The Americans With Disabilities Act has a little known, and seldom used, section that prohibits employers from participating in contracts or any type of relationship that results in disability discrimination against an employee. The ADA states that disability discrimination includes “participating in a contractual or other arrangement or relationship that has the effect of subjecting a covered entity’s qualified applicant or employee with a disability. . . .” The United States Department of Labor defines the phrase "contractual or other arrangement or relationship" to include a relationship with an employment or referral agency; labor union, including collective bargaining agreements; an organization providing fringe benefits to an employee of the covered entity; or an organization providing training and apprenticeship programs.
This rule applies to an employer, with respect to its own applicants or employees, whether the employer offered the contract or initiated the relationship or whether the employer accepted the contract or acceded to the relationship. The rule's purpose is to ensure that an employer may not do through a contractual or other relationship what it is prohibited from doing directly. In short, the ADA imposes liability not only for an employer’s direct discriminatory standards, but for discrimination carried out via a contractual agreement with a third party. If an employer, via its contract with a third party, has subjected an employee to discrimination prohibited by the ADA, it cannot rest on blind contractual compliance to escape liability for discrimination.
As noted, this issue doesn't come up very often. One example is Cripe v. City of San Jose. San Jose had a policy that categorically restricted the types of positions that officers with certain injuries could hold. The officers argued that the city’s policy violated the ADA. The city contended that its policy was justified by public safety concerns.
The policy in question was the result of a negotiated agreement between the city and the police union. The policy did not permit the city to make any individual assessment as to whether an officer, with or without an accommodation, could perform the essential functions of any job other than the contractually set-aside “modified-duty” positions. Thus, no disabled officer was eligible for any other job assignment within the department.
One of the city’s arguments was that the failure to apply the requirements of the policy to the plaintiffs would require a divergence from the collective bargaining agreement with the police union and that it cannot be required to take any action inconsistent with that agreement. But the court observed that the ADA makes clear that the term “discriminate” includes participating in a contractual or other arrangement or relationship that has the effect of subjecting a covered entity’s qualified applicant or employee with a disability to disability discrimination. The court determined that the city’s contract with the police union had the effect of subjecting the plaintiffs to discrimination by imposing impermissible qualification standards that screen out the class of disabled officers. Thus, the policy was discriminatory and could not survive under the ADA, unless some exception applied.
Likewise, in Hoehn v. International Security Services, the plaintiff claimed that he he was terminated from his position as an armed security guard on the basis of his disability, vision in only one eye. The defendant had a contract with the General Services Administration that granted GSA the right to require the defendant to remove an employee from any GSA properties if it was determined that the individual was unsuitable for security reasons or otherwise unfit to work on GSA property. The plaintiff’s vision impairment caused GSA to exercise its contractual right to insist that he be removed from GSA sites. The defendant subsequently terminated him.
The defendant’s arguments included reference to its contract with GSA. Citing the rule discussed above, the court rejected that argument, stating that “the mere fact that ISSI may have been contractually bound to enforce a GSA mandated contract provision regarding visual acuity and vesting with the GSA Contracting Officer sole authority to deviate from the terms of that provision, does not dispense with the necessity of determining whether Hoehn was a ‘qualified individual with a disability.’ "