary-of-the-americanswith-disabilities-act/.  Id.  Joint Guidance, at 2-3. Federal civil rights laws define a person with a disability as an individual with a physical or mental impairment that substantially limits one or more of the major life activities of such individual (“actual disability”); a person with a record of such an impairment (“record of”); or a person who is regarded as having a physical or mental impairment (“regarded as”). See, e.g., 42 U.S.C. § 12102(1); 29 U.S.C. § 705(9)(B), (20)(B); 28 C.F.R. §§ 35.108, 36.105; 45 C.F.R. § 92.102(c). The Joint Guidance addresses only the “actual disability” prong of the disability definition.  See Joint Guidance at 3; Assessment of the Frequency and Variety of Persistent Symptoms Among Patients With COVID-19 – A Systematic Review, JAMA Network Open;
2021;4(5):e2111417. doi:10.1001/jamanetworkopen.2021.11417. The U.S. Department of Labor also has launched a new webpage which contains information on how persons can request workplace accommodations under federal disability law for long COVID-19. The website also includes resources for workers with long COVID, such as information on employee benefits. See https://www.dol.gov/agencies/odep/topics/coronavirus-covid-19-longcovid.  154 Congressional Record S8843 (daily ed. Sept. 16, 2008) (Statement of Managers – S.3406). See also H Rep. No. 110-730, Pt. 1 at 7 (“conforming amendments . . . are intended to ensure harmony between the federal civil rights laws”).  Compare 36 C.F.R. § 36.104 (Title III) and 28 C.F.R. § 35.104 (Title II) with 29 C.F.R. §
1630.2 (Title I).  See 29 U.S.C. § 705(9)(B).
 See Joint Guidance at 3.
 Id., at p. 4.
 DOJ and HHS Issue Guidance, supra.
By: Jonathan R. Mook
If a disabled employee cannot be reasonably accommodated in his or her current job, the Americans with Disabilities Act (“ADA”) requires an employer to consider reassigning the employee to a vacant position that the employee is qualified to perform. Importantly, however, reassignment is not a preferred accommodation under the statute. As the Fourth Circuit Court of Appeals recently emphasized in Wirtes v. City of Newport News, C.A. No. 19-780, reassignment should be considered only when accommodation within the individual’s current position would pose an undue hardship.”
Michael Steven Wirtes served as a police officer with the City of Newport News when he developed permanent nerve damage due to wearing a heavy, full duty belt which supported pepper spray, a gun with ammunition, a taser, a baton, handcuffs, a flashlight, a radio, and body camera battery pack. Wirtes asked the City for reassignment to a unit that would allow him to continue serving as a police officer without the need to wear a full duty belt. For a time, the City obliged.
That changed, however, when the City amended its job description for police officers to require all police officers to wear a standard issued full duty belt with all applicable gear. When Wirtes confirmed that he could not wear the standard full duty belt, the City offered him a choice between accepting a civilian job as a logistics manager or choosing to retire. Although Wirtes initially chose the civilian job, but soon thereafter, he retired, claiming he was “forced under medical reasons.”
Wirtes’ ADA Suit
Subsequently, Wirtes filed suit against the City in the Newport News Division of the Eastern District of Virginia, claiming that the City had violated the ADA by failing to accommodate his disability. The district court, however, dismissed Wirtes’ suit, reasoning that the City had fulfilled its ADA obligations by offering him the logistics job.
Wirtes appealed the dismissal of his case to the Fourth Circuit, which reversed the lower court and reinstated his lawsuit. In an opinion written by Circuit Judge James A. Wynn, Jr., the appeals court explained that reassignment to a vacant position was an accommodation of last resort and that the City had failed to prove that it could not have accommodated Wirtes in his police officer job by allowing him to wear a shoulder holster or exempting him from police assignments requiring a full duty belt.
In reaching this conclusion, Judge Wynn pointed to the EEOC’s Enforcement Guidance on Reasonable Accommodation, which advises that “[b]efore considering reassignment as a reasonable accommodation, employers should first consider those accommodations that would enable an employee to remain in his/her current position.” Moreover, Judge Wynn opined that the “core values” of the ADA support treating reassignment as a “last among equals” of possible reasonable accommodations because employers should attempt to assist employees in doing “their present job rather than ‘hurl[ing] [them] into an unfamiliar position.’”
