Supreme Court Affirms Application of Neutral Employee Conduct Rules
Feature Story by Mason Emnett - 5/13/2005
This article is part of a civilrights.org series that examines civil rights-related decisions issued during the Supreme Court's October 2003 Term.Although the Supreme Court's decision in Raytheon Co. v. Hernandez affirmed the ability of employers to enforce neutral workplace conduct rules, at least in the context of claims of intentional discrimination, the Court left open whether such policies could have a disparate impact on employees forced to resign for drug or alcohol use, but who have since been rehabilitated, and whether such disparate impact would violate the Americans with Disabilities Act.
In a unanimous decision, the Court overturned the ruling of the U.S. Court of Appeals for the Ninth Circuit, which found that consideration of any disparate impact resulting from a neutral workplace policy is not appropriate in analyzing a claim of disparate treatment under the ADA.
Writing the majority opinion in Raytheon, Justice Clarence Thomas explained that claims of disparate treatment must be supported by a showing that an adverse employment decision was actually motivated by a protected characteristic, such as a person's disability. Application of a neutral workplace policy does not provide evidence of disparate treatment without proof that the policy is a pretext for intentional discrimination.
Joel Hernandez's Claim
The claim of discrimination at issue was brought by Joel Hernandez, who worked for the Hughes Missile Systems Company (Hughes) for 25 years in a variety of positions before Hughes was acquired by the Raytheon Company.
On July 11, 1991, Hernandez's behavior at work suggested that he might be under the influence of alcohol or drugs and, pursuant to company policy, Hernandez was given a drug test. Hernandez tested positive for cocaine. He was given the option to resign instead of being fired and Hughes noted in its personnel records that Hernandez had been "discharge[d] for personal conduct."
Two years later, Hernandez applied to be rehired by Hughes and acknowledged on his application that he had previously worked for the company. Hernandez also attached to his application two letters of recommendation, one from his pastor and another from his Alcoholics Anonymous counselor.
When the application materials were reviewed by Hughes' personnel department, staff pulled Hernandez's previous personnel records to review along with his application materials. Upon seeing that Hernandez was separated from the company due to misconduct, the personnel department rejected the request for rehire.
Hernandez subsequently filed a charge with the Equal Employment Opportunity Commission (EEOC,) asserting that Hughes' refusal to rehire him constituted discrimination based on a record of disability in violation of the ADA.
Hughes responded that the application for rehire was rejected not because of any disability, but because of Hernandez's demonstrated drug use while previously employed. Hughes maintained that it had a right to deny reemployment to employees terminated for violation of workplace conduct rules.
Based on Hughes' response and the possibility that the letters attached to Hernandez's application may have alerted the personnel staff to the underlying reason for his earlier misconduct, the EEOC concluded that Hughes may have rejected the application based on Hernandez's record of past alcohol and drug use.
The EEOC then issued a right-to-sue letter, finding that there was a reasonable cause to believe Hernandez was denied rehire because of his disability.
Hernandez Takes His Case to Court
In the lower courts, Hughes pointed to its neutral policy against rehiring employees previously terminated for violating workplace conduct rules, arguing that such policies are legitimate and nondiscriminatory.
While this defense was successful in the district court, the Ninth Circuit disagreed, finding that the no-hire policy, "although not unlawful on its face, violates the ADA as applied to former drug addicts whose only work-related offense was testing positive because of their addiction." Even if the Hughes personnel staff been completely unaware of Hernandez's record of disability, the Court of Appeals concluded that reliance on the neutral no-hire policy was unlawful nonetheless.
A Unanimous Decision in the Supreme Court
Although Justices David Souter and Stephen Breyer recused themselves from the case, the remainder of the Court was unanimous in overturning the Court of Appeals' decision. However, the Court declined to reach the actual question presented for review: "whether the ADA confers preferential rehire rights on disabled employees lawfully terminated for violating workplace conduct rules."
Writing for the Court, Justice Thomas instead explained that, as a threshold matter, the Court of Appeals had improperly applied a disparate impact analysis in what was really a disparate treatment case. The Court therefore vacated the Ninth Circuit's decision and remanded the case for further proceedings.
On appeal, Hughes had not challenged, and the Court did not address, the Ninth Circuit's finding that material issues of fact existed regarding a prima facie case of discrimination, nor did it question whether Hernandez was actually disabled or had a record of disability within the meaning of the ADA.
Hughes instead challenged the Court of Appeals' conclusion that the neutral no-hire policy was discriminatory as applied to employees terminated for illegal drug use.
The Court agreed, finding that the Ninth Circuit improperly relied upon the potential disparate impact the policy could have on recovered drug addicts. Had the Ninth Circuit correctly applied the disparate treatment framework, Justice Thomas explained, "it would have been obligated to conclude that a neutral no-rehire policy is by definition, a legitimate, nondiscriminatory reason under the ADA."
The Court therefore found that the only remaining question was whether Hernandez could produce sufficient evidence from which a jury could conclude that Hughes' stated reason for refusing to rehire Hernandez was in fact pretext.
The Court took the opportunity to admonish lower courts to distinguish carefully between claims of discrimination based on disparate treatment and those based on disparate impact.
In disparate treatment cases, Justice Thomas wrote, liability results from an employer treating some people less favorably because of their disability or some other protected characteristic. The protected trait must actually motivate the employer's decision.
In comparison, disparate impact cases involve employment practices that are facially neutral in their treatment of different groups, but that in fact fall more harshly on one group than another. The subjective intent to discriminate that is required in disparate treatment cases is thus not required in disparate impact cases.
In this case, both of the lower courts found that Hernandez had failed to plead a claim of disparate impact and, therefore, the only issue pending summary judgment was whether Hughes' actions constituted disparate treatment of Hernandez--for example, whether the company refused to rehire Hernandez because it regarded him as being disabled and/or because of his record of disability.
Justice Thomas explained that the neutral no-hire policy sufficiently rebutted any claim of intentional discriminatory treatment and, thus, the only question that remained was whether there was sufficient evidence from which a jury could conclude that Hughes' reliance on the no-hire policy was pretextual and its refusal to rehire Hernandez in fact was based on his disability.
As for the no-hire policy itself, the Court concluded that it is "a quintessential legitimate, nondiscriminatory reason for refusing to rehire an employee who was terminated for violating workplace conduct rules." The Court theref
