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James Johnson v. K Mart Corporation, 273 F.3d 1035, 11th Cir. (2001)
James Johnson v. K Mart Corporation, 273 F.3d 1035, 11th Cir. (2001)
2001)
Appeal from the United States District Court for the Middle District of
Florida
Before CARNES and BARKETT, Circuit Judges, and POLLAK * , District
Judge.
POLLAK, District Judge:
This case presents two questions regarding the interpretation of Title I of
the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. 12101
et seq., in the context of the District Court's grant of a motion to dismiss.
In Part I, we consider the question whether a former employee--as against
a current employee or an applicant--is eligible to file suit under 42 U.S.C.
12112(a), which makes it unlawful to "discriminate [with respect to
employment] against a qualified individual with a disability because of the
disability of such individual . . . ." This court has previously--over strong
dissent--answered the question in the negative. See Gonzales v. Garner
Food Services, Inc., 89 F.3d 1523 (11th Cir. 1996), reh'g denied, 104 F.3d
373 (11th Cir. 1996), cert. denied, 520 U.S. 1229 (1997). Herein we
revisit this question in light of the principles set forth in a subsequent
Supreme Court opinion, Robinson v. Shell Oil Co., 519 U.S. 337 (1997),
which addressed the same question as it arose under a cognate statute,
Title VII of the Civil Rights Act of 1964, answering the question in the
affirmative. In our judgment, Robinson mandates the conclusion that
Gonzales is no longer good law and must be deemed overruled.
Accordingly, appellant is eligible to file suit under Title I. In Part II, we
proceed to the substantive question whether an employee can state a claim
for a violation of the ADA against a private employer when the employer
has offered as a fringe benefit a long-term disability ("LTD") insurance
plan that provides less generous benefits for those employees who
become unable to work as a result of a mental disability than for those
rendered unable to work due to a physical disability.
We begin with a brief description of the factual basis of appellant's claim.
Because the judgment under review granted the defendant's motion to
dismiss, our factual recital assumes the truth of the facts alleged in the
complaint.
Appellant James Johnson worked for K Mart Corporation ("K Mart") for
thirty years beginning in 1967. In 1996, appellant, who was then the
manager of a K Mart store in Tampa, Florida, sought medical treatment
for severe depression and emotional illness. Appellant continued his
employment with K Mart until October, 1997, when his physician advised
him to stop working due to his mental illness. At that time, Johnson
applied for and received long-term disability benefits from K Mart. Under
K Mart's LTD plan, employees who are disabled due to a mental illness
may receive salary-replacement benefits for two years, whereas
employees disabled due to a physical illness may receive such benefits
until age 65.
Johnson filed a charge of discrimination with the Equal Employment
Opportunity Commission ("EEOC") on July 10, 1998, claiming that the
cap on mental health-related disability benefits violated the ADA. After
being issued a Right to Sue letter by the EEOC, appellant brought this
action in the United States District Court for the Middle District of Florida
on November 23, 1998. Appellant amended his complaint in February,
1999, after which K Mart responded by filing a motion to dismiss on two
grounds: (1) that appellant was not within the protective ambit of
12112(a) because, as a former employee, he was not a "qualified
individual with a disability" as that phrase is defined, for ADA purposes,
in 42 U.S.C. 12111(8);1 and (2) that providing different levels of longterm disability benefits to individuals with mental and physical disabilities
did not constitute discrimination within the meaning of the ADA. The
District Court granted K Mart's motion to dismiss without reaching the
question whether Johnson, as a former employee, was eligible to bring this
action, basing its dismissal solely on the finding that K Mart's differential
treatment of mental and physical illnesses was not a violation of the ADA.
The District Court voiced agreement with circuits that have rejected the
argument that an employer violates the ADA by providing differential
levels of long-term disability benefits to employees with physical and
mental disabilities.
Johnson filed a timely appeal. The EEOC, as amicus curiae, filed a brief
supporting plaintiff-appellant on both grounds raised by K Mart in its
motion to dismiss.
DISCUSSION
This court reviews de novo a district court's order dismissing an action for
failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). We may
affirm the District Court's dismissal of Johnson's complaint only if it is
clear that Johnson has not alleged a set of facts that would, if established
at trial, entitle him to relief. Hishon v. King & Spalding, 467 U.S. 69, 73
(1984); Harper v. Blockbuster Entertainment Corp., 139 F.3d 1385, 1387
(11th Cir. 1998).
I Whether Former Employees are Eligible to File Suit Under Title I of the
ADA
We start with the question whether a former employee who is no longer
able to work because of a disability is eligible to challenge a limitation on
post-employment benefits under the ADA. We commence with an
examination of the parties' arguments with respect to the coverage of
former employees because this question is logically antecedent to a
consideration of the merits of appellant's claim.2 Having answered the
question whether Title I covers former employees in the negative in
Gonzales, we agree with the EEOC that it is appropriate in the context of
this case to reexamine the vitality of the Gonzales decision in light of the
Supreme Court's recent analysis in Robinson (holding that 704(a) of
Title VII of the 1964 Civil Rights Act, 42 U.S.C. 2000e-3(a), allows suit
by former employees). See Cargill v. Turpin, 120 F.3d 1366, 1386 (11th
Cir.), cert. denied, 523 U.S. 1080 (1998) ("[O]nly the Supreme Court or
this court sitting en banc can judicially overrule a prior panel decision").
Johnson's entitlement to bring this action turns on the construction of a
number of related sub-sections of the ADA. Our basic task is to construe
42 U.S.C. 12112(a), which contains the general rule under Title I: "No
covered entity shall discriminate against a qualified individual with a
disability because of the disability of such individual in regard to job
application procedures, the hiring, advancement, or discharge of
employees, employee compensation, job training, and other terms,
conditions, and privileges of employment." For help with this task, we
look to the statutory definitions of the key terms "employee" and
"qualified individual with a disability." "The term 'employee' means an
H.R. Rep. No. 485(II), 101st Cong., 2d Sess. 55 (1990), reprinted in 1990
U.S.C.C.A.N. 303, 337 (emphasis supplied).
Id. at 1527.
In Gonzales we saw little merit in the argument that our decision in Bailey
v. USX Corp., 850 F.2d 1506 (11th Cir. 1988) (holding that former
employees are protected under the anti-retaliation provision of Title VII),
was properly transferable to the ADA. We distinguished the protection
provided former employees under the ADA from the protection afforded
former employees from retaliation under 704(a) of Title VII:5
This Court in Bailey cautioned that courts should avoid a literal
interpretation of a statute when such an approach would frustrate the
statute's central purpose. Bailey, 850 F.2d at 1509. There is no such risk in
this case. As this Court in Bailey recognized, the expansion of the term
"employee" to confer standing to sue upon former employees claiming
retaliation is necessary to provide meaning to anti-retaliation statutory
provisions and effectuate congressional intent. Id. There are, however, no
allegations of retaliation in this case, and excluding former employees
from protection under the Act is not inconsistent with the policies
underlying the statute. To the contrary, interpreting the ADA to allow any
disabled former employee to sue a former employer essentially renders the
QID requirement under the Act, that an individual with a disability hold or
desire a position the essential functions of which he or she can perform,
meaningless.
Gonzales, 89 F.3d at 1528-29 (footnotes omitted) (emphasis supplied).
In dissent, Judge Anderson was not persuaded that the ADA protects only
currently active employees. Specifically, the dissent rejected the notion
that the plain meaning of the term "employee" was limited to current
employees, and countered the majority's interpretation of the term
"discriminate" in 12112(b) by emphasizing that the provision "sets out a
nonexclusive list of actions (or types of action) which constitute
discrimination" that focuses on the description of actions rather than on
the description of persons protected by the Act. Id. at 1532 & n.2. Finding
no mandate in the common meaning of the statutory language, Judge
Anderson turned to the structure and purpose of the statute, and reasoned
that these weighed against the majority's interpretation:
The majority acknowledges that the protection of the Act extends to fringe
benefits provided by employers, such as pension and profit-sharing plans
and health benefit plans. It is a matter of common knowledge that fringe
benefit plans routinely and commonly cover retirees and other former
employees. Indeed, pension and profit-sharing plans are designed
primarily for the post-employment years. It is entirely reasonable to infer
that Congress intended the Act's protection to extend to those individuals
routinely and commonly included within such fringe benefit plans. It
would be counter-intuitive, and quite surprising, to suppose (as the
majority nevertheless does) that Congress intended to protect current
employees' fringe benefits, but intended to then abruptly terminate that
protection upon retirement or termination, at precisely the time that those
benefits are designed to materialize. The structure of the statute, in clearly
extending protection to fringe benefit plans, indicates that Congress
intended protection for those routinely and commonly covered by such
employer-provided plans.
