Employer’s After-the-Fact Discovery of Lack of Job Qualification Sinks Employee’s ADA Discrimination Claim (US)

Sunny Anthony worked for TRAX International as a technical writer.  During the course of her employment, she asked TRAX to accommodate her disabilities–post-traumatic stress disorder and related anxiety and depression—by letting her work from home, which TRAX denied or otherwise declined to allow.[1]   So Ms. Anthony sued TRAX, alleging that it violated the Americans with Disabilities Act (ADA) by failing to provide her reasonable accommodation, and for terminating her employment due to her disabilities.  In the course of that lawsuit, TRAX discovered that Ms. Anthony had falsely represented on her employment application that she possessed a bachelor’s degree, when she in fact did not. Possessing a bachelor’s degree was a prerequisite for the technical writer position and was required under a government contract held by TRAX.

In response to her claims, TRAX argued that as a plaintiff suing under the ADA, Ms. Anthony must show that she was qualified for the job at issue.  Here, it argued, she could not do so, because she lacked a qualification that was not merely a preference of TRAX, but was objectively required, directly related to the job, and not subject to exception.  The district court agreed and ruled in TRAX’s favor, reasoning that even though the lack of a degree was not discovered by TRAX until after the alleged discriminatory employment action took place–what is referred to as “after-acquired evidence”–because she lacked the required bachelor’s degree during her employment, she was not a “qualified individual” covered by the ADA.  (The ADA protects “qualified individuals with a disability” from discrimination.)

Ms. Anthony appealed to the US Court of Appeals for the Ninth Circuit.  There she argued that because her misrepresentation regarding the bachelor’s degree was “after-acquired evidence,” at most it should be used to limit TRAX’s liability, but should not bar relief entirely.  She relied, in part, on the United States Supreme Court’s ruling in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995).  In that case, the Court held that an employee terminated in violation of the Age Discrimination in Employment Act (ADEA) is not barred from all relief when, after the termination, the employer uncovers evidence that would have led to the employee’s termination on lawful and legitimate grounds had the employer known about it at that time.  Ms. Anthony additionally argued that she needed only to show that she was capable of performing the essential functions of the technical writer position to be considered a qualified individual under the ADA, and that her lack of bachelor’s degree was irrelevant to that determination.

In its April 17, 2020 opinion, the Ninth Circuit rejected Ms. Anthony’s arguments and affirmed the district court’s decision under a two-step qualified individual test promulgated by the EEOC and entrenched in relevant case law.  Specifically, the court explained that at the first step, it must determine if the individual satisfies the prerequisites for the position, such as possessing the appropriate educational background.  At the second step, the court must determine whether the individual can perform the essential functions of the position, with or without reasonable accommodation.  Thus, under this test, the Ninth Circuit held that an individual who fails to meet the job prerequisites cannot be considered “qualified,” and thus cannot meet their initial burden under the ADA, unless the prerequisite itself is discriminatory in effect, which it says was not the case here.

Further, the Ninth Circuit held that after-acquired evidence can be used to defeat an ADA claim if that evidence proves that the plaintiff did not satisfy the job prerequisites at the relevant time.  The Ninth Circuit considered the holding in McKennon, but ultimately found McKennon distinguishable because, in this case, unlike in McKennon, the after-acquired evidence was being used to rebut the plaintiff’s prima facie case.  Further, the cases Ms. Anthony relied upon were distinguishable because the ADA expressly limits its protection to qualified individuals, whereas the ADEA – the law at issue in McKennon – does not. The Ninth Circuit also analyzed out-of-circuit authority and joined the Third, Fifth, and Sixth circuits, which have all interpreted McKennon narrowly as only precluding the use of after-acquired evidence to show a legitimate, nondiscriminatory basis for the adverse action.

It bears noting, however, that there is a circuit split on this issue, as the Seventh Circuit has reached the opposite conclusion.  The Seventh Circuit, relying on McKennon, held that after-acquired evidence does not bar all relief in a disability case because that court could discern no distinction for this purpose between an age discrimination claim like the one in McKennon and an ADA claim.  Although the Ninth Circuit considered the Seventh Circuit’s position, it ultimately rejected its reasoning, explaining that the Seventh Circuit overlooked the distinction between the use of after-acquired evidence to negate an element of a plaintiff’s prima facie case and its use to establish a nondiscriminatory motive for the adverse employment action.  Ultimately, the Ninth Circuit determined that a limitation on the use of after-acquired evidence to an employer attempting to excuse its discriminatory conduct under the ADEA does not extend to evidence used to show that an ADA plaintiff is not a qualified individual, as required to establish a prima facie case of disability discrimination.  Therefore, the Ninth Circuit concluded that the after-acquired evidence could be considered, and because Ms. Anthony unquestionably did not have the requisite bachelor’s degree at the time she was terminated, she was not qualified within the meaning of the ADA.

This case highlights the importance of the first step in the two-step qualified individual analysis under the ADA, and reminds that an employee must satisfy the prerequisites for the position and be able to perform the essential functions of the position, with or without reasonable accommodation, in order to bring a claim under the ADA.  It also is a reminder to employers facing lawsuits by employees to thoroughly investigate all issues that may provide potential after-acquired evidence arguments, as, under Anthony, employers in the Ninth Circuit (AZ, AK, CA, HI, ID, MT, OR, and WA) may be able to defeat ADA actions brought against them if they subsequently discover that the plaintiff lacked objective educational or other prerequisites of the job at issue.

[1] This case arose well before the current COVID-19 pandemic, in which many employers have shifted to allowing employees to continue working remotely from home.  It remains to be seen in the coming months and years what impact this sea change in the workplace will have on employee requests to telecommute as an accommodation under the ADA.