1. The parties to this Settlement Agreement are the United States of America and the North Carolina Division of Motor Vehicles ("NCDMV").
2. Title I of the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. § 12111 et seq., is referred to as "Title I" or the "ADA."

The parties agree to the following:

3. Pursuant to North Carolina law, NCDMV must certify each school bus driver prior to each driver operating a school bus.
4. On March 29, 1993 and March 1, 1995, Mr. Joseph F. Callahan timely filed a charge and amended charge, respectively, (Charge Number 140931019) with the Equal Employment Opportunity Commission ("EEOC"), alleging in relevant part that NCDMV and the Catawba County School District ("CCSD") violated Title I when he was terminated from his position as a school bus driver with the CCSD.
5. In approximately 1983, Mr. Callahan was diagnosed as a non-insulin dependent Type II diabetic. At this time, Mr. Callahan's physician prescribed an oral medication for treatment.
6. Between August 10, 1988 and February 24, 1993, Mr. Callahan was employed by the CCSD as a school bus driver.
7. In late 1992, Mr. Callahan's diabetes was diagnosed by his physician as having elevated to a Type I insulin-dependent status. At that time, Mr. Callahan's physician began to prescribe insulin injections for treatment.
8. On February 22, 1993, Mr. Callahan timely complied with NCDMV requirements by submitting to an annual physical examination and providing a NCDMV standard medical form to be completed by his physician. Mr. Callahan's physician indicated on this form that Mr. Callahan's diabetic status had elevated to Type I insulin-dependent. After Mr. Callahan's physician completed and signed this form, Mr. Callahan submitted the same to the appropriate CCSD representative who, in turn, submitted the same to the appropriate NCDMV representative.
9. On February 24, 1993, a representative of the CCSD advised Mr. Callahan that the CCSD had been instructed by a representative of NCDMV that, based upon the information provided by Mr. Callahan's physician on the February 22, 1993 form regarding Mr. Callahan's elevated diabetic status, he was immediately prohibited by NCDMV regulations from continuing to operate a school bus.
10. NCDMV promulgated and enforces 19A NCAC § 3G.0205(2), which provides in relevant part that individuals who use insulin to control a diabetic condition are not qualified to operate a school bus.
11. On August 1, 1996, the EEOC issued a finding of discrimination stating that Title I had been violated as charged by Mr. Callahan.
12. After conciliation failed on January 31, 1997, the EEOC, as authorized by section 107(a) of Title I, 42 U.S.C. § 12117(a), referred Mr. Callahan's charge to the United States Department of Justice with a recommendation that a civil action be filed under Title I.
13. This recommendation was based, in part, on a review of the rules promulgated and enforced by NCDMV wherein individuals who use insulin to control diabetes are automatically excluded from consideration for school bus driver positions, including: (1) failing to consider whether any reasonable accommodation(s) are available to allow a particular insulin-dependent diabetic to perform the essential functions of a school bus driver; and (2) failing to make an individualized assessment to determine if a particular insulin-using diabetic operating a school bus would in fact pose a direct threat to the health and safety of him/herself or others with no reasonable accommodation available to mitigate the risk.
14. The United States and NCDMV have determined that their respective interests can be met by resolving this matter and voluntarily entering into this Settlement Agreement. The Attorney General is authorized, by section 107(a) of Title I, 42 U.S.C. § 12117(a), to institute a civil action against a state or local government employer when the EEOC has determined that there is reasonable cause to believe that a charge of employment discrimination is true, and the EEOC has been unable to obtain a conciliation agreement. These preconditions exist as to EEOC Charge Number 140931019. In consideration of the above, the Attorney General shall not institute any civil action alleging employment discrimination by NCDMV on the basis of EEOC Charge Number 140931019 filed by Mr. Callahan.

15. Pursuant to the North Carolina Administrative Procedure Act, NC ST § 150B-1 et seq., NCDMV shall promulgate temporary rules and shall propose, recommend and endorse permanent rules with respect to the medical requirements for school bus drivers. These rules shall amend the requirements currently set forth in 19A NCAC § 3G.0205(2). These new requirements shall address the following concerns which have arisen based upon the language in the current rules:

1. Failure to certify individuals for the position of school bus driver no longer shall be based upon an automatic or categorical exclusion of an individual on the basis of a medical condition.
2. Medical concerns arising during the course of an individual's application for certification or recertification to be a school bus driver shall be addressed through the creation of appropriate individualized assessment protocols which consider the opinions of knowledgeable experts and physicians. These protocols shall be job-related and consistent with business necessity as required by the ADA and its implementing regulations.

