AwDA provisions protecting disabled employees apply only to employers of 15 or more persons. However, dentists who employ fewer than 15 people should not assume that no law protecting disabled employees applies to them, as many states have such laws that apply to employers with fewer than 15 workers. Often, as the following cases demonstrate, these laws may establish protections for disabled employees that are broader than those mandated by the AwDA.

In Minnesota, for example, a state appellate court held that differences in long-term disability benefits based solely on whether an employee is physically or mentally disabled constituted discrimination in violation of that state’s Human Rights Act.³

In its decision, the Minnesota court noted that its ruling conflicted with some federal court interpretations of the AwDA. Federal courts have found that employers could offer disability insurance providing different levels of benefits to persons with different types of disabilities.

In the Minnesota case, an Anoka County employee resigned from her job because of incapacitating mental illness. She began to receive long-term disability income from Anoka County in April 1995. However, the county’s long-term disability policy in effect at the time limited benefits for beneficiaries with mental disabilities.

Although the plan offered coverage until retirement age for the physically disabled, it paid benefits for mental disability for no longer than 24 months—unless the employee was an inpatient in a hospital or institution licensed to provide psychiatric care. Because the former employee in this case was not hospitalized two years after her resignation, her long-term disability benefits were discontinued.

The former employee filed a claim with the Equal Employment Opportunity Commission, or EEOC, alleging disability. The commission found that Anoka County had violated the woman’s rights under the AwDA by not offering comparable long-term disability benefits for employees with physical and mental disabilities.

The former employee then sued, alleging that the county had discriminated against her in violation of the AwDA and the Minnesota Human Rights Act. The trial court dismissed her suit, finding that she did not have standing under the AwDA.

On the claim pertaining to the state’s Human Rights Act, the court found that the woman was unable to show that the county discriminated against her because of her disability, since all employees were offered the same policy, regardless of their physical or mental health. The former employee appealed the dismissal of her claim under the Human Rights Act, although she did not appeal the dismissal of the AwDA claim.

The Minnesota appellate court noted that under the state Human Rights Act, it is an unfair employment practice for an employer to discriminate with respect to employment privileges because of disability. The defendants, which included Anoka County and an insurance company, argued that the state court should follow a series of federal rulings interpreting the AwDA. These rulings held that if all employees were offered the same policy with the same limitations regardless of their physical or mental health, there was no discrimination.

The court observed that the EEOC had issued guidance stating that health insurance offering different levels of coverage for physical and mental conditions might not violate the AwDA so long as all employees were offered the same policy. But the EEOC guidance specifically stated that it did not apply to disability insurance.

In contrast to the EEOC guidance, the court noted, some federal appellate courts have concluded that long-term disability insurance offered by employers does not violate the AwDA merely because it offers different levels of benefits to people with different types of disabilities. However, the Minnesota court was not bound to follow these interpretations of the federal AwDA in analyzing the state’s Human Rights Act.

The court observed that limitations on disability claims based on mental illness seemed to reflect traditional stereotypes about mental illness, and that Minnesota had a clear public policy prohibiting discrimination against the disabled in insurance coverage. Thus, the court concluded that differences in long-term disability benefits based merely on whether an employee is physically or mentally disabled is discrimination in violation of the Minnesota Human Rights Act.

Permitting employers to offer different levels of benefits for physically and mentally disabled employees could create potential pitfalls.

The court noted that permitting employers to offer different levels of benefits for physically and mentally disabled employees could create potential pitfalls if an employee were to be diagnosed with a condition such as Alzheimer’s disease or schizophrenia.

A New Jersey state appellate court also recently issued a decision granting broader protections under state disability law than might have been found under the AwDA. In that case, the court concluded that gender dysphoria, or transsexualism, was a handicap under the New Jersey Law Against Discrimination.⁴

The plaintiff in the New Jersey case was a physician who was born a male and employed by West Jersey Health Systems as the medical director of an outpatient treatment facility. While employed by West Jersey, the physician began to display certain external female traits.

Discomfort over the physician’s physical transformation was expressed by a few West Jersey employees, including the chief executive officer of West Jersey Physicians’ Associates, which eventually assumed control of the professional staff of the outpatient facility. That CEO reportedly asked the physician to "stop all this and go back to your previous appearance."

In June 1997, the physician was diagnosed with gender dysphoria, a gender identity disorder also known as transsexualism. A month later, the physician’s professional services agreement was terminated, effective Oct. 22, 1997, and the physician was informed that West Jersey Physicians’ Associates would be offering new contracts to the outpatient facility’s staff. According to the court’s opinion, however, the CEO of Physicians’ Associates told the physician that "no one’s going to sign this contract unless you stop this business that you’re doing."

The physician later gave the CEO a letter explaining the physician’s gender identity disorder. Still, the CEO terminated the physician on Oct. 22, 1997.

Nine months after the firing, the physician underwent surgery to become a female. In December 1998, the physician sued West Jersey and other parties for discrimination based on disability, along with other allegations. Summary judgment was granted for the defendants, and the physician appealed.

The New Jersey appellate court considered whether gender dysphoria was a recognized disability under the state Law Against Discrimination. The standard established in New Jersey for a disability protected under the antidiscrimination law was a "mental, psychological or developmental disability resulting from anatomical, psychological, physiological or neurological conditions which ... is demonstrable medically or psychologically, by accepted clinical or laboratory diagnostic techniques."

The New Jersey court noted that, unlike the AwDA, its state statute did not expressly exclude transsexualism, and did not require that a disabling impairment substantially limit a major life activity. The court also observed that other state courts had reached varying conclusions on whether their state’s statutes on disability provided that transsexualism was a disability.

The New Jersey court said state courts that have found that transsexualism was not a disability were interpreting statutes requiring that a disability restrict a major life activity, which is the federal AwDA standard.

Evidence showed that gender dysphoria can be diagnosed by accepted clinical techniques. Also, the court noted, the American Psychiatric Association recognizes gender dysphoria as a disorder. Thus, the court concluded that gender dysphoria qualified as a handicap under New Jersey Law Against Discrimination.

Next, the court reviewed evidence the physician presented to establish that she was disabled by gender dysphoria. The fact that the physician underwent sexual reassignment surgery was sufficient evidence that the physician’s emotional and mental well-being were impaired—at least for the purposes of defeating the defendant’s summary judgment motion and taking the case to trial, the court found.

However, the court also found that there was insufficient evidence to show whether the physician who diagnosed the plaintiff used accepted diagnostic techniques. Thus, the appellate court ordered that the case be returned to the trial court so that more evidence could be gathered on this issue to determine whether the physician could proceed with the handicap discrimination claim under the state’s Law Against Discrimination.

The cases reviewed in this column demonstrate that state courts may be willing to permit employees who allege that they experienced disability-related discrimination to sue their employers under state law, even if such lawsuits might not be allowed under the AwDA.

Dentists should be cautious in dealing with disabled employees to ensure that they are complying with all applicable state laws protecting disabled workers.

View larger version (132K): [in this window] [in a new window]   Mr. Sfikas is ADA general counsel and an adjunct professor of law at Loyola University of Chicago School of Law. He has lectured and written on legal issues and is a fellow of the American College of Trial Lawyers. Address reprint requests to Mr. Sfikas at the ADA, 211 E. Chicago Ave., Chicago, Ill. 60611.