Id. at 1532 (footnotes omitted).
With the above overview of Gonzales in mind, we now undertake to
convey the pertinent aspects of Robinson, in which an unanimous
Supreme Court resolved a split among the circuits by holding that the
term "employees"--as used in 704(a) of Title VII of the 1964 Civil
Rights Act, 42 U.S.C. 2003e-3(a) ("It shall be an unlawful employment
practice for an employer to discriminate against any of his employees or
applicants for employment . . . because he has opposed any practice made
an unlawful employment practice by this subtitle . . . ."), and defined in
701(f), 42 U.S.C. 2000e(f) ("The term 'employee' means an individual
employed by an employer . . . .")--includes former employees as well as
current employees and applicants. In Robinson, the plaintiff filed a race
discrimination charge with the EEOC shortly after being discharged by his
former employer. While the EEOC charge was pending, a prospective
employer contacted the plaintiff's former employer for a reference. The
gravamen of the plaintiff's claim was that his former employer provided a
negative reference in retaliation for plaintiff's having filed the EEOC
charge. The Fourth Circuit affirmed the District Court's dismissal of the
complaint for failure to state a claim, concluding that the term
"employees" plainly excludes former employees; that Title VII forbids
practices related to employment, not post-employment; and that the term
"adverse employment action" in 704(a) necessarily refers to actions
taken while a plaintiff is actively employed by the defendant-employer.
See Robinson v. Shell Oil Co., 70 F.3d 325, 329-31 (4th Cir.), rev'd, 519
U.S. 337 (1997).
The Supreme Court, speaking through Justice Thomas, encapsulated
standard rules of statutory construction, stating:
The Court observed that "[a]t first blush" the term "employees" in 704(a)
seems to refer to current employees. However, the Court concluded that such a
perception "does not withstand scrutiny" of the meaning of 704(a). See id. at
341. The Court found that "there is no temporal qualifier in the statute such as
would make plain that 704(a) protects only persons still employed at the time
of the retaliation." Id. Thus, the Robinson Court endorsed an inquiry into the
meaning of statutory terms that extends beyond consideration of isolated words.
Title VII's definition of "employee" likewise lacks any temporal qualifiers and
is consistent with either current or post employment. Section 701(f) defines
"employee" for purposes of Title VII as "an individual employed by an
employer." 42 U.S.C. 2000e(f). The argument that the term "employed," as
used in 701(f), is commonly used to mean "[p]erforming work under an
employer-employee relationship," Black's Law Dictionary 525 (6th ed. 1990),
begs the question by implicitly reading the word "employed" to mean "is
employed." But the word "employed" is not so limited in its possible meanings,
and could just as easily be read to mean "was employed."
Id. at 342.
The Court canvassed other provisions of Title VII in which the term
"employees" was alternately inclusive and exclusive of former employees,
commenting:
But those examples at most demonstrate that the term "employees" may have a
plain meaning in the context of a particular section--not that the term has the
same meaning in all other sections and in all other contexts. Once it is
established that the term "employees" includes former employees in some
sections, but not in others, the term standing alone is necessarily ambiguous and
each section must be analyzed to determine whether the context gives the term
a further meaning that would resolve the issue in dispute.
10
Id. at 343-44.
11
Satisfied that the term "employees" as used in 704(a) is ambiguous, the Court
resolved the ambiguity by turning to the broader context provided by other
sections of Title VII. In particular, the Court observed that 703(a), which
protects against discriminatory discharge, provides an example of a section that
"plainly contemplate[s] that former employees will make use of the remedial
mechanisms of Title VII." Id. at 345. Finally, the Court agreed with the EEOC
that an interpretation of 704(a) to include former employees would be
consistent with the purpose of the anti-retaliation provision to maintain access
to statutory remedial mechanisms, and stated that "to hold otherwise would
effectively vitiate much of the protection afforded by 704(a)," "would provide
a perverse incentive for employers to fire employees who might bring Title VII
claims," and would make it possible for employers "to retaliate with impunity
against an entire class of acts under Title VII--for example, complaints
regarding discriminatory termination." Id. at 345-46.
12
In the case at bar we have been presented with markedly discrepant views as to
the pertinence of Robinson to the ADA. Appellant and the EEOC as amicus
argue that the approach taken by the Court in Robinson undermines the
Gonzales conclusion that the definitions of "qualified individual with a
disability" in 12111(8), of "employee" in 12111(4), and of "discriminate" in
12112(b) unambiguously exclude former employees. We are urged by
appellant and amicus to resolve the ambiguity attributed to those definitions and
hence to 12112(a) ("No covered entity shall discriminate against a qualified
individual with a disability because of the disability of such individual in regard
to . . . terms, conditions, and privileges of employment.") by looking to the
broader context of the ADA and ultimately concluding that Congress intended
to include former employees within the coverage of Title I. To this end,
Johnson and the EEOC invoke opinions of the Second and Third Circuits-Castellano v. City of New York, 142 F.3d 58 (2d Cir. 1998) and Ford v.
Schering-Plough Corp., 145 F.3d 601 (3d Cir.), cert. denied, 525 U.S. 1093
(1999)--which rely on Robinson in holding that former employees are covered
by Title I of the ADA. Conversely, appellee K Mart asserts (1) that the
similarity in the definitions of "employee" in Title VII and the ADA is
irrelevant; (2) that Robinson does not supersede Gonzales because, in Gonzales,
this court distinguished the ADA provision at issue from the Title VII antiretaliation provision; and (3) that the definition of a "qualified individual with a
disability" does contain a temporal qualifier. In support of this last proposition
K Mart puts strong reliance on Weyer v. Twentieth Century Fox Film Corp.,
198 F.3d 1104 (9th Cir. 2000), in which, subsequent to Robinson, the Ninth
Circuit expressed its belief in the continued viability and correctness of
Gonzales.6
13
15
As with the term "employees" in Title VII, the ADA contains an ambiguity
concerning the definition of "qualified individual with a disability" because
there is no temporal qualifier for that definition. Congress could have restricted
the eligibility for plaintiffs under the ADA to current employees or could have
explicitly broadened the eligibility to include former employees. Since
Congress did neither but still created rights regarding disability benefits, we are
left with an ambiguity in the text of the statute regarding eligibility to sue under
Title I.
18
Ford, 145 F.3d at 606-07; see also Castellano, 142 F.3d at 67.
19
Based on our reading of Robinson, we are convinced that this court in Gonzales
and the Ninth Circuit in Weyer have found more clarity in the language of
12111(8) than is justified. Although, "at first blush," the use of the words
"qualified" and "holds or desires" may appear to refer to applicants and current
employees, this initial impression does not withstand the level of scrutiny
required by Robinson, particularly in light of the fact that at least some former
employees were intended beneficiaries of Title I--that is, victims of
discriminatory discharge and those who would benefit from reinstatement. See
Robinson, 519 U.S. at 341. With regard to the Ninth Circuit's argument that all
totally disabled persons are unambiguously excluded from Title I as a result of
the use of the term "qualified," see Weyer, 198 F.3d at 1112, we note that the
word "qualified" is as temporally indefinite as the word "employee." Similarly,
we are unpersuaded by that court's interpretation of 12111(8) in which "hold"
correlates with current employees and "desire" correlates with applicants and
the two words taken together unambiguously exclude former employees. In
Robinson, the Court, construing the use of the words "employees or applicants"
in 704(a), disapproved of the proposition that the inclusion of the term
"applicants" coupled with the term "employees" excludes former employees by
negative inference. The Court concluded that because "applicants" is not
synonymous with "future employees," there is "no basis" for an assumption
that Congress intentionally elected to provide coverage for future and current
employees but to deny coverage for former employees. See Robinson, at 519
U.S. at 344-45. Consistent with this logic, we find that the term "desire" does
not unambiguously exclude former employees when paired with the term
"hold," in part because the word "desire" is susceptible of application to
employees as well as applicants. Set against Robinson and the evidence that
Title I protects former employees from discriminatory discharge and provides
them the remedy of reinstatement, we cannot maintain the holding that the
definition of "qualified individual with a disability" contains an unambiguous
temporal qualifier.
20
21
[T]he legislative history of the ADA specifically states that the purpose of
including the phrase "essential functions" within the QID definition is to
"ensure that employers can continue to require that all applicants and
employees, including those with disabilities, are able to perform the essential,
i.e., the non-marginal functions of the job in question [sic]."
