Issue: The ADA prohibits “association discrimination” against employees

For the week of March 3, 2008

Under the Americans with Disabilities Act, an employer is specifically prohibited from "association discrimination," which the statute defines as discriminating against an employee on the basis of a "known disability of an individual with whom [that employee] is known to have a relationship or association." Although this issue is not litigated as frequently as other sections of the ADA, the 7th U.S. Circuit Court of Appeals recently raised this provision to reverse the dismissal of a nurse-employee’s claim against her hospital-employer. Dewitt v. Proctor Hospital, 7th Circ., No. 07-1957, February 27, 2008. In that case, the nurse claimed that her employment termination was based upon the fact that the cost of her husband’s cancer treatment was viewed by the self-insured hospital as inordinately high. The 7th Circuit’s decision will allow the claim to go forward to a jury.

Phillis Dewitt, a registered nurse, was hired by Proctor Hospital in Peoria, Illinois in September of 2001. After working on an as-needed basis for a month, Dewitt was promoted to the permanent position of clinical manager, where she supervised nurses and other hospital staff members. Dewitt’s performance was rated as "outstanding" by her supervisor, Mary Jane Davis.
Dewitt and her husband were covered under Proctor’s health insurance plan, which was largely self-funded – the hospital paid for members’ covered medical costs up to $250,000 each year, with costs in excess of that amount covered by the Standard Security Life Insurance Company of New York. Throughout Dewitt’s employment at the hospital, Dewitt’s husband suffered from prostate cancer. His medical treatment was continuous and expensive, and was paid for through the hospital’s self-coverage.

Proctor reviewed medical coverage costs periodically, and documented medical claims in quarterly "stop-loss" reports, which listed all employees whose recent medical claims had exceeded $25,000 within the quarter. Dewitt’s claims were listed on reports in 2003, 2004, and 2005.

In September 2004, Dewitt was confronted by Davis, her supervisor, who told her that a committee was reviewing Anthony’s medical expenses, which the hospital felt were unusually high; Davis then asked Dewitt about the type of treatment being received by Anthony for his cancer. When Dewitt responded that her husband was receiving both chemotherapy and radiation, Davis asked whether she had considered hospice care, a less expensive alternative. Dewitt responded that her husband’s doctor considered hospice care to be premature. In February 2005, Davis again raised the treatment issue with Dewitt, and was told that Anthony’s status had not changed.

At a meeting of clinical managers in May of 2005, Davis informed employees that the hospital was facing financial troubles and would take "creative" efforts to cut costs. On August 3, 2005, Dewitt was fired from her job, and was designated as "ineligible for rehire" by Proctor. The hospital continued to provide medical benefits through the end of August; after that, Dewitt paid for COBRA coverage. Anthony Dewitt died on August 6, 2006.

Dewitt filed a lawsuit against Proctor, alleging age, gender, and disability discrimination claims. The district court granted summary judgment to the hospital on all three claims. On appeal, the Seventh Circuit upheld the dismissal of the age and gender claims, but reversed it as to the ADA claim, finding a factual dispute on the issue of whether the hospital’s action was based on "association discrimination."

The uncontroverted evidence showed that: (1) Proctor was concerned about its financial status; (2) Dewitt’s medical claims were paid under the hospital’s self-insured limits; (3) Anthony Dewitt’s medical expenses regularly were included on the quarterly stop-loss reports; (4) Proctor informed its clinical managers that the hospital had to be "creative" in its cost cutting; (5) Davis asked Dewitt specifically about Anthony’s treatments, and suggested less expensive hospice; and (6) Dewitt was terminated (with an unexplained "no re-hire" designation) within months of her discussions with Davis. The Court found that these facts constituted evidence that association discrimination may have motivated Proctor to fire Dewitt, and that a jury should be allowed to decide the claim.

While Dewitt’s case seems compelling, the concurring opinion by Judge Posner raises an interesting issue, and one that may have changed the outcome of the case. Posner points out that the hospital failed to produce any evidence of a non-discriminatory reason for terminating Dewitt. If, in fact, that information had been available to the Court, it may have allowed the case to be reviewed under the often used "shifting burden" analysis. In that instance, had the hospital been able to provide a legitimate business reason for Dewitt’s termination, the burden would shift back to Dewitt to prove that the proffered reason was simply a pretext for discrimination.

This case is another example of why complete and objective documentation is critical as a basis for employment decisions. Had the hospital produced documentation of performance-related issues (or another valid non-discriminatory basis) for its decision regarding Dewitt’s discharge, and had Dewitt been unable to provide evidence that the hospital’s proffered reason was untrue or that her alleged "association discrimination" motivated the firing, the Seventh Circuit may have affirmed dismissal of the claim.