The Fourth Circuit’s decision in Wirtes emphasizes that the ADA’s reasonable accommodation requirements are meant to enable a disabled employee to perform the essential functions of that employee’s current job, if at all possible. Thus, in most cases, an employer likely will be judged to have violated the statute when it unilaterally reassigns a disabled employee to a vacant position instead of reasonably accommodating the individual in his/her current position.
To comply with your ADA obligations, therefore, you should engage in the interactive reasonable accommodation process in a full and complete fashion and carefully and thoroughly consider whether reasonable accommodations exist to keep a disabled worker in his or her current position. Only after the search for a viable accommodation has been exhausted should you consider offering an employee the “last resort” alternative of reassignment.
Reassigning Disabled Employee to Another Job May Violate the ADA; Rocket Docket Update; What If a Job Applicant Discloses a Disability?; DG/30 Milestone
DiMuroGinsberg Persuades Virginia Supreme Court to Reverse ad Dismiss Almost $1Milliion Commercial Transaction Judgement; Rocket Docket Update; Are You Violating the ADA by Reassigning a Disabled Employee to a Vacant Position?; DG/30 Milestone
GRAYSON et al v WESTWOOD BUILDINGS L.P.,
Virginia Supreme Court, June 24, 2021
By: Michael Lieberman
In late June, the Virginia Supreme Court issued a blockbuster decision reversing a Fairfax County Circuit Court judge’s award of almost $1 million against two tenants of an office building and five other individuals for purported fraudulent conveyance, voluntary conveyance, and conversion. In doing so, the Supreme Court provided practitioners with a wide-ranging and in-depth review and discussion of the law of fraudulent conveyances, voluntary conveyance, badges of fraud, in personam judgments and the relationship between debtors and creditors.
The case started with a simple claim by the landlord for a default in rent in the amount of $70,000.00 by the law firms of Grayson & Kubli (“G&K”) and Kubli & Associates (“K&A”) who had been assigned the lease with the Landlord permission. The ultimate judgment did not end there, however. Following an eleven-day bench trial, the trial court issued a 51-page Letter Opinion ultimately awarding up to $900,000.00 to the Landlord. The trial court held all but two Defendants each jointly and severally liable with in personam judgments (personally liable) for the unpaid rent, the landlord’s attorney fees, and sanctions.
The Defendants in the case, which is actually the consolidation of three separate cases, appealed from the trial court’s order. While the various Appellants had been granted a Writ of Error for numerous assignments of error, the Court agreed that it would limit its holding “to what we consider to be ‘the best and narrowest grounds available,’” leaving the remaining issues for another day. Accordingly, the Supreme Court limited its Opinion to whether the trial court misapplied Virginia law as to voluntary conveyance, fraudulent conveyance and conversion and whether there was a proper factual basis to support the trial court’s Letter Opinion.
Interestingly, the Virginia Supreme Court Opinion contained a lengthy discussion regarding the burden of proof in fraudulent and voluntary conveyance cases, noting that “appellate review often turns, as they do here, on which party had the burden of proof on the factual issue in contest.” “Under Virginia law, a party asserting a fraudulent conveyance claim must show ‘by clear, cogent and convincing evidence’ that the defendant made a conveyance within the meaning of Code section 55.1-400, meaning that he made it with the “inten[t] to delay, hinder or defraud his creditors” and that the party receiving the conveyance “had notice of the grantor’s fraudulent intent.” The Court noted that in 2021, while the instant case was on appeal, it had issued the opinion of White v. Llewelyn, 299 Va. ___, 857 S.E.2d 388 which clarified that in fraudulent conveyances cases the burden of persuasion shifts to the defendant if claimant’s prima facie proof includes a “badge of fraud” capable of satisfying the ‘clear, cogent, and convincing’ standard” when viewed in the context of the specific facts of the case.” The Supreme Court then noted that “[i]n the present case, however, the trial court and the parties litigated the case under the burden-of-proof scheme that was rejected in White. That is, in the present case the Parties and the trial Court agreed that the burden of persuasion remained with the landlord once the defendants had satisfied their burden of production to present prima facie evidence that could rebut the asserted badges of fraud. Since the parties agreed to the now incorrect burden of proof of persuasion remaining with the Landlord in the trial court, and then again on appeal in its briefs as well as during oral argument, the Supreme Court held that it “would review the evidence and the trial court’s findings pursuant to the burden-of-proof scheme agreed to by the parties and adopted by the trial court.” The Court stated [w]e will not ex post facto change on appeal the burden of proof applied in a civil case when no party asks us to do so and when the trial court adopted it as the governing standard with both parties’ apparent agreement.”
