IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 95-1590 LEONARD C. MCNEMAR, v. THE DISNEY STORES, INC. Leonard C. McNemar, Appellant. On Appeal from the United States District Court for the Eastern District of Pennsylvania BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF THE APPELLANT C. GREGORY STEWART General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel CAROLYN L. WHEELER Assistant General Counsel ROBERT J. GREGORY Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W., Room 7032 Washington, D.C. 20507 (202) 663-4059 01-06476 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ...................................ii STATEMENT OF INTEREST ..................................1 STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION ........................................... 2 STATEMENT OF THE ISSUE ................................. 2 Standard of Review ................................. 2 STATEMENT OF RELATED CASES ............................. 2 STATEMENT OF THE CASE .................................. 2 1. Nature of the Case .............................. 2 2. Course of Proceedings ........................... 3 3. Statement of Facts .............................. 3 4. District Court Decision ......................... 5 SUMMARY OF ARGUMENT .................................... 6 ARGUMENT ............................................... 7 THE DISTRICT COURT ERRED IN RULING THAT MCNEMAR WAS JUDICIALLY ESTOPPED FROM ESTABLISHING A PRIMA FACIE CASE ................................................... 7 A. McNemar Can Satisfy the Qualifications Element of the Prima Facie Case ......................... 8 B. The Doctrine of Judicial Estoppel Does Not Apply in this Case ................................... 15 CONCLUSION ............................................. 25 CERTIFICATE OF BAR MEMBERSHIP CERTIFICATE OF SERVICE 01-06477 TABLE OF AUTHORITIES CASES PAGE(S) Aetna Life Ins. Co. v. Wells, 557 S.W.2d 144 (Tex. Civ. App. 1977), writ of error refused, 566 S.W.2d 900 (Tex. 1978) ..................................... 23 Aucutt v. Six Flags Over Mid-America, Inc., 869 F. Supp. 736 (E.D. Mo. 1994) ........................... 9 Barth v. Gelb, 2 F.3d 1180 (D.C. Cir. 1993), cert. denied, 114 S. Ct. 1538 (1994) ...................... 9 Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509 (10th Cir. 1991) .......................... 19 City of Alma v. United States, 744 F. Supp. 1546 (S.D. Ga. 1990) ........................................... 17, 24 Colgan v. Fisher Scientific Co., 935 F.2d 1407 (3d Cir.) (en banc), cert. denied, 502 U.S. 941 (1991) .............................................. 2 Delgrosso v. Spang and Co., 903 F.2d 234 (3d Cir.), cert. denied, 498 U.S. 967 (1990) ................... 16, 24 DeLuca v. Winer Indus., Inc., 53 F.3d 793 (7th Cir. 1995) ............................................... 9, 10 DiPuccio v. United Parcel Serv., 890 F. Supp. 688 (N.D. Ohio 1995) .................................... 14 Doe v. Kohn Nast & Graf, P.C., 862 F. Supp. 1310 (E.D. Pa. 1994) ........................................... 9 Edwards v. Aetna Life Ins. Co., 690 F.2d 595 (6th Cir. 1982) ............................................... 23 Ennis v. National Ass'n of Business and Educ. Radio, Inc., 53 F.3d 55 (4th Cir. 1995) .................... 9, 10 Ezold v. Wolf, Block, Schorr and Solis-Cohen, 983 F.2d 509 (3d Cir. 1992), cert. denied, 114 S. Ct. 88 (1993) .............................................. 10 Fidelity & Deposit Co. of Maryland v. Hudson United Bank, 653 F.2d 766 (3d Cir. 1981) ................... 15 Fleck v. KDI Sylvan Pools, Inc., 981 F.2d 107 (3d Cir. 1992), cert. denied, 113 S. Ct. 1645 (1993) ......... 7, 16 20 ii 01-06478 TABLE OF AUTHORITIES (cont'd) CASES (cont'd) PAGE(S) Gleason v. United States, 458 F.2d 171 (3d Cir. 1972) .............................................. 16 Jalil v. Avdel Corp., 873 F.2d 701 (3d Cir. 1989), cert. denied, 493 U.S. 1023 (1990) ................. 10 Joleewu, Ltd. v. City of Austin, 916 F.2d 250 (5th Cir. 1990), cert. denied, 500 U.S. 904 (1991) ...... 23 Kennedy v. Applause, Inc., No. 94-5344 SVW, 1994 WL 740765 (C.D. Cal. Dec. 6, 1994) .................... 22 King v. Trans World Airlines, Inc., 738 F.2d 255 (8th Cir. 1984) .................................... 12 Linan-Faye Constr. Co. v. Housing Auth. of Camden, 49 F.3d 915 (3d Cir. 1995) ............................ 