22
23
24
24
25
26
The substantive issue before this court is whether a former employee can state a
claim under Title I of the ADA based on an employer-sponsored long-term
disability insurance plan that provides more limited benefits to individuals with
mental disabilities than to those with physical disabilities. In the case at bar, K
Mart's LTD plan provides disability benefits (payments in lieu of salary) to
employees who have been totally disabled due to mental illness for a maximum
of 24 months. In contrast, the same disability benefits are available to
employees who have been totally disabled due to physical illness until age 65.
The District Court framed the issue as follows: "[T]he question for the Court is
whether the Plan's differential treatment of mental and physical illnesses
qualifies as discrimination under the ADA." The District Court concluded, in
agreement with a number of our sister circuits, that such differential treatment
does not fall within the meaning of the term "discrimination" under the ADA:
27
[S]everal federal circuit courts have addressed and resoundingly rejected the
argument that the ADA is violated when an employer or a state provides
varying benefits or coverage based on the type of disability. See, e.g., Lewis v.
Kmart Corp., 180 F.3d 166, 170 (4th Cir. 1999) (Title I, 102(a) of the ADA,
does not require a long-term disability plan that is sponsored by a private
employer to provide the same level of benefits for mental and physical
disabilities); Rogers v. Dept. of Health and Environmental Control, 174 F.3d
431, 436 (4th Cir. 1999) (denying someone with a mental disability the same
benefits as someone with a physical disability does not violate Title II of the
ADA); Ford v. Schering-Plough Corp., 145 F.3d 601, 608 (3d Cir. 1998)
("ADA does not require equal coverage for every type of disability"), cert.
denied, 119 S. Ct. 850 (1999); Parker v. Metropolitan Life Ins. Co., 121 F.3d
1006, 1019 (6th Cir. 1997) (en banc) (same), cert. denied, 522 U.S. 1084, 118
S. Ct. 871 (1998); EEOC v. CNA Ins. Cos., 96 F.3d 1039, 1045 (7th Cir. 1996)
(same). The Court is persuaded by the reasoning of these courts.
28
29
In Part II(A)(1), we begin our analysis of whether the mental health cap in K
Mart's LTD plan constitutes a legally cognizable form of discrimination with an
examination of the scope of the concept of discrimination prohibited by Title I
of the ADA. Thus, we look primarily to the construction of 12112(a) and
(b). In Part II(A)(2), we consider whether contemporaneous legislative history
clarifies congressional intent regarding the scope of the anti-discrimination
principle in Title I when applied to LTD plans. Finally, in Part II(B), we turn to
the construction of the safe harbor provision in 12201(c) to determine
whether Congress has, as a matter of law, exempted LTD plans like K Mart's
from liability under the Act.
31
32
33
Whether the distinction between physical and mental disability benefits that
marks K Mart's LTD plan is a violation of the ADA or a non-discriminatory
differentiation turns largely on divergent views of the nature of the concept of
discrimination embodied in Title I of the ADA. The District Court and a
number of courts of appeals have concluded that claims based on differential
treatment of people with mental and physical disabilities in LTD plans are not
cognizable under Title I of the ADA because the Act only requires that the
disabled receive access to the same benefits that are available to the nondisabled. In this vein, K Mart contends that the ADA merely prohibits
discrimination between the disabled and the non-disabled. Appellant and the
EEOC, as amicus, argue that the concept of discrimination in the ADA is not so
limited. It is this core disagreement to which we address ourselves initially. We
We begin our analysis with the wording of 12112(a), the general antidiscrimination provision of Title I: "No covered entity shall discriminate against
a qualified individual with a disability because of the disability of such
individual in regard to job application procedures, the hiring, advancement, or
discharge of employees, employee compensation, job training, and other terms,
conditions, and privileges of employment." As the Second Circuit has observed,
the language is "capacious." EEOC v. Staten Island Savings Bank, 207 F.3d
144, 149 (2d Cir. 2000). Section 12112(a) appears to mirror 703(a) of Title
VII, 42 U.S.C. 2000e-2(a): "It shall be an unlawful employment practice for
an employer . . . to discriminate against any individual . . . because of such
individual's race, color, religion, sex, or national origin." Moreover,
12112(b)--which includes in the definition of discrimination a wide array of
actions that "adversely affect[] the opportunities or status of [job applicants or
employees] because of . . . disability"--not only reinforces a broad reading of
the rule against disability-based discrimination but specifically prohibits
discrimination in fringe benefits. See 42 U.S.C. 12112(b)(2) (prohibiting
employers from "participating in a contractual . . . relationship that has the
effect of subjecting a covered entity's qualified . . . employee with a disability
to the discrimination prohibited by this subchapter (such relationship includes a
relationship with an employment or referral agency, labor union, an
organization providing fringe benefits to an employee of the covered entity, or
an organization providing training and apprenticeship programs)") (emphasis
added).
35
The EEOC, as amicus curiae, contends that the District Court erred when it
dismissed appellant's claim, arguing that K Mart's LTD plan is discriminatory
because "it precludes disabled individuals with mental illnesses from obtaining
benefits that are available to all other disabled individuals." In support of its
reading of the statute, the EEOC argues that the Supreme Court in Olmstead v.
L.C., 527 U.S. 581 (1999), on review of our decision, 138 F.3d 893, made clear
that the concept of discrimination embodied in the ADA encompasses
differential treatment of one disabled individual as compared to another
disabled individual.10 Countering this argument, appellee K Mart asserts that its
LTD plan is not discriminatory because the inequity created by the plan exists
between people with physical disabilities and people with mental disabilities.
Notwithstanding that Olmstead arose under Title II, we find that it controls our
understanding of the concept of discrimination embodied in Title I of the ADA.
Both our decision in Olmstead and the subsequent Supreme Court decision
affirming our decision "in substantial part,"13 stand for the proposition that the
ADA demands more than impartial treatment of the disabled as compared to
the non-disabled. The gravamen of a disability-based discrimination claim is
that an individual has been treated less favorably because of her disability. On
this ground, the Supreme Court, speaking through Justice Ginsburg, declined to
adopt the narrow concept of discrimination urged in defense of the state's
action:
37
The State argues that L.C. and E.W. encountered no discrimination "by reason
of" their disabilities because they were not denied community placement on
account of those disabilities. Nor were they subjected to "discrimination," the
State contends, because "'discrimination' necessarily requires uneven treatment
of similarly situated individuals," and L.C. and E.W. had identified no
comparison class, i.e., no similarly situated individuals given preferential
treatment. We are satisfied that Congress had a more comprehensive view of
the concept of discrimination advanced in the ADA.
See Olmstead, 527 U.S. at 598.14
38
Justice Thomas, joined by the Chief Justice and Justice Scalia, dissented in
Olmstead. But the rationale of the dissent adds further support for the
conclusion that Title I of the ADA--like Title II, as construed by the Olmstead
majority--prohibits discrimination among the protected class of disabled
persons. In challenging the majority's construction of Title II, the dissent
argued that the "traditional" concept of discrimination does not encompass
"disparate treatment among members of the same protected class." Olmstead,
527 U.S. at 616. The dissent invoked Alexander v. Choate and Traynor v.
Turnage in support of its view that Title II should be read in the light of this
"traditional" understanding. However, the dissent acknowledged that Title I
40
41
42
The next step in our analysis is to address the question whether--as some
circuits have concluded--the ADA's legislative history should be read as
insulating from liability what otherwise would seem to be discrimination.17 The
legislative history relevant to our discussion consists of three quite similar
Reports issued in 1989 and 1990--one from the Senate Labor and Human
Resources Committee, one from the House Judiciary Committee, and another
from the House Education and Labor Committee. The pertinent portions of
these reports articulated the position that it is permissible for employerprovided health insurance plans to limit coverage of certain "procedures or
treatments" even if doing so would have a disproportionate impact on people
with disabilities, as long as all employees have equal access to the health
insurance plan in question. The Report of the Senate Labor and Human
Resources Committee put the matter this way:
43
44
45
46
To this point in the analysis, our focus has been on ascertaining the meaning
and scope of the general prohibition against disability-based discrimination
contained in 12112(a). We now turn to the construction of 12201(c), which
provides a safe harbor exempting an employer from liability for a bona fide
benefit plan, provided the safe harbor is not used as a "subterfuge to evade the
purposes of" the ADA. Section 12201(c) reads, in pertinent part:
47
Subchapters I through III of this chapter and title IV of this Act shall not be
construed to prohibit or restrict . . .
48
49
Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the
purposes of subchapters I and III of this chapter.