The Court then turned to certain foundational issues before reviewing each of five “conveyances” which the trial court concluded were fraudulent or voluntarily conveyances or constituted conversion, and for each, the Supreme Court rejected the trial court’s analysis as being legally improper or factually unsupported. As noted, the Court analyzed these transactions under the burden-of-proof scheme agreed to by the parties and utilized by the trial court leaving the landlord with the ultimate burden of persuasion.
Succinctly, in 2008, Grayson, the owner of G&K was elected to Congress and wound up his law practice and sold it to K&A, a firm owned solely by his employee, Kubli. The terms of the sale were embodied in a Buy-Out Agreement (and a related K&A Security Agreement) between G&K/AMG and K&A. The trial court concluded that “the buy out agreement lacked mutuality and consideration ab initio [and] were thus not enforceable.” The Supreme Court found “no legal or factual basis for this conclusion.” Instead, the VSC pointed out that “[b]y its own terms, the Buy-Out Agreement reflects a bargained-for exchange with extensive bilateral consideration.” Specifically, “[i]n return for K&A promising to pay a $2 million purchase price, to assume approximately $2.8 million in debt to Grayson, and to lend various items and services to G&K/AMG in its efforts to wind up its business, G&K/AMG turned over all of its assets, clients and resources to K&A. G&K/AMG obtained a security interest in its portion of the consideration and the conveyance ultimately amounted to an acquisition of debt by K&A. Accordingly, “K&A became a debtor to G&K/AMG and to Grayson, who had a perfected security interests in the debt.”
Similarly, the Court found that a Loan Agreement entered into by a different Grayson entity to loan K&A additional monies and granting that entity, GSA, a lien on all of K&A’s assets and the right to confess judgment against K&A, regardless of which entity GSA caused to loan the funds to K&A to be a normal business transaction. The loan agreement was a business debt upon which interest was charged and GSA intended to make a profit. That constituted sufficient consideration.
Accordingly, the VSC concluded: “[i]n sum there is no clear, cogent and convincing evidence proving that the Buy-Out Agreement and the GSA Loan Agreement were fraudulent shams meant to mask wholly nonexistent transactions or that the debt K&A had expressly assumed was pure fiction.” Indeed, the trial court treated the underlying debts as valid for purposes of determining K&A had been insolvent. “The trial court could not, without committing legal error, find the debts to be valid and subsisting for purposes of determining that K&A was insolvent (and thus that its conveyance was fraudulent and voluntary) and at the same time find them to be entirely fictional for purposes of determining whether there was consideration to support these instruments.”
The Court then found “equally problematic”, the trial court’s repeated statements to the effect that “it is inferable that Grayson did not set out to defraud creditors” and “only hoped to hedge his bets as to the viability of the new entity, and place the risk of failure onto the shoulders of creditors he so chose.” Later the trial court addressed the factual issue in the context of attorney fees stating that Grayson had no intent to…create a fraudulent scheme where he wouldn’t pay the landlord at all because there were payments made [to the landlord]. Again, the trial court also later stated it was “of the view… that the Defendants did not act with ‘actual malice’ i.e. ill-will, hatred, or spite directed toward the Landlord. But instead under the mistaken belief various transactions were supported by adequate consideration…”
In reversing the cases, five foundational issues were emphasized by the Court. First, the Court surveyed Virginia law pertaining to the doctrines of fraudulent conveyances and voluntary conveyances, noting that the applicable statutes (now Code sections 55.1-400 and 401) presuppose a conveyance by a debtor from the debtor’s estate, noting that “the existence of a transfer from the debtor’s estates is [a] basic requirement.” The statutes seek to balance two competing public policies: the “public interest that debts should be paid” and “the debtor’s freedom to alienate his own property.”
Second, the Court citing La Bella Donna and several other cases makes clear that ‘both statutes contain a specific remedy—a judicial decree declaring the conveyance void as to the transferor’s creditors. This remedy returns the fraudulently conveyed assets to the transferor, but as a general rule, it does not authorize “a court to award an in personam judgment when the transaction is set aside.” Moreover, the statutes “do not impose liability upon the participants of a fraudulent conveyance.” The default remedy under both statutes is to declare the conveyance void as to the complaining creditor and then “return the fraudulently conveyed assets to the transferor.” Justice Kelsey reviewed remedies since the Elizabethan age and wrote “[i]n the 236 years since Virginia adopted its first fraudulent conveyance statute… we have continued …[to recognize] a “narrow exception” allowing a chancellor to enter an in personam judgment against a transferee of a fraudulent cash transfer….” But this exception applies to “recipients of fraudulent cash transfers” and does not apply to “other participants or coconspirators” in the fraudulent scheme. The exception “unw[inds] the transfer of the cash in the grantee’s pockets; it [does] not impose liability upon the grantee by virtue of his participation in the transaction.” Only truly exceptional circumstances would need to exist to impose in personam jurisdiction.