20 Mardell v. Harleysville Life Ins. Co., 31 F.3d 1221 (3d Cir. 1994), vacated, 115 S. Ct. 1397 (1995), modified, 65 F.3d 1072 (3d Cir. 1995) .............. 12, 13 14, 17 18 Matter of Morristown & Erie R.R. Co., 677 F.2d 360 (3d Cir. 1982) ..................................... 7, 16 17 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) ............................................. 6, 8 9 McKennon v. Nashville Banner Pub. Co., 115 S. Ct. 879 (1995) ............................................. 6, 7 13, 14 15, 17 18, 19 McNemar v. The Disney Stores, Inc., 4 AD Cases 897 (E.D. Pa. 1995) .................................... 3, 4 5, 11 16, 23 24, 25 Newman v. GHS Osteopathic, Inc., 60 F.3d 153 (3d Cir. 1995) .............................................. 8, 9 14 iii 01-06479 TABLE OF AUTHORITIES (cont'd) CASES (cont'd) PAGE(S) Ostroff v. Employment Exchange, Inc., 683 F.2d 302 (9th Cir. 1982) ..................................... 12 Overton v. Reilly, 977 F.2d 1190 (7th Cir. 1992) ............ 21 Paschke v. Retool Indus., 519 N.W.2d 441 (Mich. 1994) ............................................... 22 Resorts Int'l, Inc. v. Greater Bay Hotel and Casino, Inc., 830 F. Supp. 826 (D.N.J. 1992) ................ 16 Scarano v. Central R.R. Co., 203 F.2d 510 (3d Cir. 1953) ............................................... 16, 23 Sempier v. Johnson & Higgins, 45 F.3d 724 (3d Cir. 1995) ............................................... 10, 11 Shell Oil Co. v. Trailer & Truck Repair Co., 828 F.2d 205 (3d Cir. 1987) .................................. 22 Shipley v. Dugan, 874 F. Supp. 933 (S.D. Ind. 1995) ......... 12 Siegel v. Alpha Wire Corp., 894 F.2d 50 (3d Cir.), cert. denied, 496 U.S. 906 (1990) ................... 10 Smith v. Dovenmuehle Mortgage, Inc., 859 F. Supp. 1138 (N.D. Ill. 1994) .................................... 21, 22 Smith v. Travelers Ins. Co., 438 F.2d 373 (6th Cir.), cert. denied, 404 U.S. 832 (1971) ................... 22, 23 Teledyne Indus., Inc. v. NLRB, 911 F.2d 1214 (6th Cir. 1990) ............................................... 7, 19 20 Townsend v. Dollar General Store, 864 P.2d 1303 (Okla. Ct. App. 1993) ...................................... 23 United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d 469 (D.C. Cir.), cert. denied, 113 S. Ct. 3039 (1993) .................................. 19 Weldon v. Kraft, Inc., 896 F.2d 793 (3d Cir. 1990) .......... 10 White v. York Int'l Corp., 45 F.3d 357 (10th Cir. 1995) ............................................... 9 iv 01-06480 TABLE OF AUTHORITIES (cont'd) STATUTES AND RULES PAGE(S) 42 U.S.C. S 12101(a)(4) ..................................... 19 42 U.S.C. S 12101(b)(1) ..................................... 19 42 U.S.C. S 12112(a) ........................................ 12 42 U.S.C. S 12117(a) ........................................ 19 29 C.F.R. S 1630.2(o)(2) .................................... 21 OTHER AUTHORITIES Interpretive Guidance on Title I of the Americans With Disabilities Act, Appendix to 29 C.F.R. Part 1630, Section 1630.2(m) ................................... 13 D. DOBBS, HANDBOOK ON THE LAW OF REMEDIES S 2.4 (1993) .............................................. 17 18 C. WRIGHT, A. MILLER, & E. COOPER, FEDERAL PRACTICE AND PROCEDURE S 4477 (1981) ......................... 17, 24 25 v 01-06481 IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 95-1590 LEONARD C. MCNEMAR, Plaintiff-Appellant, v. THE DISNEY STORES, INC., Defendant-Appellee. On Appeal from the United States District Court for the Eastern District of Pennsylvania BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF THE APPELLANT STATEMENT OF INTEREST The Equal Employment Opportunity Commission ("Commission") is the agency charged with the administration and enforcement of Title I of the Americans with Disabilities Act, 42 U.S.C. S 12101, et seq. ("ADA"), and other federal anti-discrimination statutes. This appeal raises important issues concerning the effective enforcement of the ADA in cases in which an individual applies for disability benefits following his discharge and then asserts a claim of unlawful discharge under the ADA. The district court ruled that the individual in such a case is judicially estopped from establishing the qualifications element of his prima facie case 01-06482 and, thus, has no legal recourse under the ADA even though he may have been terminated because of his