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Despite a Reversal and Remand from the Supreme Court, the Ninth Circuit Court Finds that an Employee Who Was Forced to Resign After Testing Positive for Cocaine Can Proceed to Trial Under a Failure to Rehire Claim Under the ADA

Volume 3, Issue 2
March 31, 2004

Late last year, the United States Supreme Court reversed the U.S. Court of Appeals for the Ninth Circuit in an Americans with Disabilities Act of 1990 ("ADA") discrimination case involving a former employee who was forced to resign after he tested positive for cocaine. When the former employee applied for rehire more than two years later, his application was rejected based on the company's policy against rehiring employees who were terminated for workplace misconduct. The Ninth Circuit Court had concluded that such a policy violated the ADA because of its adverse impact on rehabilitated drug addicts seeking reemployment. The Supreme Court disagreed, holding that an employer's no-hire policy is a "quintessential legitimate, nondiscriminatory reason for refusing to rehire an employee who was terminated for violating workplace conduct rules". See KZ&A's Employer Report - Vol. 2, Issue 18 (12/8/03). The case was sent back to the Ninth Circuit Court to consider whether there was sufficient evidence from which a jury could conclude that the employer made its decision based on the former employee's disability despite its explanation that it was following established company policy on rehiring former employees terminated for violating the company conduct rules. It should come as no surprise that the Ninth Circuit Court just recently determined that there was enough evidence to send the case to trial.

The Ninth Circuit Court's decision was based on three main factors. First, it found that given the evidence of the company's policy to provide the person reviewing an application the complete personnel file of a former employee, and the former employee's inclusion of a letter of recommendation from his Alcoholics Anonymous ("AA") counselor with his application, a reasonable jury could disbelieve the testimony of the employer representative that she only reviewed one document, a separation sheet, in the former employee's personnel file, and find that the employee representative had reviewed the entire personnel file and learned of the former employee's alcohol and drug problems.

Second, the Court concluded that the employer's explanation of its conduct in its position statement to the Equal Employment Opportunity Commission ("EEOC") conflicted with its subsequent position taken during litigation. From such an inconsistency, the Court stated a jury could reasonably infer that the company's more recent explanation was false.

Third, the Court focused on the fact that the employer's policy on rehiring former employees terminated for misconduct was oral not written. As no employer witness could identify the origin, history, or scope of the alleged unwritten policy, the Court determined a reasonable jury could conclude the policy either did not exist or was not consistently applied, particularly given that the employer had an extensive set of written personnel policies covering other subjects.

Thus, the case is now set for trial. It serves as a good example of the substantial and continuing tension between the Supreme Court and the Ninth Circuit Court, particularly in the area of employment law. It is also another bad decision for employers issued by what many view as an extremely employer-hostile Ninth Circuit Court.

From a more practical standpoint, this decision necessitates that employers: (1) reevaluate how much information its hiring representatives should be able to access; (2) determine what types of documents it will allow to be attached to job applications; (3) more closely scrutinize statements set forth in position statements and who is designated to prepare such statements; (4) memorialize all of its pertinent policies in writing; and (5) be able to document the origins, revisions, and dates of issuance of all pertinent policies.

Hernandez v. Hughes Missile Sys. Co., --- F.3d ---, 2004 WL 556706 (9th Cir. Mar. 23, 2004).

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.