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Strass v. Kaiser Foundation Health Plan of Mid-Atlantic

January 20, 2000

STEPHANIE A. STRASS, APPELLANT,
V.
KAISER FOUNDATION HEALTH PLAN OF MID-ATLANTIC, APPELLEE



Before Wagner, Chief Judge, and Schwelb and Reid, Associate Judges.

The opinion of the court was delivered by: Wagner, Chief Judge

Appeal from the Superior Court of the District of Columbia (Hon. Patricia A. Wynn, Trial Judge)

Argued March 24, 1998

Dissenting opinion by Associate Judge Schwelb at p.

This case involves claims of breach of contract and wrongful termination of employment under the District of Columbia Human Rights Act, D.C. Code § 1-2512 (a)(1) (1992) (Human Rights Act or the Act), which prohibits an employer from discharging an employee for discriminatory reasons, including physical handicap. After being terminated from her employment, appellant, Stephanie Strass, sued her former employer, Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc. (Kaiser), alleging that her employment had been terminated because of her physical handicap, hypertension, in violation of the Human Rights Act and contract of employment. A jury returned a verdict in favor of Strass in the total amount of $525,047.00. The trial court set aside the verdict and granted judgment as a matter of law to Kaiser on both the breach of contract claim and violation of the Human Rights Act. The trial court concluded that Strass failed to prove that her physical condition could be accommodated reasonably. On the breach of contract claim, the court concluded that the evidence was insufficient to permit a jury to conclude that there was an express or implied agreement between Kaiser and Strass. Strass argues on appeal that the evidence and the law support the jury's verdict on both her theories of liability. We agree and reverse and remand for further proceedings consistent with this opinion.

I. Factual Background

In April 1988, Kaiser hired Strass as its Director of Public Affairs. Her job responsibilities included various public relations functions, such as writing publications for members, community relations, media relations, and special events. In addition, Strass was responsible for handling questions arising in the course of Kaiser's dealings with the public. At the beginning of her employment with Kaiser, in addition to Strass, her department had two public affairs representatives, a secretary and one on-call person who worked one day per week. By the late fall of 1990, Strass' department had decreased by two, leaving the Public Relations Department with only one other full-time professional in the Washington office.*fn1

In the late summer of 1991, Strass began experiencing headaches, fatigue, an inability to relax, and insomnia. Strass attributed her symptoms to pressures associated with working with a short staff and preparation for Kaiser's annual board of directors' meeting scheduled to be held in November 1991. On August 15, 1991, Strass reported her symptoms to Dr. Seonae Pak. After several visits in which Strass' blood pressure readings were elevated, Dr. Pak diagnosed Strass as having hypertension, which he attributed to her work situation.*fn2

Dr. Maron testified that Strass' blood pressure was normal from 1977 to August 1991. However, from August 1991 until February 1992, "[a] period of time in which [Strass] was surrounded by employment stresses," Strass' blood pressure was abnormal. Dr. Maron further testified that Strass' abnormal blood pressure reading continued about 46% of the time, through June 1994, two years after Strass' termination from Kaiser. Dr. Maron testified that Strass' hypertension was caused by "an unusual and extraordinary stressful situation related to her employment at Kaiser." He also testified that, to a reasonable degree of medical certainty, if the particular stress situation had been eliminated, her blood pressure would have returned to normal. He also testified that removal of the stress and addressing the condition without medication was the preferable course of action.

In early October 1991, Strass informed her supervisor, Robin Thomashauer, that she had been diagnosed with hypertension and that the stress of preparing for the board meeting with inadequate staff was making her ill. Thomashauer said that Strass' condition and the job situation was not "a good fit." About a week later, Strass went to see Rick Snocker, Kaiser's manager of human resources, seeking a solution to the situation. Snocker suggested during this meeting that Strass' medical condition might qualify for reasonable accommodation. Strass then visited Gary Fernandez, Thomashauer's boss, seeking reasonable accommodation for her illness. Strass suggested restructuring her job, filling the staff vacancies in her office, or transferring her to another position within the organization.

