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Walmart Worker’s Suit Over Medical Leave, Disability Revived (1)

Oct. 6, 2020, 5:19 PM; Updated: Oct. 7, 2020, 11:46 AM

Walmart Stores Inc. may have violated federal disability and medical leave laws when it fired a distribution center worker after she declined a temporary light-duty assignment that she couldn’t travel to because of a foot injury, the Ninth Circuit ruled.

The company says Stefany Hazelett’s termination was spurred by her refusal to work the light duty it offered her as an accommodation for her disability and her failure to apply for leave under the Family and Medical Leave Act.

But a jury could find Walmart’s set up for administering FMLA leave requests and workers’ compensation—which Hazelett was granted—confused her and that the company failed to engage Hazelett in the interactive job-accommodation process required by the Americans with Disabilities Act, the U.S. Court of Appeals for the Ninth Circuit said Tuesday. It remanded the case for a trial on her FMLA interference and disability discrimination claims but said the district court can review whether Hazelett sued in time under the ADA before sending that claim to a jury.

A third-party administrator handles both employee FMLA and workers’ compensation claims for Walmart, the court said. But it divides those functions among two different departments and Hazelett says she didn’t know she had to separately communicate with both departments, the court said.

The light duty Hazelett was offered would have required her to “report in the wee hours of the morning when no public transportation, save a taxi, was available,” the court said. And the written offer she received for the position instructed her that she could lose her job and workers’ compensation benefits if she declined the offer, the court said.

FMLA regulations state that a worker may lose workers’ compensation for turning down light-duty work while injured, but the FMLA still protects the worker’s job while she is on approved leave, the court said.

A jury could find Walmart’s policies “ambiguous” and must determine whether they effectively interfered with Hazelett’s exercise of her FMLA rights, the court said.

Walmart may have failed to accommodate Hazelett by refusing to let her stay on leave until she was able to drive or by not offering her a more workable temporary assignment, the court said.

Summary judgment was proper on Hazelett’s retaliation claims, the court said.

“We are pleased that the Ninth Circuit agreed that Walmart did not retaliate against Ms. Hazelett for exercising her rights,” a Walmart spokesman told Bloomberg Law. “We have thousands of associates who take leaves of absence and perform their jobs with reasonable accommodation. Walmart has processes in place to comply with the ADA and FMLA, and we will continue to defend the company on those remaining claims.”

Judges A. Wallace Tashima, Morgan Christen, and Joseph F. Bataillon, sitting by designation from the District of Nebraska, joined the opinion.

Kemp & Kemp represents Hazelett. Littler Mendelson PC represents Walmart.

The case is Hazelett v. Wal-Mart Stores, Inc., 9th Cir., No. 19-16628, unpublished 10/6/20.

(Updates Oct. 6 story to include comment from Walmart in the 10th paragraph)

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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