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EEOC Raises ADA Claim for Diabetic Worker Who Violated Walgreens ‘Anti-Grazing' Rule

Tuesday, April 15, 2014

April 14 --A jury should decide whether Walgreen Co. acted out of business necessity when it fired an employee with diabetes who opened a bag of potato chips during an alleged hypoglycemic attack without first paying for the chips, a federal judge in San Francisco ruled April 11.

Denying summary judgment for Walgreens in an Americans with Disabilities Act case brought by the Equal Employment Opportunity Commission, the U.S. District Court for the Northern District of California rejected the contention that Josephina Hernandez's disability didn't provide her with cover from discharge for violating the company's “anti-grazing” rule.

According to Walgreens, the policy is applied uniformly to all employees and is in place because the company loses more than $350 million per year because of worker theft.

But Judge William H. Orrick said that, under U.S. Court of Appeals for the Ninth Circuit precedent, worker misconduct resulting from a disability must be considered to be part of the disability. The EEOC, he found, raised triable questions on whether Hernandez's disability was the cause of her prohibited “grazing” and thus whether her termination was causally related to her disability.

In addition, “whether Walgreens should have been required to 'accommodate' [Hernandez's] stealing as a 'reasonable' accommodation is for the jury to determine,” Orrick wrote.

Chips Cost $1.39

According to the EEOC's September 2011 lawsuit, the price of the potato chips was $1.39, and Hernandez took them during an attack of low blood sugar or hypoglycemia while stocking store shelves.

Hernandez had permission from Walgreens for the prior 13 years to bring candy to work with her in case of an attack, but she didn't have any with her on the day in question. She allegedly tried to pay for the chips soon after taking them, but there was no one at the counter where employees paid for store merchandise.

During Hernandez's 18 years at Walgreens, her store manager and other managers in his district were consistent in firing employees for theft regardless of their rank, employment history or the value of the items taken, the court found.

Agency Guidance No Bar

In finding trial-worthy issues, Orrick rejected Walgreens's attempted reliance on out-of-circuit cases instead of binding Ninth Circuit authority.

Although the Ninth Circuit makes an exception from its general rule for worker misconduct involving egregious criminal conduct--or stemming from drug or alcohol use--Walgreens failed to show Hernandez's action was criminal or egregious, the judge said.


“[W]hether Walgreens should have been required to 'accommodate' [the employee's] stealing as a 'reasonable' accommodation is for the jury to determine,” Judge Orrick wrote.  

The company's arguments that Hernandez failed to accommodate herself because she didn't bring candy to work that day and that she never asked to be permitted to consume store merchandise without first paying for it as an accommodation likewise are without merit, the court said.

Because under circuit precedent Walgreens's explanation for firing Hernandez wasn't a legitimate, nondiscriminatory reason, the EEOC didn't need to show pretext, Orrick said.

The EEOC's claim doesn't conflict with the agency's guidance, which states that employers need to show business necessity when taking employment action against a disabled employee for workplace misconduct, the judge found.

He also took judicial notice of an EEOC regulation limiting the type of documents employers may use as a defense against liability for discrimination, and found that Walgreens didn't show the guidance it cited met the regulation's standard.

Cindy O'Hara represented the EEOC. Weintraub Tobin Chediak Coleman Grodin represented Walgreens.


Text of the opinion is available at http://www.bloomberglaw.com/public/document/Equal_Employment_Opportunity_Commission_v_Walgreen_Co_Docket_No_3/2.

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