In January 1992, Strass expressed an interest to Thomashauer in a newly created position of Director of Community Relations. In spite of Strass' background in community relations, she was not offered the position. At trial, Thomashauer testified that the position was not given to Strass because it was believed that Strass' bitterness towards the company would inhibit her from effectively representing Kaiser in the community.

In early February 1992, Strass met with Thomashauer and Snocker, and they asked her to consider the Compass Career Reappraisal Program, a program designed to assess the suitability of an employee for his or her current job or another position within Kaiser. On February 18, 1992, Strass conditionally declined the offer for enrollment in the program, stating in writing the following reasons for her decision:

In view of the fact that Kaiser Permanente will not assure me: (1) that my right to privacy will be protected; (2) that the information obtained will be treated as confidential; (3) that the information obtained will not be used to my detriment, I decline to enroll in the Compass Career Reappraisal Program unless my enrollment is required as a condition to remaining employed at Kaiser Permanente.

That same day, Thomashauer gave Strass a memorandum terminating her employment with Kaiser.*fn3 A memo dated the same date was placed in Strass' personnel file indicating that her negative attitude was a factor in her inability to carry out her job responsibilities effectively.

At the time of Strass' termination, Kaiser had a progressive discipline policy in effect. This policy, Section 8.03 of the Personnel Policy Manual, provided for specific steps to be followed prior to termination of employment with Kaiser. There was a disclaimer in the introduction of the Personnel Policy Manual indicating that it was not a contract. However, other language in the document used mandatory terms in setting forth various conditions of employment, including, e.g., vacation, severance pay, health and safety conditions. There was also a declaration that the manual was Kaiser's statement of intention in matters covered by the policy.

II. Analysis

A. Standard of Review

"A judgment notwithstanding the verdict is proper only in extreme cases, where `no reasonable person, viewing the evidence in the light most favorable to the prevailing party, could reach a verdict in favor of that party.'" Lyons v. Barrazotto, 667 A.2d 314, 320 (D.C. 1995) (quoting Oxendine v. Merrell Dow Pharm., Inc., 506 A.2d 1100, 1103 (D.C. 1986), cert. denied, 493 U.S. 1074 (1990) (citations omitted)). If there is some evidence from which the jury could find for a party on the required elements of the claim, or where the resolution of the case requires the resolution of factual issues or a determination of the credibility of witnesses, the case should be submitted to the jury. Id. at 320 (citing Washington Welfare Ass'n, Inc. v. Poindexter, 479 A.2d 313, 315 (D.C. 1984)) (other citation omitted). Where the trial court grants a post-verdict motion for judgment as a matter of law, this court applies the same standard of review on appeal. Id. (citation omitted).

B. Claim Under the Human Rights Act

In setting aside the verdict for Strass, the trial court concluded that the evidence was insufficient to allow a reasonable juror to conclude that Kaiser unlawfully terminated Strass in violation of the Human Rights Act. Specifically, the trial court determined that no reasonable juror could conclude on the evidence presented that Strass was a handicapped person within the meaning of the Act because she had failed to establish that a reasonable accommodation could be made for her claimed disability. Strass argues that the trial court erred in vacating the jury's finding that Kaiser failed to accommodate her physical handicap in violation of the Human Rights Act.

The Human Rights Act "prohibits an employer from discharging an employee based wholly or partially upon discriminatory reasons, including physical handicap." D.C. Code § 1-2512 (a)(1) (1992)*fn4; American Univ. v. Commission on Human Rights, 598 A.2d 416, 421 (D.C. 1991) (citing D.C. Code § 1-2512 (a)(1) (1987)). To establish a prima facie case of discrimination based upon handicap, a claimant is required to prove that

"(a) except for his [or her] physical handicap, he [or she] is qualified to fill the position; (b) he [or she] has a handicap that prevents him from meeting the physical criteria for employment; and (c) the challenged physical standards have a disproportionate impact on persons having the same handicap from which he [or she] suffers. To sustain this prima facie case, there should also be a facial showing or at least plausible reasons to believe that the handicap can be accommodated or that the physical criteria are not `job related.'" American Univ., 598 A.2d at 422 (quoting Prewitt v. United States Postal Serv., 662 F.2d 292, 309-10 (5th Cir. 1981)).

