Monday, July 7, 2014

EEOC transforms a $1.39 bag of chips into a $180,000 settlement

Nearly three years ago, I reported on a disability-discrimination lawsuit filed by the EEOC against Walgreens. The agency had filed suit of behalf of a diabetic employee who, without permission, took a bag of chips off the shelf to stabilize her blood sugar level during a hypoglycemic attack. Walgreens considered it shoplifting and fired the employee. The EEOC considered the termination a failure to reasonably accommodate the employee’s disability and filed suit.

Last week, Walgreens settled the lawsuit, agreeing to pay the ex-employee $180,000, in addition to agreeing to implement revised policies and training.

Whether you think this is a fair settlement, or that Walgreens overpaid, depends on whether you view the termination an unfair discrimination against an employee trying to stop a medical episode, or a reasonable enforcement of a retailer’s anti-shoplifting policy. In denying the employer’s motion for summary judgment earlier this year, a federal judge strongly hinted it was the former:
Here, the misconduct alleged by Walgreens that formed the basis of her termination was the taking of the chips without paying for them first, an act Hernandez claims was caused by her disability. Walgreens has failed to allege any misconduct that is unrelated to her disability.
In announcing the settlement, the EEOC also recognized the dichotomy between discrimination and theft-prevention:
People may think this case revolves around theft, but the real issue is how a company responded to a valued 18-year employee, whom it knew for 13 years to be diabetic, and who attempted to pay for the chips after she recovered from her hypoglycemic attack.
As for me, I don’t believe either interest trumps in this case. I firmly believe that employers like retailers (or casinos) must do everything they can to prevent and deter employee theft. These measures include terminations that, under other circumstances, might seem overly harsh. Yet, in this case, the company knew about this long-term employee’s medical history, and refused to let the employee pay for the chips after her recovery. This does not appear to be the case of an employee nefariously grazing on unpaid goods. Instead, it appears to be a case of employee making a snap judgment in response to a medical condition, and trying to make good on it after the fact. Given these facts, this case seems like an odd one for this employer to litigate for three years. It could have cut its losses, settled early, and saved itself three years of legal fees. Yet, I also see the import of the employer’s “zero tolerance” stance.

This case illustrates how difficult reasonable accommodate cases are. When the accommodation is so trivial (a $1.39 bag of chips, for example), employers should strongly consider making the accommodation for an employee’s medical situation regardless of the scenario. It is difficult to justify a claim of hardship based on a economically trivial accommodation. Even when the interest the employer is trying to protect is as strong as deterring theft, the cost of defending that interest may to be too high, especially in light of the uncertainty related to the potential outcome of very fact-specific litigation.