50
In the case at bar, the disputed issue regarding the safe harbor provision is
whether K Mart's adoption of the mental health cap constitutes a use of the safe
harbor provision as "a subterfuge to evade the purposes" of Title I. Because we
are reviewing the District Court's grant of a motion to dismiss, we must
determine whether we can decide this issue as a matter of law on the basis of
the allegations contained in the complaint.
51
Appellant and the EEOC contend that the safe harbor provision, 12201(c), is
used as a "subterfuge" when a disability-based distinction in a benefit plan is
not justified by increased costs demonstrably attributable to the disability.20
Therefore, the EEOC argues that this case must be remanded to the District
Court for a hearing at which K Mart would have the burden of demonstrating
that, taking into account the totality of the circumstances, the mental health cap
is "justified by the risks or costs associated with" mental health disabilities.
Countering this argument, K Mart relies on Public Employees Retirement
System of Ohio v. Betts, 492 U.S. 158 (1989), as support for the assertion that
the burden is on appellant to prove that K Mart used the safe harbor provision
as a "subterfuge" when implementing the mental health cap by showing that K
Mart specifically intended to discriminate on the basis of disability, see Betts,
492 U.S. at 171, and further, that the discrimination was designed to affect the
non-fringe-benefit aspects of the employment relationship. See id. at 177.
Along these lines, K Mart avers that it is exempt from liability as a matter of
law with respect to its LTD plan because plaintiff failed to allege that K Mart
used the LTD plan to discriminate in any non-fringe-benefit aspect of its
employment relationship with Johnson. The common thread between these two
arguments is that both sides discuss Betts, though to different effect.
52
In Betts, the Supreme Court construed the meaning of the word "subterfuge" as
it appeared in an analogous provision of the ADEA. See also United Air Lines,
Inc. v. McMann, 434 U.S. 192 (1977). At the time Betts was decided, 4(f)(2)
of the ADEA, 29 U.S.C. 623(f)(2), provided that:
53
54
(2) to observe the terms of a bona fide seniority system or any bona fide
employee benefit plan such as a retirement, pension, or insurance plan, which is
not a subterfuge to evade the purposes of this chapter, except that no such
employee benefit plan shall excuse the failure to hire any individual, and no
such seniority system or employee benefit plan shall require or permit the
involuntary retirement of any individual specified by section 631(a) of this title
because of the age of such individual[.]
55
56
The EEOC and appellant argue that the reasoning in Betts is not transferable to
the ADA because Congress wrote the subterfuge exception in 12201(c) in
such a way as to reject the Betts construction of the phrase "subterfuge to evade
the purposes" of the Act. In this regard, appellant and amicus rely on both
statutory language and legislative history. When drafting 12201(c), Congress
adopted a different phrasing of the "subterfuge" exception to the safe harbor
than it had in the former 4(f)(2) of the ADEA. The ADA provides that the
safe harbor provision "shall not be used as a subterfuge to evade the purposes
of" the Act, whereas the ADEA provided that the safe harbor provision only
exempted a plan "which is not a subterfuge to evade the purposes of this
chapter" of the ADEA. Appellant and the EEOC assert that the change in focus
from whether a policy is a subterfuge, to whether the safe harbor is used as a
subterfuge, demonstrates that an employer may be understood to use the safe
harbor as a subterfuge when it continues to implement pre-Act terms of a plan.
Appellant and the EEOC also point to contemporaneous legislative history that
lends support to such a construction. See H.R. Rep. 101-485(II), 1990
U.S.C.C.A.N. 303, 419 ("[T]he decision to include this section may not be used
to evade the protections of [the Act], regardless of the date an insurance plan or
employer benefit plan was adopted."). Additionally, appellant and the EEOC
rely on the legislative history for the proposition that the safe harbor provision
is "used as a subterfuge" when a plan contains a disability-based distinction
"except where the refusal, limitation, or rate differential is based on sound
actuarial principles or is related to actual or reasonably anticipated experience."
Id. at 420.
57
58
We conclude that McMann and Betts make clear that if K Mart adopted the
policy of providing differing long-term disability benefits for mental and
physical disabilities prior to the enactment of the ADA, K Mart could not be
found to be using 12201(c) as a subterfuge to evade the purposes of the Act.
If, however, K Mart adopted the mental health cap following the passage of the
ADA, then appellant, in order to impose liability on K Mart, would have to
establish that K Mart, in setting a 24-month cap on mental health disability
Whereas K Mart correctly states that the Betts Court held that a benefit plan is
not a subterfuge under the ADEA's safe harbor provision unless the plaintiff
can show that the employer had a specific intent to interfere with non-fringebenefit aspects of employment, that limitation on the categories of benefits
addressed by the ADEA is not controlling here. While the specific intent
requirement in Betts flows from the ordinary meaning of the phrase "subterfuge
to evade the purposes [of the Act]," the requirement in Betts that discrimination
affect a non-fringe benefit relates to elements of the ADEA's statutory context
that are not shared with the ADA. Specifically, the Court held in Betts that, in
order to be a subterfuge, a plan must discriminate in a non-fringe-benefit aspect
of employment because the Court found that fringe benefit plans were not
included in the ADEA's general prohibition against age discrimination, codified
at 29 U.S.C. 623(a)(1). See Betts, 492 U.S. at 177 ("[U]nder this construction
of the statute, Congress left the employee benefit battle for another day, and
legislated only as to hiring and firing, wages and salaries, and other non-fringebenefit terms and conditions of employment."). Thus, the ADEA's focus on
non-fringe-benefit aspects of employment does not square with the ADA's
express prohibition against disability-based discrimination in fringe benefits
plans contained in 12112(b)(2) of Title I. See Gonzales, 89 F.3d at 1526 ("It
is . . . undisputed that fringe benefits . . . are one set of the 'terms, conditions,
and privileges of employment' protected from unlawful discrimination under
the ADA."). Therefore, we conclude that in the context of the ADA the
subterfuge exception to the safe harbor provision requires that a plaintiff show
that the employer specifically intended to discriminate based on disability,
whether the discrimination was aimed at fringe-benefit or non-fringe-benefit
aspects of the employment relationship.23
CONCLUSION
60
For the reasons stated, we conclude that the District Court erred in granting K
Mart's motion to dismiss. Accordingly, the judgment of the District Court is
reversed and the cause remanded for further proceedings consistent with this
opinion.
61
REVERSED.
Notes:
Honorable. Louis H. Pollak, U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
of such employee or applicant (except where such skills are the factors that the
test purports to measure).
4
For decisions holding that former employees are eligible to bring claims under
the ADA based on limitations placed on post-employment fringe benefits, see
Ford v. Schering-Plough Corp., 145 F.3d 601 (3d Cir. 1998), cert. denied, 525
U.S. 1093 (1999); Castellano v. City of New York, 142 F.3d 58 (2d Cir. 1998).
For decisions holding that former employees are not eligible to bring suit under
the ADA, see Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th
Cir. 2000); EEOC v. CNA Ins. Cos., 96 F.3d 1039 (7th Cir. 1996). See also
Smith v. Midland Brake, Inc., 180 F.3d 1154, 1161 (10th Cir. 1999) (dictum)
(holding that an employee is a "qualified individual with a disability" when he
or she can perform either the essential functions of his or her existing job or of
other jobs within the company that the employee desires). Cf. Beauford v.
Father Flanagan's Boys' Home, 831 F.2d 768 (8th Cir. 1987) (holding former
employees not within protection of 504 of the Rehabilitation Act of 1973, 29
U.S.C. 701 et seq.).
In Bailey we noted that courts have also applied similar rationales to antiretaliation provisions in the Age Discrimination in Employment Act, 29 U.S.C.
621 et seq. ("ADEA") and in the Fair Labor Standards Act of 1938, 29 U.S.C.
201 et seq. ("FLSA"). See Bailey, 850 F.2d at 1509; EEOC v. Cosmair, Inc.,
821 F.2d 1085 (5th Cir. 1987) (ADEA anti-retaliation encompasses former
employees); Dunlop v. Carriage Carpet Co., 548 F.2d 139 (6th Cir. 1977)
(FLSA anti-retaliation provision includes former employees).
Subsequent to the oral argument in this case the Seventh Circuit, in Morgan v.
Joint Admin. Bd., 268 F.3d 456 (7th Cir. 2001), reexamined its pre-Robinson
conclusion that "retired and other former workers are not protected by the
employment provisions of the [ADA]," 268 F.3d at 458, a conclusion that it
had arrived at in EEOC v. CNA Ins. Cos., 96 F.3d 1039 (7th Cir. 1996). The
Seventh Circuit in Morgan reaffirmed CNA, rejecting plaintiffs' argument that
Robinson had undercut its earlier decision.