Third, the Opinion contains a lengthy discussion of the debtor-creditor relationship and the fraud necessary to proceed under the fraudulent and voluntary conveyance statutes. For these conveyances under the statute, transfers are “only void as to antecedent debts, and may be wholly sustained as to those coming into existence after its date.” A subsequent creditor cannot prevail on the mere ground that the transfer was voluntary. Actual fraudulent action or intent must be proved to have taken place at the time of the transfer. To prove this genre of fraud in the subsequent-creditor context, “the burden is upon the subsequent creditor to show that a prospective fraud was contemplated and directed against him.” That is, the debtor-grantor must make a conveyance “with an intent to put the property out of the reach of debts which the grantor at the time of the conveyance intends to contract, and which he does not intend to pay or has reasonable grounds to believe he may not be able to pay.” The burden of proof “is not an easy one to shoulder,” i.e. where a transfer occurs there could generally not be an intent to defraud a remote future creditor.
Fourth, citing an 1857 case, Justice Kelsey acknowledged that “[i]n Virginia, our courts have gone as far, or farther, than any other, to sustain the owner’s dominion,’ stating that that dominion includes “the power to “prescribe the order in which the creditors are to be paid.” A debtor’s right to prefer one creditor over another is thoroughly established” by Virginia precedent. Quoting Neff v. Edwards, 148 Va. 61, 627-28 (1927): “A debtor has the right to prefer one creditor to another. Giving such a preference is not fraudulent, though the debtor be insolvent, and the creditor is aware at the time that it will have the effect of defeating the collection of other debts. This is not hindering or delaying creditors within the meaning of the statute. It does not deprive other creditors of any legal right, for they have no right to a priority.” In other words, “to prefer one creditor to another “when neither has a lien, “is not in contravention of any rule or law in this State.” “Indeed, [a] preference may be given and received for the express purpose of defeating an execution, for the mere intent to defeat an execution does not of itself constitute fraud… It does not deprive other creditors of any legal right, for they have not right to priority.” “It necessarily follows that, ‘since a debtor has the right to pay one creditor in preference to another, so he may, without the imputation of fraud, secure one creditor to prevent another from gaining an advantage.’”
Fifth, the Court’s Opinion contains a lengthy discussion regarding consideration to support conveyances. The Court stated “[f]or over a century, it has been understood “that valuable consideration’ in the statutes against fraudulent conveyances is to be taken… in the widest sense of the law of contracts…. Consideration deemed valuable at law means, in effect, ‘something’ or adequate consideration to support a contract. The Virginia Code’s language creates a standard that requires something of value be exchanged and does not require equivalence.” “Virginia law has always recognized that paying or securing a legally enforceable antecedent debt is a conveyance supported by consideration.” Finally, a “Court may find a conveyance fraudulent when an insolvent debtor retains indefinite, exclusive possession of de facto ownership of the conveyed assets, to such an extent that doing so effectively defeats the conveyance “in its entirety” or when an insolvent corporate debtor is under the “complete control” of one of its directors who is himself a stockholder and creditor of the corporation and the corporate debtor prefers that creditor-director….” Absent the unitary power of complete control, ‘a director may in good faith direct the corporation to pay its debts to him in preference to other creditors.’
With these foundational issues settled, it was clear to the Court that the Landlord in the present case did not carry its agreed-upon burden of persuasion regarding any of the five “conveyances” which the trial court found were fraudulent.
- The GSA Loan and Confessed Judgment – the trial court never explained how the loan agreement or confessed judgment qualified as an actionable conveyance under either statute. The trial court’s conclusion that the transfer was cloaked with multiple badges of fraud because they were made between closely related parties and lacked consideration was incorrect both factually and legally. The trial court misapplied the law by anchoring its conclusion so heavily to the relationship between Grayson and his entities… “relationship is not a badge of fraud… The relationship of the parties does not, of and in itself, cast suspicion upon the transaction or create a prima facie presumption against its validity without proof that there was fraud on the part of the grantor, participated in by the grantee.” “A close relationship is merely something to be “closely scrutinized.” Here, the GSA Loan Agreement and the confessed judgment were simply the payment of a bona fide, preexisting debt and did not constitute a fraudulent or voluntary conveyance.
