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Supreme Court To Decide Lawfulness of Rehire Restrictions for Drug User and Age-Based Cutoff of Retiree Health Benefits

By Francis P. Alvarez and Paul J. Siegel
  • November 20, 2003

In several cases pending before the United States Supreme Court this term, the Justices will consider the lawfulness of employer policies under major federal anti-discrimination laws. At issue are provisions of the Americans with Disabilities Act as applied to a blanket policy banning the rehire of a former drug user, and allegations of reverse discrimination under the Age Discrimination in Employment Act.

Are "No-Rehire" Policies Lawful Under the ADA?

In Hernandez v. Hughes Missile Systems Company, the U.S. Supreme Court will decide whether the Americans with Disabilities Act precludes an employer from refusing to rehire an employee separated for illegal drug use. In this case, Joel Hernandez worked for the company for 25 years. After testing positive for cocaine, he chose to quit in lieu of termination. When Hernandez reapplied to the company and provided information he was no longer abusing drugs or alcohol, the company allegedly failed to rehire him based on his past drug use. Hernandez sued, claiming the company violated the ADA by refusing to rehire him based on his drug addiction and "regarding" him as disabled. The trial court granted summary judgment for the company, and the Ninth Circuit Court of Appeals reversed.

The Ninth Circuit found the company could not rely on a blanket policy of not rehiring employees who resigned in lieu of termination. As the Court stated, "[the policy] although not unlawful on its face, violates the ADA as applied to former drug addicts whose only work-related offense was testing positive because of their addiction."

Is "Reverse" Age Discrimination Actionable Under the ADEA?

In Cline v. General Dynamics Land Systems, Inc., the U.S. Supreme Court will decide whether the Age Discrimination in Employment Act prohibits "reverse" discrimination. Dennis Cline had worked for the company for 34 years and intended to retire in the near future. Under a new labor agreement with the UAW, the company contracted to provide healthcare benefits only to retirees who had accumulated 30 years of seniority and who were more than 50 years old by July 1, 1997. Cline was only 48 years old by the deadline, and therefore excluded permanently from health benefits after retirement.

Cline and other employees between the ages of 40 and 49 sued under the ADEA, claiming the company could not lawfully treat older employees more favorably simply on the basis of age. The Sixth Circuit Court of Appeals agreed, holding that a reverse discrimination claim is actionable under the ADEA. This decision was in marked contrast to other circuits, which have held an employee cannot successfully sue for reverse discrimination under the ADEA.

The Court heard oral arguments in the Hughes Missile Systems case on October 8, 2003, and in the General Dynamics Land Systems case on November 12, 2003. Both cases have the potential significantly to expand the liability risk for employers should the decisions go against the corporations.

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