Additionally, K Mart urges us to rely on an unpublished decision of this court
in which we followed Gonzales. See Bass v. City of Orlando, 203 F.3d 841
(11th Cir. 1999) (per curiam). In Bass we noted that "[w]hile other circuit and
district courts have disagreed with the holding in Gonzales, it is binding
precedent within this Circuit." We are not persuaded that Bass provides us with
much assistance with our current task, not in the least part because in Bass we
did not take note of Robinson.
On a related question, in World Ins. Co. v. Branch, 156 F.3d 1142 (11th Cir.
1998), we vacated as moot a portion of a district court decision regarding a Title
III claim challenging a health insurance provision that limited the coverage of
AIDS-related medical treatments because the policy in question had been
rescinded.
Title III sets forth a general rule against disability-based discrimination in
public accommodations:
No individual shall be discriminated against on the basis of disability in the full
and equal enjoyment of the goods, services, facilities, privileges, advantages, or
accommodations of any place of public accommodation by any person who
owns, leases (or leases to), or operates a place of public accommodation.
42 U.S.C. 12182(a).
Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the
purposes of subchapters I and III of this chapter.
Because K Mart is an employer, we are concerned here specifically with
12201(c)(3).
10
In Olmstead, two women who were mentally ill and also retarded had been
housed in a Georgia state psychiatric hospital. They sued state officials on the
ground that the officials' refusal to transfer them from the institutional setting to
community-based treatment programs in which they would have a greater
opportunity to interact with non-disabled individuals violated Title II of the
ADA. The plaintiffs' treating physicians had found that their needs could be
met in community-based programs and both women desired such transfers. The
District Court granted summary judgment for the plaintiffs, ruling that the state
violated Title II by confining the plaintiffs at the state hospital. When the case
came to this court, we specifically rejected Georgia's contention that the ADA
only prohibits discrimination between the disabled and the non-disabled. We
focused, instead, on whether the confinement was "attributable to" the
plaintiffs' disabilities:
The State's principal argument is that the district court's application of [42
U.S.C.] 12132 and its accompanying regulations is contrary to the ADA's
requirement that a plaintiff prove that he or she faced discrimination "by reason
of such disability." 12132. The State contends that L.C. and E.W. have not
shown that they were denied community placements available to non-disabled
individuals because of disability. In other words, the State argues that the ADA
requires a comparison of the treatment of individuals with disabilities against
that of healthy non-disabled persons. However, as the State must concede, the
confinement of L.C. and E.W. . . . is attributable to their disabilities, thereby
proving the very element the State argues is missing. Reduced to its essence,
the State's argument is that Title II of the ADA affords no protection to
individuals with disabilities who receive public services designed only for
individuals with disabilities.
L.C. v Olmstead, 138 F.3d 893, 896 (11th Cir. 1998), aff'd in part, vacated in
part, and remanded by 527 U.S. 581 (1999).
We held that Title II of the ADA imposes a duty on states that provide
treatment to disabled individuals to provide such treatment in the most
integrated setting appropriate to a disabled individual's needs. See 138 F.3d at
902. In sustaining our holding, the Supreme Court, speaking through Justice
Ginsburg, likewise concluded that the ADA demands more than like treatment
of the disabled and the non-disabled, holding that "unjustified institutional
12
13
The Supreme Court stated: "We affirm the Court of Appeals' decision in
substantial part." Olmstead, 527 U.S. at 597. The Court's limited disagreement
with our ruling focused on the breadth of the "fundamental-alteration" defense
under Title II. See id. at 603-06. The District Court--relying on a simple
comparison between the cost of care in the institutional setting and the cost of
care in a community-based setting--had rejected Georgia's argument that
requiring a transfer of the plaintiffs would result in a fundamental alteration of
the state's programs. Noting evidence that the transfers would require additional
expenditures by the state, we remanded the case for a reassessment of the
state's fundamental-alteration defense. See Olmstead, 138 F.3d at 905. The
Supreme Court ordered a reexamination of the fundamental-alteration defense
somewhat broader in scope than that mandated by this court. The difference
between our remand order and that of the Supreme Court does not bear on the
issue, presented in this case, of the breadth of the concept of discrimination in
the ADA.
14
The Court supported its rejection of the proposition that discrimination requires
uneven treatment of disabled and non-disabled individuals by citing cases
construing the ADEA and Title VII of the 1964 Civil Rights Act to prohibit
discrimination between members of a protected class. See id. at 598 n.10 (citing
O'Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 312 (1996);
Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75, 76 (1998); Jefferies
v. Harris Cty. Community Action Ass'n., 615 F.2d 1025, 1032 (5th Cir. 1980)).
15
16
After the Court decided Olmstead, the Ninth Circuit dismissed a cognate claim
on the authority of Alexander and Traynor, finding Olmstead to be inapposite.
See Weyer, 198 F.3d at 1117-18 (Titles I and III). We respectfully differ with
our Ninth Circuit colleagues. Because we understand Olmstead to establish that
the ADA encompasses a prohibition against discrimination among members of
the protected class, we do not agree that the general prohibition against
discrimination in Title I fails to reach the differentiation at issue here. But see
Kimber v. Thiokol Corp., 196 F.3d 1092, 1101-02 (10th Cir. 1999) (dismissing
a Title I claim challenging a mental-health cap on disability benefits without
discussing Olmstead and in reliance on cases antedating Olmstead).
We note that the Second Circuit, reading Olmstead much as we do, has rejected
the "view that [the] ADA requires no more than evenhanded treatment between
the disabled and non-disabled"; the ADA, according to the Second Circuit,
"generally affords 'individualized protection' against illegal conduct within its
reach." See EEOC v. Staten Island Savings Bank, 207 F.3d 144, 151 (2d Cir.
2000) (Title I). Nevertheless, we are in disagreement with the Second Circuit's
conclusion that the general prohibition against discrimination should be read
narrowly with respect to insurance coverage. See id. We discuss the legislative
history of the ADA, on which the Second Circuit relied for that conclusion,
infra Part II(A)(2). Cf. EEOC v. Aramark, 208 F.3d 266, 268 (D.C. Cir. 2000)
(expressing no opinion as to whether a 24-month mental health cap in an LTD
plan violated Titles I and III, but affirming the District Court's grant of
summary judgment in favor of defendants on the ground that a plan that was
adopted prior to the passage of the ADA was protected by the ADA's safe
harbor provision, a portion of the statute discussed infra Part II(B)).
17
See Staten Island Savings Bank, 207 F.3d at 150. Two cases decided prior to
Olmstead also found support for dismissal in the legislative history. See Ford,
145 F.3d at 610 ("The cases finding no violation of the ADA by a disparity in
benefits between mental and physical disabilities are supported by the ADA's
legislative history."); Rogers, 174 F.3d at 434-35.
18
20
When McMann was decided, 4(f)(2) did not include the phrase, "and no such
seniority system or employee benefit plan shall require or permit the
involuntary retirement of any individual specified by section 631(a) of this title
because of the age of such individual." Congress added this language in 1978,
in response to the McMann opinion. See, e.g., H.R. Conf. Rep. No. 95-950, at 8
(1978).
22
We must presume that Congress was well aware of the Court's construction of
the term "subterfuge" in the 1989 Betts decision when it enacted the ADA in
July, 1990. In response to Betts, Congress amended 4(f)(2) in October, 1990,
thereby removing the term "subterfuge" from that provision and placing the
burden on the employer to prove that its actions are "not intended to evade the
purposes of this chapter," in addition to making other changes. See Older
Workers Benefit Protection Act of 1990, Pub. L. 101-433 (1990). Thus,
Congress demonstrated that when it wanted to avoid the mandates of McMann
and Betts it was fully capable of doing so by selecting different language. See
Aramark, 208 F.3d at 272 ("Congress's addition of the words 'used as' is simply
too thin a reed on which to support appellants' claim that Congress intended to
overrule Betts, remove pre-Act plans from safe harbor protection, and give life
to EEOC's uniformly rejected actuarial justification theory.").
23
62
63
On review of Gonzales and Robinson, it is clear that there is more than a minor
"inconsistency" between the two cases. As Judge Pollak explains, Robinson
explicitly invalidates several of the propositions that informed the Gonzales
Court's conclusion that Title I of the Americans with Disabilities Act ("ADA"),
42 U.S.C. 12101 et. seq., only covers former employees. In both Gonzales
and Robinson, the basic question presented was whether the term "employee"
in an employment discrimination statute only refers to current employees or
includes former employees.1 In both cases, the employer argued that the plain
definition of the term "employee" in an employment discrimination statute
unambiguously refers to current employees. Robinson, 518 U.S. at 339;
Gonzales, 89 F.3d at 1526. The Court in Gonzales agreed, holding that the term
"employee" in Title I was plain and unambiguous, and only referred to current
employees. Gonzales, 89 F.3d at 1526 (interpreting 42 U.S.C. 12111(4)).
