Supervalu Settles ADA Suit Alleging Inflexible Leave Policy

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CHICAGO--Supervalu Inc. will pay $3.2 million to 110 former employees to settle a discrimination lawsuit brought by the Equal Employment Opportunity Commission, which alleged that the grocery giant's Jewel-Osco stores operated an overly rigid and illegal disability leave policy (EEOC v. Supervalu Inc., N.D. Ill., No. 1:09cv5637, 1/5/11).

Judge Ronald Guzman of the U.S. District Court for the Northern District of Illinois approved a consent decree Jan. 5 settling litigation under the Americans with Disabilities Act targeting Minneapolis-based Supervalu and its subsidiaries American Drug Stores LLC and Jewel Food Stores Inc. EEOC's suit alleged that the defendants' Jewel-Osco stores in northeastern Illinois and portions of Wisconsin and Indiana operated an arbitrary and inflexible leave policy and illegally terminated more than 100 employees since 2003.

The consent decree establishes a $3.2 million fund, providing approximately $29,000 to each member of the settlement class. An EEOC official said that while approximately 1,000 Jewel-Osco employees were terminated under the leave policy, only 110 were determined to be eligible for settlement proceeds. In addition to the monetary terms, the consent decree requires the defendants to revise their policies and fulfill various training and reporting obligations.

“Not only have we obtained significant financial relief for a large number of former Jewel and Osco employees, the employment practices that these stores use will be greatly improved,’’ commented Gregory Gochanour, EEOC's supervisory trial attorney in the case. “This is a win for the employees and a win for the company as well. It will retain employees who would have been discharged in the past.’’

Supervalu spokesman Luke Friedrich said the company had fully complied with the ADA, but chose to settle the matter to avoid additional litigation costs.

“SUPERVALU and Jewel-Osco do not discriminate on the basis of disability,’’ Friedrich said in an e-mailed message. “In fact, Jewel-Osco has been consistently recognized for its efforts to hire and accommodate people with disabilities.’’

But Gochanour said Jewel-Osco is one of a group of employers that have implemented overly rigid leave policies that do not mesh with the legal requirements of the ADA. He said Jewel-Osco maintained a paid disability leave policy that terminated disabled employees if they could not return to work after a year without any accommodation and without any physical or mental restrictions. Gochanour said the inflexible policy ignored the “individualized analysis’’ and accommodation requirements of the ADA.

Moreover, Gochanour said Jewel-Osco violated the ADA by prohibiting disabled employees from participating in the company's 90-day light duty program if they were not injured on the job.

Gochanour said this is the second major settlement achieved by EEOC's Chicago regional office involving an illegal ADA leave policy.

On Feb. 4, 2010, a federal judge in Chicago approved a $6.2 million settlement involving the retailer Sears Roebuck & Co. EEOC's case alleged that Sears maintained an inflexible leave policy that terminated disabled workers after they exhausted their workers' compensation rights. EEOC alleged that the retailer never offered the 235 affected employees reasonable accommodations that would have permitted them to return to work (EEOC v. Sears Roebuck & Co., N.D. Ill., No. 04 C 7282).

Gochanour said his office is currently conducting additional investigations of employers on this same issue.

Consent Decree Requires Revised Policies.

Under the consent decree, Jewel-Osco will revise its leave policies to conform to the ADA. The company also will communicate with employees taking leave about their return-to-work options.

In addition, the consent decree requires Jewel-Osco to train managers on the legal requirements of the ADA and return-to-work accommodation issues. The company also will be required to provide reports to EEOC on its efforts to accommodate disabled employees attempting to return to work following an injury.

By Michael Bologna


Text of the consent decree can be accessed at http://op.bna.com/dlrcases.nsf/r?Open=smgk-8ctula.