Employer Must Pay Cost of Medical Testing It Required of an Applicant with Perceived Disability

Category: Client Update
Date: Oct 3, 2018 03:43 PM

Russell Holt applied for a position with the BNSF Railway Company (“BNSF”) and received a conditional job offer.  As part of the application process, BNSF required Holt and other applicants to undergo a medical exam.  Holt’s exam revealed he had injured his back several years earlier.  In response to BNSF’s request for additional information, Holt submitted his medical records and a note from his medical provider which stated that Holt was able to function normally.  BNSF’s medical representative requested further information, including a current MRI of Holt’s back.

When Holt learned that an MRI costs more than $2,500, he requested that BNSF waive the MRI requirement.  BNSF informed Holt that he would not be hired without the MRI, and rescinded its job offer when Holt did not provide one.  Holt filed an EEOC complaint alleging that BNSF violated Americans With Disabilities Act (ADA) restrictions on the use of medical exams.

The ADA generally prohibits employers from discriminating against a qualified individual on the basis of disability in regard to job application procedures or hiring and other terms, conditions, and privileges of employment.

The issues decided in this case were whether Holt had a disability as defined in the ADA, and whether BNSF discriminated against Holt because of his disability.  The parties did not dispute that Holt was qualified.

First, the Ninth Circuit found that BNSF perceived Holt as an individual with a physical impairment – a back injury.  The ADA’s definition of “perceived impairment” encompasses “situations where an employer assumes an employee has an impairment or disability.”  In this case, BNSF requested that Holt complete an MRI examination because of his back condition, conditioned his employment offer on completion of the MRI, and treated him like an applicant whose MRI revealed a physical impairment.  Therefore, Holt had a perceived disability as defined in the ADA.

Next, the court found that although the ADA is silent on the issue, the ADA nonetheless requires employers, and not employees, to pay the cost of post-offer, pre-employment medical testing of an applicant with a perceived impairment.  The court noted that an employer would not violate the ADA if it required all applicants receiving a conditional offer to participate in follow up medical testing at their own expense.  But requiring an applicant with a perceived disability to shoulder the cost of follow up testing imposes “an additional financial burden on a person with a disability because of that person’s disability.”  In that scenario, the ADA requires the employer to bear the cost of the additional testing. 

This approach is consistent with the ADA’s requirement that employers pay for reasonable accommodations, unless doing so creates an undue hardship.  BNSF discriminated against Holt because of his perceived lower back impairment when it required him, and not all other applicants, to undergo further medical testing at his own expense.  This is the case whether the follow up testing is inexpensive or would be a significant cost to the applicant.

Finally, the court rejected BNSF’s argument that the company was simply attempting to confirm the condition of Holt’s back through the MRI.  ADA regulation 12112 allows employers to require post-offer medical exams, and allows employers to condition an offer upon the results of the exam, but states that these medical exams can only be given if “all entering employees are subjected to such an examination regardless of disability.” BNSF’s treatment of Holt did not meet these requirements.

Thus, the Ninth Circuit affirmed the trial court order granting summary judgment in favor of Holt, and finding BNSF liable for disability discrimination.

EEOC v. BNSF Railway Company, 2018 WL 4100185, as amended (9th Cir. Sept. 12, 2018).

Note: 

Agencies should pay for post-offer, pre-employment medical testing that does not apply to all job applicants.  Be sure to follow the reasonable accommodation process by considering all accommodations that may be available to an applicant with an actual or perceived disability.  The employer should document the reason why the accommodation is or is not reasonable.

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