However, the Supreme Court in Robinson rejected the notion that the term
"employee," standing alone, is unambiguous, explaining that the term
"employee" "lacks any temporal qualifier and is consistent with either current or
past employment." Robinson, 519 U.S. at 342 (discussing 42 U.S.C. 2000e 3(a)). The Supreme Court indicated that courts should not draw unnecessary
meaning from the fact that the term "employee" is generally defined in an
employment discrimination statute as a "person employed by an employer,"
explaining that the word "employed" in this context "is not . . . limited in its
possible meanings, and could just as easily be read to mean 'was employed'" by
an employer. Id. at 342 (emphasis in original).
65
The Supreme Court applied the same logic to interpret the phrase "applicants or
employees" as it relates to the prohibition against discrimination in the
employment context. Robinson, 519 U.S. at 344 (interpreting 42 U.S.C.
2000e(3)(a)). The Robinson Court explained that "[t]he use of the term
'applicants' [in an employment discrimination statute] does not serve to confine,
by negative inference, the temporal scope of the term 'employees.' . . . [ as this]
argument rests on the incorrect premise that the term 'applicants' is equivalent
to the phrase 'future employees.'" Id. at 344-45. The Robinson Court further
described the analytic flaw that gives rise to this view, explaining:
66
the term "applicants" would seem to cover many persons who will not become
employees. Unsuccessful applicants or those who turn down a job offer, for
example, would have been applicants, but not future employees. And the term
fails to cover certain future employees who may be offered and will accept jobs
without having to apply for those jobs. Because the term "applicants" in
704(a) is not synonymous with the phrase "future employees," there is no basis
for engaging in the further (and questionable) negative inference that inclusion
of the term 'applicants' demonstrates intentional exclusion of former employees.
67
This ruling also severely undercuts the Gonzales Court's interpretation of Title
I, as the Gonzales Court concluded that the plain meaning of the term
"applicants and employees" established that Title I of the ADA only covered
current and future employees. See Gonzales, 89 F.3d at 1527 (interpreting 42
U.S.C. 12112(b)).
68
As shown above, the Robinson Court, analyzed the same terms we examined in
Gonzales and found these terms to be ambiguous. The only remaining basis for
the Gonzales Court's ruling was its view that the phrase "qualified individual
with a disability" in 42 U.S.C. 12111(8) could only be interpreted to mean
current employees, because the provision refers to persons who "hold[] or
desire[]" a position with an employer. Gonzales, 89 F.3d at 1526. However this
proposition is also undercut by the Robinson case, as the Robinson Court
established that courts may not interpret a provision in an employment
discrimination statute to exclude former employees unless they can identify
language in the provision that functions as a clear and explicit "temporal
qualifier." Robinson, 518 U.S. at 343. The Supreme Court explained that
statutory language serves as a "temporal qualifier" when it "specif[ies] the time
frame in which the employment relationship [at issue] must exist." Id. at 342,
n.2. The Robinson Court identified two kinds of language that meet this
requirement. It explained that some statutory provisions will prohibit behavior
or offer remedies which, by definition, only pertain to a certain class of
employees. See id. at 343 (explaining that 42 U.S.C. 2000e-16(b), which
prohibits discrimination in advancement, and 42 U.S.C. 2000e-2(h), which
prohibits discrimination in salary payments or promotions, both, by definition,
only cover current employees). Also, the Robinson Court noted that some
provisions will specifically delineate the time frame to which they apply, and
thereby limit the scope of their coverage. Id. at 343, n.2 (discussing 42 U.S.C.
2000e(b), which provides that Title VII regulates any employer "who has
fifteen or more employees for each working day in each of twenty or more
calendar weeks in the current or preceding calendar year").
69
When viewed under this standard, it is clear that the phrase "holds or desires" in
12111(8) is not a "temporal qualifier." First, the phrase does not prohibit any
Having concluded that the aforementioned Title I provisions do not clearly and
unambiguously define the class of employees protected under the statute, our
remaining task is to determine whether Title I provides a consistent definition
for covered employees in its remaining provisions and, for this reason, has a
clear and unambiguous meaning. See Robinson, 519 U.S. at 341 ("[T]he
plainness or ambiguity of statutory language is determined by reference to the
language itself, the specific context in which the language is used, and the
broader context of the statute as a whole.")
71
Using this framework, it is clear that other provisions in Title I rebut the
inference that the statute only protects current and future employees.
Specifically, 42 U.S.C. 12112(a), which prohibits discriminatory discharge,
and 42 U.S.C. 12117(a), which provides for the remedy of reinstatement, by
definition pertain to former employees. Also, Title I's general definition of
discrimination, 42 U.S.C. 12112(b), suggests that Title I protects former
employees because this provision prohibits employers from administering
programs that discriminate against the disabled in providing "fringe benefits,"
and when interpreting other employment discrimination statutes courts interpret
the term "fringe benefits" to include retirement and other post-employment
medical benefits. See, e.g., Dobbs v. City of Atlanta Georgia, 606 F.2d 557
(5th Cir 1979) (Title VII suit alleging that an employer's racially discriminatory
personnel practices prevented Black employees from accessing high quality
pension plans). The aforementioned provisions make it clear that Congress
designed Title I so that, in various sections, it offers protection to different
groups of employees, in some cases offering protection and remedies to current
employees, and in others extending its protection to former employees, and
potential future employees ("applicants"). Therefore, because the statute does
not provide a "coherent and consistent" definition of covered employees across
its various sections, the Gonzales Court erred in deciding that Title I's "plain
73
74
Judge Carnes cites a number of cases to support his view that, absent an express
statement from the Supreme Court that Gonzales is overruled, the case is still
good law. However no case cited, with the exception of Morris v. City of West
Palm Beach 194 F.3d 1203 (11th Cir. 1999), involved an intervening Supreme
Court case which undercut the basis for an earlier panel's ruling. For example,
in United States v. Chubbuck, 252 F.3d 1300 (11th Cir. 2001), this Court
declined to overrule an Eleventh Circuit panel's interpretation of the term
"conviction" in light of an intervening Florida Supreme Court decision. In
Lapides v. Board of Regents, 251 F.3d 1372 (11th Cir. 2001), this Court
declined to overrule an Eleventh Circuit decision based on arguably conflicting
Eleventh Circuit authority and a Supreme Court concurring opinion. Also, in
United States v. Smith 122 F.3d 1355 (11th Cir. 1997), this Court refused to
change its interpretation of the federal expert witness rules because its ruling
was consistent with Supreme Court precedent, and because it did not find
persuasive the conflicting authority the petitioner offered from other Courts of
Appeal.
75
Saxton v. SCF Industries, 239 F.2d 1209 (11th Cir. 2001) is another case in
which no conflicting Supreme Court decision was at issue; this Court merely
recognized that a prior panel had failed to acknowledge the existence of the
1991 Amendments to Rule 15(c), and it applied the prior panel's rule and
recommended en banc review. Similarly, in Turner v. Beneficial Corporation,
236 F.3d 1023 (11th Cir. 2001), a panel of this Court recognized that a prior
panel had misinterpreted the requirements of the Truth in Lending Act, but the
panel faithfully applied the questionable rule and recommended en banc
review. See also United States v. Steele, 117 F.3d 1231 (11th Cir. 1997)
(recognizing that a prior panel apparently had misunderstood the requirements
for indicting a physician under 28 U.S.C. 855(a)(1) but applying the prior
panel's rule and recommending en banc review).
