Employers often are faced with multiple obligations when addressing how to treat an employee who cannot perform his or her job duties due to physical or mental limitations. Recent large settlements with the United States Equal Employment Opportunity Commission ("EEOC") indicate that securing compliance with these obligations may become a priority for the EEOC.

The EEOC's Chicago office recently reached two multi-million dollar settlements with large retailers regarding allegations that these employers applied disability leave policies that violated the Americans with Disabilities Act ("ADA"). On January 5, 2011, a consent decree was issued approving a settlement with the EEOC that will pay $3.2 million to 110 former employees regarding an allegedly illegal disability leave policy. Nearly a year ago, Sears Roebuck & Co. also entered into a $6.2 million settlement with the EEOC regarding an allegedly unlawful leave policy.

In the recent decision, the EEOC alleged that stores maintained a paid disability leave policy under which disabled employees were terminated from employment if they could not return to work after a year without any physical or mental restrictions and without any accommodations. The EEOC asserted that the policy violated the "individualized analysis" the ADA requires employers to perform to determine whether an employee with a disability can be reasonably accommodated. The EEOC also alleged that the company violated the ADA by prohibiting disabled employees from participating in the company's 90-day light-duty program for employees injured on the job.

Employers generally are not required to create light-duty positions as a form of reasonable accommodation to disabled employees. Nonetheless, employers often attempt to reduce their workers’ compensation costs by assigning employees with work-related injuries to "light duty" positions. In its 1996 EEOC Enforcement Guidance: Workers Compensation and the AD, Q&A No. 29, however, the EEOC stated that vacant light-duty assignments cannot be reserved only for employees suffering workplace injuries, but must be available to fulfill the employer's reasonable accommodation obligations under the ADA to any disabled employee.

Accordingly, employers who require employees to return to work within a fixed period of time and without restrictions, but do not include an individualized evaluation of whether additional leave time or some other accommodation would be reasonable, and employers who limit light duty positions exclusively to employees suffering from work-related injuries, may become the subject of future enforcement actions by the EEOC.