Dillard's to Pay $2 Million to Settle Class Action Disability Discrimination Lawsuit by EEOC

Department Store Chain Policy Required the Disclosure of Confidential Medical Information Affecting Thousands of Workers, Federal Agency Says

LOS ANGELES -Dillard's Inc., a national retail chain, will pay $2 million and commit to extensive, company-wide injunctive relief to settle a class action disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.  At issue was Dillard's longstanding national policy and practice of requiring all employees to disclose personal and confidential medical information in order to be approved for sick leave.  The settlement also resolves claims that Dillard's terminated a class of employees nationwide for taking sick leave beyond the maximum amount of time allowed, in violation of the Americans with Disabilities Act (ADA).

The EEOC originally filed its lawsuit in 2008 in the U.S. District Court for the Southern District of California (EEOC v. Dillard's, Inc., et al, Case No. 08-CV-1780), on behalf of Corina Scott, a former cosmetics counter employee at a Dillard's store in El Centro, Calif., and others who were required to disclose the exact nature of their medical conditions to be approved for sick leave since 2005.  

While the class members had verifications from doctors to assure Dillard's that the absences were due to medical reasons, many did not feel comfortable disclosing the specifics of their conditions to the company.  According to the EEOC, Scott - who was absent from work for a mere four days - and others were then fired in retaliation for their refusal to provide details of their medical conditions, despite the fact that many of their own doctors advised them not to disclose specific medical information in accordance with the law.  

The EEOC argued that the policy violated the ADA which prohibits employers from making inquiries into the disabilities of their employees unless it is job-related and necessary for the conduct of business.  The District Court ruled that Dillard's medical disclosure policy was facially discriminatory under the ADA.  The EEOC expects to identify thousands of victims across the U.S. through the claims notice process designed to distribute the class fund arising from this settlement.  

Additionally, the EEOC claimed that Dillards enforced a maximum-leave policy limiting the amount of health-related leave an employee could take and, in practice, did not regularly engage in an interactive process with employees to determine if more leave was allowed under the ADA as an accommodation of the employee's disability.

The parties entered into a three-year consent decree requiring Dillard's to pay $2 million to identified victims and establish a class fund for currently unidentified victims who also suffered similar discrimination during the relevant time period.  Any person who worked at a Dillard's store (other than the El Centro store) between August 16, 2005, and August 15, 2009, and believes they were affected by the policy can go to www.dillardeeocsettlement.com, email dillards.settlement@eeoc.gov, or call (213) 894-1032 for more information on how to complete a claim form and potentially collect a monetary award as part of the settlement.  Also, any person who worked at any Dillard's store and believes they were terminated after May 28, 2008 for taking too much leave may also visit the website or call the phone number for more information on the claims process.  

The consent decree further requires that Dillard's hire a consultant with ADA experience to review and revise company policies as appropriate; post documentation related to this settlement; to implement effective training for both supervisors and staff on the ADA with an emphasis on medical inquiries and maximum leave policies; and, to develop a centralized tracking system for employee complaints involving disability discrimination.  Dillard's will submit annual reports to the EEOC verifying compliance with the decree.  

"I am pleased that we were able to resolve this systemic lawsuit on behalf of workers with disabilities," said EEOC General Counsel P. David Lopez.  "The EEOC always stands ready to use our enforcement to advance equal employment opportunities and we have been very successful in ensuring that people with disabilities are protected from workplace discrimination in cases such as EEOC v. Interstate Distributor Company, EEOC v. United Airlines and EEOC v. Verizon Communications."    

Anna Park, regional attorney for the EEOC's Los Angeles District Office, added, "We commend Dillard's for agreeing to measures that will prevent and effectively address potential disability discrimination. Policies and practices that permit medical inquiries without proof of a valid business necessity run afoul of the law, often having large-scale consequences. All employers should carefully examine their own policies and practices to ensure compliance with federal law."

In response to news of settlement, plaintiff Corina Scott stated, "It was humiliating to be fired after expressing my right to keep my medical information private.  I am grateful to the EEOC for assisting me and the many other workers who were also affected."

According to its website, www.dillards.com, Dillard's Inc. ranks among the nation's largest fashion apparel, cosmetics and home furnishings retailers with annual revenues exceeding $6.2 billion.  The Little Rock, Arkansas-based company operates just under 300 stores in 29 states nationwide.

The EEOC is the federal agency that enforces federal laws prohibiting employment discrimination.  Further information about the EEOC is available on the agency's web site at www.eeoc.gov.