76
The only case Judge Carnes discusses that considered the effect of an
intervening, related Supreme Court decision on an earlier Eleventh Circuit
decision is Morris v. City of West Palm Beach 194 F.3d at 1207 n.6.2 In
Morris, this Court recognized that Farrar v. Hobby, 506 U.S. 103 (1992), cast
doubt on the viability of the "catalyst test," a court-created modification of the
attorneys' fee provisions under 42 U.S.C. 1988. Although 1988 only
authorizes attorneys' fees for prevailing parties, several courts had used the
"catalyst test" to award plaintiffs attorneys' fees in civil right cases despite the
fact that they did not prevail at trial, when it was clear that the plaintiffs'
lawsuits had pressured the defendants into functionally providing the relief that
was the subject of the plaintiffs' claims. The rationale behind the catalyst test is
that 1988 was designed to compensate any person who acts as a public
attorney general and ensures the enforcement of the civil rights laws, and
plaintiffs in catalyst test cases technically have fulfilled this role. After the
development of this test, the Supreme Court issued its decision in Farrar, which
78
Notes:
1
Some would distinguish Robinson because the case concerns Title VII's
retaliation provisions and therefore, it is argued, it cannot supply guidance on
interpreting the ADA's terms. (Dis. at 2). However, as Judge Anderson
explained in Gonzales, it is clear that Congress intended for Title VII's
provisions and the ADA's provisions to be interpreted similarly, as the ADA in
many cases borrows terms from Title VII (among them the term "employee"
discussed above), the statute's legislative history explicitly indicates that the
ADA incorporates Title VII's definition for many terms it uses (including
"employer," and "employee,") and the EEOC's interpretive guidelines on the
ADA indicate that the analysis performed under the statute is similar to the
analysis conducted under Title VII. See Gonzales, 89 F.3d at 1531-32
(Anderson, dissenting).
2
I recognize that Judge Carnes cites most of the above cases for the proposition
that courts "are not at liberty to disregard binding case law that is closely on
point and has been only weakened, rather than directly overruled, by the
Supreme Court." See, e.g., Morris, 194 F.3d at 1207 n.6 (citing Fla. League of
Professional Lobbyists v. Meggs, 87 F.3d 457, 462 (11th Cir. 1996)); Lapides,
251 F.3d 1378 (same). This quotation is based on the Supreme Court's ruling in
Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 482-86
(1989). See Fla. League of Professional Lobbyists, 87 F.3d at 462 (citing
Rodriguez). On review, however, the Rodriguez case merely stands for the
proposition that when a Court of Appeals is faced with two Supreme Court
cases that apply to the case at bar, the appeals court should follow the directly
applicable precedent, even if it rests on reasoning seemingly rejected in a
related Supreme Court case. The Supreme Court explained that when lower
courts are faced with seemingly conflicting Supreme Court decisions, they
should leave it to the high court to determine which of its decisions are
overruled, or to sort out any conflicts between its rulings. Importantly, Johnson
does not require that this Court sort out any conflicts in Supreme Court
authority but, rather, falls well within the Court of Appeals purview, namely, to
clarify and correct its own law in light of an intervening Supreme Court ruling.
CARNES, Circuit Judge, dissenting:
79
80
The only reason the majority gives for not following the law of the circuit as
established in Gonzales, is the Supreme Court's later decision in Robinson v.
Shell Oil Co., 519 U.S. 337, 117 S. Ct. 843 (1997). The Robinson case,
however, arose and was decided under Title VII, not the ADA, and the two
statutes have different language and different legislative histories. The Supreme
Court in Robinson did not purport to overrule Gonzales or to establish any law
about the ADA. And the majority does not contend that Robinson addressed
any ADA issues or that it purported to overrule Gonzales. Because I think that
the majority's action violates the prior panel precedent rule, which requires that
we follow the Gonzales decision unless and until it is overruled by the Supreme
Court or this Court sitting en banc, I dissent.
81
The prior panel precedent rule is an essential principle, the number one ground
rule, by which all of us on this Court must abide. It helps keep the peace,
stabilizes our circuit law, and promotes efficiency by enabling us to move on
once issues have been decided by a panel. See generally Bonner v. City of
Prichard, 661 F.2d 1206, 1209-10 (11th Cir. 1981) (en banc) (deciding to have
Eleventh Circuit panels bound by all pre-split Fifth Circuit decisions, because "
[s]tability and predictability are essential factors in the proper operation of the
rule of law"); Jaffree v. Wallace, 705 F.2d 1526, 1533 (11th Cir. 1983), aff'd,
472 U.S. 38, 105 S. Ct. 2479 (1985) ("Judicial precedence serves as the
foundation of our federal judicial system. Adherence to it results in stability and
predictability."). Those important goals are achieved because, and only to the
extent that, the prior precedent rule requires a later panel to follow a prior one's
decision even though convinced it is wrong. See generally Cohen v. Office
Depot, Inc., 204 F.3d 1069, 1076 (11th Cir. 2000), cert. denied, 531 U.S. 957,
121 S. Ct. 381 (2000) ("[T]he prior panel precedent rule is not dependent upon
a subsequent panel's appraisal of the initial decision's correctness."); United
States v. Steele, 147 F.3d 1316, 1317 - 18 (11th Cir. 1998) (en banc) ("Under
our prior precedent rule, a panel cannot overrule a prior one's holding even
though convinced it is wrong.") (quoting Cargill v. Turpin, 120 F.3d 1366,
1386 (11th Cir. 1997)).
82
Our allegiance to the prior precedent rule, as well as the proper corrective
mechanism for purging our circuit law of earlier panel errors, is illustrated in
two cases that resulted in en banc decisions earlier this year. One is Saxton v.
ACF Industries, Inc., 239 F.3d 1209 (11th Cir. 2001), rev'd en banc, 254 F.3d
959 (11th Cir. 2001). The panel in that case dutifully followed an earlier one's
holding even though convinced it was wrong. See 239 F.3d at 1215. Then
rehearing en banc was promptly granted and, in a decision written by the author
of the second panel's decision, 254 F.3d at 959, the en banc court overruled the
first panel's erroneous, id. at 963 - 66. The same thing happened in Turner v.
Beneficial Corp., 236 F.3d 643 (11th Cir. 2000), rev'd en banc, 242 F.3d 1023
(11th Cir. 2001), cert. denied, 70 USLW 3234 (Oct. 1, 2001) (No. 00-1799).
The panel in that case also followed a prior panel's decision even though
convinced the earlier panel had overlooked controlling statutory language that
dictated a different result. 236 F.3d at 649 - 50. Rehearing en banc was granted,
236 F.3d 651, and the en banc court overruled the erroneous prior precedent
that had bound the later panel, 242 F.3d 1023, all within the space of two
months. As in Saxton, the en banc opinion in Turner was written for the Court
by the author of the second panel opinion. See also United States v. Steele, 117
F.3d 1231, 1234 - 35 (11th Cir. 1997) (reluctantly following a prior panel
decision even though it had overlooked a controlling statute), rev'd en banc, 147
F.3d 1316 (11th Cir. 1998) (overruling the erroneous prior decision that had
bound the panel), cert. denied, 528 U.S. 933, 120 S. Ct. 335 (1999); Smith v.
GTE Corp., 236 F.3d 1292, 1303 n.10 (11th Cir. 2001) ("The erroneous result
reached by the prior panel whose decision bound the Steele panel was corrected
en banc, which is how erroneous panel decisions should be corrected.")
(internal citation omitted). If the Gonzales panel erred in holding that the ADA
does not apply to former employees - and it is not at all clear to me that its
holding is error - the proper way to change circuit law on the issue is to use this
case as a vehicle for overruling Gonzales en banc, which is how we corrected
erroneous circuit law in Saxton, Turner, and Steele.
83
84
As we have held on numerous occasions, a prior panel decision that has been
weakened but not overruled by a later Supreme Court decision must be
followed by later panels. See United States v. Chubbuck, 252 F.3d 1300, 1305
n.7 (11th Cir. 2001) ("We are not at liberty to disregard binding case law that is
so closely on point and has been only weakened, rather than directly overruled,
by the Supreme Court.") (internal quotes and citation omitted); Lapides v. Bd.
of Regents, 251 F.3d 1372, 1377 n. 3 (11th Cir. 2001) (same); Morris v. City of
West Palm Beach, 194 F.3d 1203, 1207 n.6 (11th Cir. 1999) (same); United
States v. Smith, 122 F.3d 1355, 1359 (11th Cir. 1997) (same), cert. denied, 522
U.S. 1021, 118 S. Ct. 614 (1997); see also N.L.R.B. v. Datapoint Corp., 642
F.2d 123, 129 (5th Cir. Unit A April 1981) ("Without a clearly contrary opinion
of the Supreme Court or of this Court sitting en banc, we cannot overrule a
decision of a prior panel of this Court...."). So, we have said in at least four
decisions that a later panel must follow an earlier one's holding that has been
weakened but not overruled by an intervening Supreme Court decision. Seven
judges of this Court either wrote or joined the opinions in one or more of those
four decisions: Judges Edmondson, Birch, Black, Wilson, Fay, Cox, and me. I
think that we meant what we said.
85
The temptation can be great for a judge to read into an intervening Supreme
Court decision more than is there in order to justify not following a particularly
pesky prior panel precedent. To be tempted in that respect is just human, but we
should resist the temptation. It is critical that when sitting as panel judges we
be diligent in policing the line between prior precedent that has been
contradicted and thereby overruled by intervening Supreme Court precedent,
and that which has been only weakened by it. The strength and integrity of our
prior precedent rule, upon which so much rests, is dependent upon that
distinction.