- The 2011 G&K/AMG Checking-Account Payments- The badges of fraud that the trial court relied upon do not apply here. Grayson, a perfected, secured creditor of G&K/AMG, directed the payments to reduce G&K/AMG’s preexisting debt to him personally, to provide a loan to GLC, and to close down the G&K/AMG account. “In short, the payments were made for adequate consideration in payment of an antecedent debt to a creditor with a perfected security interest.
- The Halldorson Settlement Proceeds—Again the Supreme Court found that the trial court erred both factually and legally. First, there was no proof that $100,000 was ever transferred to Kubli personally. Second, when the proceeds of the Halldorson case were distributed, K&A was “in debt to G&K/AMG for millions of dollars pursuant to the Buy Out Agreement and G&K/AMG in turn, owed Grayson several million dollars.” “The Grayson Debt was perfected and secured…Grayson was ultimately entitled to the proceeds and the fact that he directed his attorney to pay the proceeds [to his company] GLC is irrelevant.” “It was in payment of a valid, secured, preexisting debt and thus was made in exchange for valuable consideration”.
- The IDT Legal Fees– The Supreme Court found that the trial court erred in relying upon the badges of fraud in concluding this was a fraudulent conveyance. However, the Court also erred in not dismissing this claim which was not in the Complaint. The Court stated: “as we have stated many times, the basis of every right of recovery under our system of jurisprudence is a pleading setting forth facts warranting the granting of the relief sought….Pleadings are as essential as proof…The issues in a case are made by the pleadings, and not by the testimony of witnesses or other evidence…” Moreover, “it is well settled that when fraud is relied upon to set aside a conveyance its must be expressly charged…” Here, the Landlord failed to plead the IDT legal fees in its Complaint or Amended Complaint.
- The Asset Take-Back and Debt Write-Off- Again, the Supreme Court held the trial court erred legally and factually. Here, the trial court rejected the testimony of both Grayson and Kubli that Grayson had never forgiven K&A’s debt. The VSC held that in rejecting the testimony the trial court erred. The Court stated: “we have often said that ‘although a fact-finder must determine the weight and credibility of witnesses, it may not arbitrarily disregard uncontradicted evidence of unimpeached witnesses which is not inherently incredible and not inconsistent with the facts in the record, even though such witnesses are interested in the outcome of the case.” The Court then commented on the meaning of “arbitrary” and “inherently incredible” (so manifestly false that reasonable men ought not to believe it) and concluded that the Court arbitrarily rejected their testimony. On aside, the Court also made clear that the fact that Grayson may have charged off the K&A loan on a IRS Form 1099-C is not evidence that the loan had been forgiven. “Put another way, ‘[a] write off is simply an internal recognition by a lender that an account is worthless after attempts at collection have failed….’ When a lending institution ‘writes-off’ a bad debt it is merely indicating it is uncollectible. That is, it is no longer an asset of the institution. A ‘write-off’ does not mean that the institution has forgiven the debt or that the debt is not still owing.” Citing the Fourth Circuit Court of Appeals and rejecting a “small minority” of courts suggesting otherwise ,.. the VSC was clear that a Form 1099-C does not itself operate to legally discharge a debtor’s liability, and does not standing alone, raise a genuine issue of material fact regarding [any liability on the note.] Accordingly, there was no credible evidence to contradict Grayson and Kubli on this issue and no basis to find that there was a fraudulent transfer of these funds.
Lastly, the Supreme Court found that Grayson was not liable under the tort of conversion relating to the Halldorson settlement proceeds. Citing a 2020 case, the Court stated that “to establish a conversion of intangibles…the plaintiff must have both a property interest in and “be entitled to immediate possession” of the documented intangible property.” The Landlord’s claim fails because the Landlord did not have an immediate right to possession of these proceeds, much less one that was “clear, definite, undisputed, and obvious… The proceeds were subject to a valid, pre-existing, and superior interest in favor of G&K/AMG, and ultimately in favor of Grayson. The UCC specifically allowed Grayson to claim the funds pursuant to his perfected security interest.” (Code section 8.9A-607(a)(1),(3).
Appellants Grayson and Kubli and their individual companies were represented by Ben DiMuro and Michael Lieberman of DiMuroGinsberg PC of Alexandria, Virginia.
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