Special interrogatories were submitted to the jury in this case covering each of the foregoing elements. *fn5 The jury found for Strass on each of these issues. In addition, the jury found specifically that Strass had proved "that Kaiser intentionally discriminated against her, in whole or in part, on the basis of her physical handicap."

At the time relevant to this case, the Act defined a physical handicap as "a bodily or mental disablement which may be the result of injury, illness or congenital condition for which reasonable accommodation can be made." *fn6 D.C. Code § 1-2512 (23). Thus, under this statutory definition, Strass had to prove that her claimed disability, hypertension, was a condition for which reasonable accommodation could be made. Id.; American Univ., supra, 598 A.2d at 422. The trial court's decision setting aside the jury's verdict on the claim under the Human Rights Act rested upon its conclusion that Strass had failed to prove there was any reasonable accommodation which Kaiser could have provided that would have enabled Strass to perform the essential functions of her job. While recognizing that usually, the question of reasonableness of accommodation is a question of fact for the jury, the trial court determined that the undisputed facts showed that the accommodations requested were unreasonable as a matter of law. Since this argument forms the basis of the trial court's ruling, we address it first.

Strass proposed two ways for Kaiser to accommodate her condition: (1) restore staff in her department to a full complement of four full-time public affairs representatives; or (2) transfer her to a newly created position of Director of Community Affairs. She contends that the first requested accommodation would have restored the staffing in her department to the level which existed when she handled the position without experiencing hypertension. She contends that the alternative request, a transfer, would have placed her in a position of performing some of the duties required in her public affairs position, but with fewer demands. Thus, Strass argues that the trial court erred in concluding that reasonable accommodation could not be made because it failed to view the facts and reasonable inferences in her favor and accepted Kaiser's evidentiary assessment that Strass' recommended accommodations were merely "speculative."

Assuming first, for the sake of argument, that the accommodations requested would have controlled or eliminated her hypertension, Strass had to show that the accommodations were reasonable. Kaiser argues that Strass' proposed accommodations were not required by law, and the trial court agreed. Specifically, Kaiser contends that an employer is not required to accommodate a handicapped employee by reassigning her to a different position. In support of this argument, Kaiser relies upon the decisions in Guillot v. Garrett, 970 F.2d 1320 (4th Cir. 1992), Chiari v. City of League City, 920 F.2d 311 (5th Cir. 1991), and Carter v. Tisch, 822 F.2d 465 (4th Cir. 1987). Neither Chiari or Carter support Kaiser's position. In Chiari, at issue was whether reasonable accommodation under the Rehabilitation Act of 1973, 29 U.S.C. § 794 (a), required an employee to create a new job for the handicapped individual. *fn7 In Carter, the employee sought as an accommodation a light duty assignment. 822 F.2d at 467. In that case, the court concluded that an alternative assignment was not required "unless the employer normally provides such alternative employment under its existing policies." Id. Here, Strass did not request the company to create a new position, but only that it assign her to a job reasonably available. See School Bd. of Nassau County v. Arline, 480 U.S. 273, 289 n.19 (1987). Although dicta, the Supreme Court stated the rule on this issue in Arline as follows:

Employers have an affirmative obligation to make a reasonable accommodation for a handicapped employee. Although they are not required to find another job for an employee who is not qualified for the job he or she was doing, they cannot deny an employee alternative employment opportunities reasonably available under the employer's existing policies. Id. (citing 45 C.F.R. § 84.12).

This passage tends to support Strass' claim that she should have been considered for another position available in the organization.

