By:   Brendan J. Begley

A federal appellate court in the Midwest issued a decision this week that may provide a false sense of security to California employers regarding the extent of their obligation to accommodate disabled employees. See Basden v. Professional Transportation, Inc., Case No. 11-2880 (7th Cir. May 8, 2013).

The Seventh U.S. Court of Appeals ruled that employers are not always liable under the Americans with Disabilities Act (“ADA”) for failing to discuss possible accommodations with a disabled employee. Instead, the ADA imposes such liability only if the employee can prove that the dialogue would have uncovered an accommodation that would have enabled the employee to perform the essential functions of the job.

Two appellate courts in California have reached the same conclusion concerning an employer’s obligations under the California Fair Employment and Housing Act (“FEHA”). See Nadaf-Rahrov v. Neiman Marcus Group, Inc., 166 Cal. App. 4th 952 (2008), and Scotch v. The Art Institute of California, 173 Cal. App. 4th 986 (2009).

On the other hand, three appellate courts in California have at least hinted that an employer may be liable under the FEHA for the mere failure to engage in the interactive process – regardless of whether an accommodation would have been discovered through that exchange. See Wysinger v. Automobile Club of Southern California,157 Cal. App. 4th 413 (2007), Gelfo v. Lockheed Martin Corp., 140 Cal. App. 4th 34 (2006), and Claudio v. Regents of the University of California, 134 Cal.App.4th 224 (2005).

Unless and until the California Supreme Court steps in to resolve this conflict, it will remain uncertain whether employers in the Golden State can be liable merely for failing to engage in that statutorily required dialogue with disabled employees. Given that ambiguity, trial court judges in California are free to choose whichever line of decisions they believe to be more persuasive.

This freedom does not always result in a favorable outcome for employers. For example, in recent weeks a trial court in Sacramento awarded $275,000 in emotional-distress damages against an employer who, according to the jury, failed to engage in the interactive process with a disabled employee. However, the jury also found that the employee was not able to perform the essential functions of his job even with an accommodation. After the attorneys for both sides filed briefs concerning the split in California authorities on this issue, the trial judge let the verdict stand and ordered to employer to pay the employee’s attorney fees – which exceeded $350,000.

Therefore, employers who wish to reduce their risk of exposure to such liability should engage in and document the interactive process with any employee who has a known disability or who is perceived to have a disability. Employers also would be well advised to consult with an attorney who is knowledgeable in the area of disability accommodations to help chart that path. In addition to reducing the risk of an adverse judgment, taking such inexpensive steps at the outset may produce the added benefit of promoting workplace morale and efficiency.