disability in violation of the ADA. Because the ruling of the district court, if allowed to stand, would substantially undermine the deterrent purposes of the ADA, the Commission offers its views to the Court. STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION The Commission defers to the jurisdictional statements of the parties. STATEMENT OF THE ISSUE Whether the district court erred in ruling that the plaintiff's representation, in a post-termination benefits application, that he was "totally and permanently disabled" provided an absolute defense to the plaintiff's claim of unlawful discharge under the ADA. Standard of Review The district court ruled on the plaintiff's ADA claim in granting the defendant's motion for summary judgment. This Court exercises plenary review over a district court's grant of summary judgment. See Colgan v. Fisher Scientific Co., 935 F.2d 1407, 1413 (3d Cir.) (en banc), cert. denied, 502 U.S. 941 (1991). STATEMENT OF RELATED CASES The Commission is unaware of any related cases. STATEMENT OF THE CASE 1. Nature of the Case This case involves a suit filed by Leonard McNemar against his former employer, The Disney Stores, Inc. ("Disney"). McNemar 2 01-06483 claims, in part, that he was discharged because of his disability (AIDS) in violation of the ADA. Disney asserts that McNemar, who managed one of Disney's retail stores, was terminated for improperly removing money ($2.00) from the store's cash register. Disney makes no claim that it terminated McNemar because of any deficiency related to McNemar's disability. 2. Course of Proceedings McNemar commenced this action in November 1994, alleging a number of claims under state and federal law, including the ADA.1 Disney moved for summary judgment on all claims. By order dated June 29, 1995, the district court granted Disney's motion. See McNemar v. The Disney Stores, Inc., 4 AD Cases 897, 899 (E.D. Pa. 1995). 3. Statement of Facts McNemar began working for Disney in 1989. 4 AD Cases 897. McNemar was eventually promoted to Assistant Store Manager at Disney's store in Cherry Hill, New Jersey. Id. McNemar received positive performance evaluations throughout his career at Disney. Id. In October 1993, McNemar was diagnosed with AIDS. Id. McNemar disclosed his condition to a small group of friends, including the manager of the Cherry Hill store. Id. After a brief hospitalization, McNemar returned to work in November 1993. Id. On November 8, 1993, McNemar was called into the office of ______________________ 1 The Commission's brief focuses solely on the district court's disposition of McNemar's ADA claim. 3 01-06484 Joelyn Ale, Disney's District Manager. Id. Ale informed McNemar that she had heard rumors that he had AIDS and inquired whether the rumors were true. Id. at 897-98. McNemar denied that he had AIDS. Id. at 898. On November 18, 1993, Ale informed McNemar that he was being terminated. Id. Ale purported to base the termination on a report that McNemar had taken $2.00 from the store's cash register. Id. McNemar admitted that he had removed the money -- to purchase a pack of cigarettes -- but asserted that he had returned $2.00 of his own money to the store safe.2 Id. In late November 1993, a friend of McNemar, Julia Walsh, called the Cherry Hill store to speak with McNemar. The store's assistant manager informed Walsh that McNemar had "resigned" because he had AIDS. Id. Following his termination, McNemar filed for disability benefits with the Social Security Administration and the New Jersey Department of Labor. Id. A state caseworker advised McNemar that due to the nature of his disability, he was eligible to receive federal and state disability benefits regardless of his ability to work. Id. In filling out the application form, McNemar certified that he was "totally and permanently disabled."3 Id. at 899. _________________________ 2 While Disney claims to have acted pursuant to its loss prevention policy, there is evidence that this policy was not consistently applied and that employees routinely engaged in the type of conduct involved in this case without retribution. See Plaintiff's Response to Defendant's Motion for Summary Judgment at 41-45. 3 McNemar's physician made similar representations as to McNemar's condition on a student loan exemption form filed in July 1994. 4 AD Cases at 899 & n.5. 