In Guillot, the third case relied upon by Kaiser, the 4th Circuit declined to read the passage from Arline as imposing upon the employer an obligation to assign to another position, an employee who was no longer qualified to hold his current position, with or without accommodation. Guillot, supra, 970 F.2d at 1326-27. The employee in Guillot had lost a top security clearance after it was learned that he failed to disclose his drug and alcohol dependency. Therefore, the employee was no longer eligible for the position he had held. The court held in Guillot that reasonable accommodation does not require an employer "to transfer or reassign an employee who is not otherwise qualified for the position he then holds." Id. at 1327. The court did observe, however, that neither "under the Rehabilitation or Civil Rights Acts, may a government agency or department deny the handicapped employee -- because of his handicap -- opportunities that are available under existing statutes or regulations." Id. The primary purpose of the District's Human Rights Act is to eliminate all employment discrimination. See Daka, Inc. v. Breiner, 711 A.2d 86, 94 (D.C. 1998) (citing Estate of Underwood v. National Credit Union Admin., 665 A.2d 621, 637 (D.C. 1995) (referencing the legislative history of the Human Rights Act). It would further that objective to interpret reasonable accommodation to include, as the Supreme Court articulated in Arline, supra, that the employer "cannot deny an employee alternative employment opportunities reasonably available under the employer's existing policies." Arline, 480 U.S. at 289 n.19.

Under the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101 et seq. (1995), the definition of reasonable accommodation includes "job restructuring" and "reassignment to a vacant position." Beck v. University of Wisconsin Bd. of Regents, 75 F.3d 1130, 1135 (D.C. 1996) (citing 42 U.S.C. § 12111(9)); see also Johnston v. Morrison, Inc., 849 F. Supp. 777, 779 (N.D. Ala. 1994). Kaiser points out correctly that this law did not become effective until July 26, 1992, after Strass' discharge. See Morrison v. Carleton Woolen Mills, Inc., 108 F.3d 429, 443 (1st Cir. 1997). The ADA is not retroactive. Id. Kaiser contends, therefore, that this court cannot look to the terms of the ADA or cases decided under it for guidance, unless consistent with prior Rehabilitation Act law. To address this issue, we need not resolve whether this court can look to subsequent enactments and cases based thereon as guidance for the meanings of words in our own pre-existing statute. For, not only is there nothing in the Human Rights Act which would preclude an interpretation of reasonable accommodation in our statute to include the requirement that the employer not deny reasonable alternative and available employment for which the employee is qualified, but that meaning may be inferred within the context of the Act, particularly given its broad purposes. See Arline, supra, 480 U.S. at 289 n.19. Clearly, the employer could not deny her the employment because of her handicap without violating the Human Rights Act. Id. We are persuaded that, in determining whether the employer failed to make reasonable accommodation for Strass' condition, the jury could consider properly evidence that there was a vacant position available which Strass was qualified to fill. The position, according to Strass' evidence, was less demanding. Instead, the company hired for the position someone who, according to the evidence, had difficulties in two other management positions with the company. Considered with the other evidence of how Strass' termination came about, the jury could have concluded that the employer could have, but declined to, accommodate her condition. Kaiser argues that it sought to accommodate Strass in other ways, but that she insisted on only two accommodations. Considering all the evidence and the reasonable inferences therefrom, the jury was at liberty to reject Kaiser's version of the events.

Strass also requested as an accommodation that Kaiser restore the staff removed from her department. Kaiser argues that employers are not required to assign employees or hire new employees to perform an employee's duties in order to accommodate that individual's condition. While job restructuring, under certain circumstances, may be a reasonable accommodation, an employer is not required to reallocate essential functions of a particular position. Johnston, supra, 849 F. Supp. at 779. *fn8 The employer is not required to hire staff to perform the essential functions of the job which the employee cannot perform. Id. at 779-80; accord, Reigel v. Kaiser Found. Health Plan, 859 F. Supp. 963, 973 (E.D.N.C. 1994). An employer is not required "to make fundamental or substantial modifications in its operations to assure every disabled individual the benefit of employment." Id. (citations omitted). Moreover, an employer is not required to place a stress-sensitive employee in a virtually stress-free environment. Pesterfield v. Tennessee Valley Auth., 941 F.2d 437, 442 (6th Cir. 1991).