16. With respect to diabetes-related concerns, this protocol may include an assessment of and a requirement that the candidate for certification be free, within a determined period of time, from hypoglycemic reactions resulting in a loss of consciousness or seizure, or impaired cognitive function which occurred without warning symptoms.
17. This diabetes-related protocol also may include an assessment of and a requirement that the candidate for certification be able to and has demonstrated the willingness to monitor and manage his/her diabetes and is not likely to suffer any diminution in or interference with his/her current driving ability due to his/her diabetes.
18. Based upon the individualized assessment conducted of an individual with diabetes, school bus drivers may be required to do the following as a term or condition of driving a school bus: (1) carry a source of rapidly absorbable glucose at all times while driving; (2) self-monitor blood glucose periodically while driving, or while on duty prior to driving, by using a portable monitoring device; (3) maintain blood glucose logs and to submit those logs as required; and (4) periodically provide a statement or certification from an endocrinologist reflecting the driver's fitness to operate a school bus.
19. With respect to diabetes-related concerns, the United States shall be given the opportunity to review and submit suggestions for revisions with respect to temporary rules promulgated pursuant to NC ST § 150B-21.1(a)(4) and permanent rules proposed to be adopted pursuant to NC ST § 150B-21.2. In this regard, NCDMV shall provide the undersigned counsel for the United States with any such draft temporary rules and proposed new rules immediately upon completion of the same. The parties ultimately shall agree on the final language included within the temporary rules and to be proposed as permanent.
20. Where applicable, NCDMV shall revise the literature it produces and disseminates to reflect the matters addressed in this Settlement Agreement as well as the principles of the ADA (including the concepts of individualized assessment and reasonable accommodation). Revisions shall include, but are not limited to, the language contained in pages 1 and 2 of "Handbook for School Bus Drivers."
21. Upon the execution of this Settlement Agreement, NCDMV shall advise its agents, representatives and all local school districts in the state as to the matters addressed in this Settlement Agreement, and shall take immediate steps and best efforts to ensure that its agents, representatives and school districts do not impose on school bus drivers who are employed by those districts any medical term(s) or condition(s) of new hires or incumbents that do not provide for an individualized assessment and are not consistent with the matters addressed in this Settlement Agreement and the requirements of the ADA.

22. Within ten days of when both parties have executed this Settlement Agreement, NCDMV shall pay a monetary amount of $9,000.00 to Mr. Callahan in settlement of his charge. This payment shall be made in the form of a check to Mr. Callahan, sent to him via certified mail, return receipt requested, at his home address: Post Office Box 397, Terrell, North Carolina 38682.
23. Mr. Callahan does not seek job reinstatement and, accordingly, none has been requested by the United States on his behalf.
24. NCDMV shall notify the undersigned counsel for the United States when it has completed the actions described in paragraph 22, above. NCDMV shall send to the undersigned counsel for the United States a copy of the check and any accompanying correspondence.

25. The United States may review compliance with this Settlement Agreement at any time. The United States may institute a civil action in the appropriate United States District Court to enforce the applicable provisions of the ADA or this Settlement Agreement, or both, if the United States determines that this Settlement Agreement or any requirement thereof has been violated. Furthermore, the United States may institute a civil action to enforce the ADA if it determines that any rule(s) that ultimately takes effect is in violation of the ADA. Prior to instituting a civil enforcement action, the United States shall raise its concern(s) with NCDMV and shall attempt to resolve those concerns in good faith. NCDMV shall be given thirty days to address those concerns prior to the institution of an action by the United States.
26. Failure by the United States to enforce this entire Settlement Agreement or any of its provisions shall not be construed as a waiver of its right to enforce other provisions of this Settlement Agreement.
27. An individual executing this document in a representative capacity for either party is authorized to bind that party to this Settlement Agreement.
28. The effective date of this Settlement Agreement shall be the date of the last signature below.

On behalf of the North Carolina Department of
Motor Vehicles:

By: _____________________________      Dated:__________
   Hal F. Askins
   Special Deputy Attorney General
   State of North Carolina
   Department of Justice
   Post Office Box 629
   Raleigh, North Carolina 27602-0629
   (919) 716-6650

For the United States of America:

Bill Lann Lee
Acting Assistant Attorney General

By: _____________________________      Dated:_________
   John L. Wodatch
   Alison J. Nichol
   Steven E. Butler
   Disability Rights Section
   Civil Rights Division
   United States Department of Justice
   Post Office Box 66738
   Washington, D.C. 20035-6738
   (202) 514-8887