86
The most that can be justifiably said about the effect of Robinson on the
holding in Gonzales is that some of what is said, but not anything that is held,
in the Robinson opinion arguably weakens some of the reasoning in the
Gonzales opinion. That, however, is not enough for this panel to toss the
Gonzales decision aside. The majority says that "legal precedent provides our
starting point," Majority Op. at 1044, but when prior panel precedent is directly
on point, as the Gonzales decision is, it also ought to be the ending point for
subsequent panels until that controlling precedent has been overruled. Instead of
ending with the controlling precedent of Gonzales, the majority, in its own
words, proceeds to "assess the continuing viability of the components of the
rationale in Gonzales." Majority Op. at 1044. The exception to the prior
precedent rule for intervening Supreme Court decisions does not authorize this
panel to assess the continuing viability of the components of the rationale that
led a prior panel to reach the holding it did. See Cohen, 204 F.3d at 1076 ("
[T]he prior panel precedent rule is not dependent upon a subsequent panel's
appraisal of the initial decision's correctness.").
87
Supreme Court decisions may provide a springboard for the en banc court to
reconsider settled circuit law, but they should not be viewed as an opportunity
for a later panel to cast aside circuit law with which that panel disagrees. A fair
reading of the majority opinion indicates that is what this panel has done. The
question is not, as the majority terms it, whether the reasoning of an intervening
Supreme Court decision has "undermined" the reasoning of a prior panel
precedent, but whether the Supreme Court decision has overruled that prior
precedent. When it comes to their effect on prior panel precedents, Supreme
Court decisions either overrule those precedents, or they do not. So far as a later
panel is concerned, the effect of a Supreme Court precedent is all or nothing.
And here it is nothing, so far as this panel (to be distinguished from the en banc
court) is concerned. The Supreme Court's Robinson decision does not explicitly
overrule Gonzales or its holding. Nor does Robinson clearly contradict
Gonzales to the point of implicitly overruling it.
88
The extent to which the majority's decision defies our prior panel precedent rule
is evident from the fact that the Supreme Court in Robinson held nothing more
than what this Court had already held before the Gonzales decision was
released. This Court had held in Bailey v. USX Corp., 850 F.2d 1506 (11th Cir.
1988), that former employees may sue under the anti-retaliation provision of
Title VII. The plaintiff in Gonzales, relying on Bailey, argued by analogy that
the same should be true of former employees and the ADA. 89 F.3d at 1527.
The Gonzales panel acknowledged that Title VII's anti-retaliation clause
applied to former employees, as Bailey had held, but it distinguished that
provision of Title VII from the ADA on the basis of the different statutory
language and legislative history. Id. at 1527 - 29. What the Supreme Court did
in Robinson was agree with our circuit law, as set out in Bailey, that Title VII's
anti-retaliation provision does apply to former employees, something the
Gonzales panel itself had acknowledged and considered in deciding that the
ADA does not. It is a bit audacious for the majority to say that a Supreme Court
decision whose holding was anticipated, acknowledged, and considered by a
prior panel when deciding a different issue has undermined that prior panel's
decision on the different issue to such an extent that it may be disregarded.
89
The fact that the Supreme Court's Robinson decision is not inconsistent with
our Gonzales precedent is also evident from the post-Robinson decisions of two
other federal court of appeals which reached exactly the same conclusion as
Gonzales even in the wake of Robinson. The Court in Weyer v. Twentieth
Century Fox Film Corp., 198 F.3d 1104, 1112 (9th Cir. 2000), squarely faced
the issue of whether the Supreme Court's Robinson decision was inconsistent
with the holding of this Court in Gonzales and of other circuits that had reached
the same conclusion this circuit had in Gonzales. After contrasting the language
of the ADA with that of Title VII, and fully considering the Supreme Court's
Robinson decision, the Ninth Circuit, which was not bound to accord our
Gonzales decision any presumption or deference, nonetheless followed
Gonzales. It did so after concluding that Robinson had not undermined
Gonzales. Weyer, 198 F.3d at 1108 - 13.
90
Likewise, in Morgan v. Joint Admin. Bd., 268 F.3d 456, (7th Cir.2001), the
Seventh Circuit re-affirmed its pre-Robinson decision holding that the former
employees are not protected by the employment provisions of the ADA. After
pointing out that the ADA requires plaintiffs to be able to perform the essential
functions of their job before they are entitled to the protection of the Act, the
Court pointedly asked about whether former employees are covered: "How
could they be? They cannot perform the essential functions of their job, and
therefore they have no rights under the statutory provisions [of the ADA]." Id.
at 458.
91
The plaintiffs in Morgan conceded that EEOC v. CNA Ins. Cos., 96 F.3d 1039
(7th Cir. 1996),a pre-Robinson decision of the Seventh Circuit panel, had held
that the ADA does not apply to former employees, but they asked the Court to
re-examine that position in light of Robinson's holding that Title VII's antiretaliation provision does apply to former employees. Id. at 458. The Court
concluded that Robinson had changed nothing about Seventh Circuit law on the
ADA, reasoning that there is a "stark" difference between the anti-retaliation
provision of Title VII and the employment provisions of the ADA, and that
extending the scope of the ADA to former employees would "create perverse
incentives" resulting in fewer employers offering disability benefits to their
workers. Id.
92
Further, the Morgan Court observed that in CNA the panel had considered the
very reasoning that would later be adopted by Robinson in a Title VII
retaliation case, and had declined to apply it to the ADA. Morgan, 268 F.3d at
458. ("We anticipated the difference between [the Title VII] situation and the
one here in the case the plaintiffs ask us to overrule."). Because CNA had
already distinguished Robinson's Title VII-retaliation situation from that of an
ADA case not involving retaliation, the Morgan Court recognized that
Robinson did not govern the case before it, and followed the prior panel
decision, CNA. Similarly, as noted above, our Gonzales opinion distinguished
Bailey, a Title VII retaliation case, from the case before it, an ADA case. Thus
Gonzales, just like CNA, anticipated Robinson's Title VII arguments and
rejected their applicability to an ADA case. In Morgan, the Seventh Circuit
respected its CNA decision, specifically its distinction between Title VII and
the ADA. In this case, our prior panel precedent rule requires that this panel
afford the same respect to Gonzales.
93
Gonzales). See Ford v. Schering-Plough Corp., 145 F.3d 601 (3rd Cir. 1998),
cert. denied, 525 U.S. 1093, 119 S. Ct. 850 (1999); Castellano v. City of New
York, 142 F.3d 58 (2d Cir. 1998). The point, however, is not whether Weyer
and Morgan are right or wrong on the ultimate issue involving the scope of the
ADA as it concerns former employees. The point is that Weyer and Morgan
irrefutably demonstrate that reasonable jurists can conclude Robinson does not
undermine or contradict Gonzales to the point of overruling it, because two
panels composed of six federal court of appeals judges have reached the same
conclusion as Gonzales after they fully examined and considered Robinson.
94
In view of that, Judge Barkett's statement that "there is no doubt that the
Robinson Court's decision invalidates Gonzales" is one with which I cannot
agree. Judge Barkett obviously disagrees with the conclusions of Judges Flaum,
Posner, and Williams of the Seventh Circuit in Morgan and of Judges Beezer,
Wiggins, and Kleinfeld of the Ninth Circuit in Weyer, but the fact that there is
disagreement, and a two-to-two split of the other circuits that have addressed
the issue since Robinson was released proves that there is substantial doubt
about whether Robinson overruled or undermined to the point of abrogation the
Gonzales decision.
95
That ought to be all this panel needs to know in order to decide this appeal,
because if reasonable jurists can disagree about whether a Supreme Court
decision contradicts the holding of a prior panel, as they undeniably have, that
prior panel holding must be followed. The prior panel precedent rule - the
fundamental ground rule under which we operate as members of a court that
sits in panels, the rule that keeps the peace among us, and the rule that is
essential to the stability and predictability of our circuit law - demands no less.
96
I express no view on how I would vote to decide the ADA coverage issue if we
were reconsidering it en banc, see generally United States v. Steele, 147 F.3d at
1318 (en banc court not bound by prior panel decisions), nor do I express any
view on the other issue the panel addresses (the one involving differential
treatment of the mentally and physically disabled), because that issue would be
moot if this panel followed Gonzales, as it is bound to and should do.
97
ORDER ON REHEARING
99
IT IS ORDERED that the above cause shall be reheard by this court en banc.
The previous panel's opinion is hereby vacated.