However, this case is different than Johnston, Reigel, and Pesterfield. Here, there was evidence that Strass could perform her functions before her staff was removed. She did not request additional staff to perform her job; she requested to return to the status quo before she experienced the conditions which brought on the hypertension. The vacancies needed to be filled in order that she could perform her job, and the new staff, presumably, could perform the jobs previously performed by former staff. There was evidence that the company deferred filling the vacancies until after Strass' termination. As Strass summarizes her argument, the jury could have determined from the evidence that the company learned of her disability, attempted to force her to quit by failing to fill the positions on her staff essential to the performance of the job, denied her alternative employment for which she was qualified, and then filled the staff positions for her replacement shortly after she left Kaiser. While an employer is not required to hire employees to perform the functions of the job that a handicapped individual cannot perform, the employer cannot deliberately create conditions which render it impossible for a handicapped person to discharge the responsibilities of the position for the purpose of forcing the handicapped person to quit. That is essentially Strass' claim in this case. *fn9 Although Kaiser offered evidence to counter Strass' evidence as outlined, the jury could have rejected it in favor of Strass' version of the facts. Viewing the evidence in the light most favorable to Strass, it cannot be said that no reasonable juror could find in her favor on the Human Rights Act claim.

Kaiser makes two additional arguments which require only brief discussion. Kaiser argues that no reasonable juror could find that Strass had a physical handicap within the meaning of the Human Rights Act. It contends first that Strass did not prove that she had a perceived or actual disablement and that her condition did not meet the definition of a handicapped person under federal law in that it did not substantially limit one of her major life's functions. *fn10 Our dissenting colleague also takes this position. Instead of applying the definition of handicap which was in effect at the time Strass' claim arose, D.C. Human Rights Act, D.C. Code § 1-2502 (23) *fn11 and regulations then in effect, 33 D.C. Reg. 4546 § 599.1 (August 1,1986), *fn12 they rely principally on the more restrictive requirements of the subsequently amended local statute which redefined the protected class using the term "disability," instead of "handicapped." *fn13 Although the term disability in the amended version of the Human Rights Act is defined in language identical to the federal definition appearing in the Americans with Disabilities Act, 42 U.S.C. § 12102 (2) and federal regulations, the new law and the federal case law interpreting this language, cited in the dissenting opinion, are not controlling in resolving this case which arose under prior law.

Moreover, this issue is not properly before this court. Kaiser did not proceed to trial on the theory that the definition of disability under the subsequent enactment controlled. *fn14 It did not raise this issue in its motion for judgment as a matter of law, and the trial court did not consider it. *fn15 Rather, in its motion, Kaiser relied specifically upon the definition prior to the amendment of the Human Rights Act, i.e., D.C. Code § 1-2502 (23). *fn16 Then, it argued only that Strass did not meet the definitional requirements of § 1-2502 (23) factually because: (1) her condition was controlled by medication and her pressure was low at one point; and (2) there was no showing that reasonable accommodation could be made for her condition. "[I]t is not appropriate at this juncture to inject a different defense theory which was not presented at trial." Vector Realty Group v. 711 14th St., 659 A.2d 230, 233 (D.C. 1994) (citing Easter Seal Soc'y for Disabled Children v. Berry, 627 A.2d 482, 488-89 (D.C. 1993)). There are some differences between federal law and the Human Rights Act and the regulations governing it which define more broadly those covered under the Act. *fn17

Under the provisions of the Human Rights Act in effect at the time her claim arose, it is sufficient that Strass showed that she had a physical disability and that Kaiser discriminated against her in her employment, in whole or in part, because of it. Although Kaiser points to other evidence from which the jury could have found that it had non-discriminatory reasons for discharging Strass, there was evidence from which the jury could have determined that the reasons either did not exist or were pretextual. The jury apparently did that, and there is no basis for disturbing its findings. *fn18

C. Contract Claim

Strass argues that the trial court erred in setting aside the jury's verdict on her breach of contract claim. Strass' theory of recovery was that Kaiser breached its implied contract by terminating her without following the progressive discipline policies outlined in Kaiser's Personnel Policy Manual (Manual), and the jury found in her favor on that claim. *fn19 In granting Kaiser's post-trial motion for judgment as a matter of law, the trial court concluded that "the evidence presented at trial was insufficient to allow a reasonable jury to conclude that there was an express or implied agreement between Kaiser and its employees which superseded the disclaimer in the Manual, or that there were any special circumstances or inducements suggesting that plaintiff had a contract different from that of the other Kaiser employees." Strass argues here, as she did in the trial court, that Kaiser's disclaimers in the Manual do not automatically relieve it of its obligation to follow the progressive discipline policies set forth in the Manual before terminating her employment. She contends that the evidence was sufficient to allow the jury to conclude that Kaiser had that contractual obligation. Kaiser contends that the Manual's contractual disclaimer was unambiguous and that there was no evidence of any agreement which would supersede it. We review first the legal principles governing our resolution of the parties' respective positions and then consider their application to the facts presented at trial.

There is a well-settled presumption in this jurisdiction that "a hiring not accompanied by an expression of a specific term of duration creates an employment relationship terminable at will by either party at any time." Nickens v. Labor Agency of Metro. Washington, 600 A.2d 813, 816 (D.C. 1991) (citations omitted). However, this presumption can be rebutted by evidence that the parties intended that termination be subject to specific preconditions. Id. (citing Washington Welfare Ass'n, Inc. v. Wheeler, 496 A.2d 613, 616 (D.C. 1985)). The terms of an employer's personnel or policy manual may be sufficient to raise a jury question as to whether the manual creates contractual rights for the employee. Wheeler, 496 A.2d at 615; Nickens, 600 A.2d at 817. In Wheeler, the letter of employment specified no period of employment; however, the employer's Personnel Policy and Procedures Manual distinguished between the procedures for discharge of permanent and probationary employees. 496 A.2d at 615. In Wheeler, it was determined that since these terms in the Manual evidenced the parties' intent that certain preconditions be met before the employment could be terminated, the contract was distinguishable from an employment-at-will contract. Id. at 616. Thus, the trial court's decision permitting the case to go to the jury and denying the employer's motion for judgment notwithstanding the verdict was upheld. Id. Similarly, in Nickens, the employee contended that the employer's personnel policies manual established preconditions to termination which the employer breached. 600 A.2d at 817. There, the policies manual required that each staff member receive a copy and "accept 'the position and the Personnel Policies governing his/her employment' in writing," after which the agency head would sign the employee action form. Id. We said that these factors provided evidence that the parties intended the manual to establish contractual rights, or at the very least, raised a factual question for resolution by the factfinder. Id.

The decisions in Wheeler and Nickens show that contractual rights may arise from language in employee manuals. However, employers can effectively disclaim any implied contractual obligation arising from such provisions. Smith v. Union Labor Life Ins. Co., 620 A.2d 265, 269 (D.C. 1993) (citing Goos v. National Ass'n of Realtors, 715 F. Supp. 2, 4 (D.D.C. 1989)). "The legal effect of such a disclaimer is, in the first instance, a question for the court to decide." Id. In Smith, a disclaimer in the personnel handbook stated that "it is not an employment contract and does not guarantee any fixed terms and conditions of employment. . . . Employment for management personnel is for no definite period, is terminable at will and is subject to satisfactory performance." 620 A.2d at 269 n.1. This language, absent facts or circumstances indicating a ...


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