4 01-06485 McNemar began receiving benefits in December 1993. See Brief of Appellant at 15. McNemar subsequently filed suit under the ADA, challenging his termination. Disney moved for summary judgment, arguing that McNemar was estopped from establishing a prima facie case of discrimination because he had applied for disability benefits, following his discharge, and represented that he was "totally and permanently disabled." Disney also argued that it had a legitimate reason for discharging McNemar that could not be shown to be a pretext for discrimination. 4. District Court Decision In granting summary judgment, the district court ruled that McNemar failed to establish a prima facie case of discrimination. The court stated that the "ADA requires as a condition of recovery that the plaintiff is a 'qualified individual who, with or without reasonable accommodation, can perform the essential functions of the job.'" 4 AD Cases at 899. The court ruled that the plaintiff could not make out a prima facie case because he had "admitted that he [was] not qualified to perform the job" on his application for disability benefits. Id. The court concluded that "an employee who represents on a benefits application that he is disabled is judicially estopped from arguing that he is qualified to perform the duties of the position involved."4 Id. ___________________________ 4 The court did not address Disney's alternative argument that McNemar's claim failed at the pretext stage. 5 01-06486 SUMMARY OF ARGUMENT The district court erred in holding that McNemar could not make out a prima facie case. The issue in this case is whether McNemar was discharged because of his AIDS condition or because of the legitimate explanation advanced by the defendant, one that has nothing to do with McNemar's disability. The type of ADA discharge claim at issue in this case is governed by the standard set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). McNemar can make out a prima facie case under that standard because he can show, based on his job performance, that he had the minimal qualifications necessary to perform the job. That McNemar may have certified that he was totally disabled, in a subsequent application for disability benefits, has no bearing on the prima facie issue of qualifications nor on the lawfulness of Disney's motivation at the time of the adverse employment decision. The Supreme Court has held that after-acquired evidence of disqualifying conduct on the plaintiff's part, while relevant to the plaintiff's entitlement to make whole relief, does not provide an absolute bar to a discrimination suit. McKennon v. Nashville Banner Pub. Co., 115 S. Ct. 879, 884-86 (1995). That same principle should apply here. Further, while the district court ruled that McNemar was "judicially estopped" from maintaining an ADA claim, the doctrine of judicial estoppel does not apply under the facts of this case. First, judicial estoppel is not applied where the plaintiff's suit "implicates not only the relevant interests of the litigating parties, but also the public's interest in promoting the policies 6 01-06487 underlying the statute." Matter of Morristown & Erie R.R. Co., 677 F.2d 360, 368 n.10 (3d Cir. 1982). The Supreme Court has ruled that the broader public policies of the anti-discrimination statutes are furthered "when even a single employee establishes that an employer has discriminated against him or her." McKennon v. Nashville Banner Pub. Co., 115 S. Ct. at 885. Second, judicial estoppel does not apply unless a party takes a position that is "'inconsistent'" with one"'successfully and unequivocally asserted by the same party'" in a prior judicial proceeding. Teledyne Indus., Inc. v. NLRB, 911 F.2d 1214, 1217-20 (6th Cir. 1990) (cited in Fleck v. KDI Sylvan Pools, Inc., 981 F.2d 107, 121 (3d Cir. 1992), cert. denied, 113 S. Ct. 1645 (1993)). In this case, there is no inconsistency between McNemar's position in this case and his receipt of post-termination disability benefits. McNemar, moreover, never took a position in a prior judicial proceeding -- he simply provided information on a disability application -- nor did he succeed in obtaining disability benefits because of any representation concerning the work-related implications of his disability. The evidence shows that McNemar had a "presumed disability" that entitled him to benefits regardless of his ability to work. ARGUMENT THE DISTRICT COURT ERRED IN RULING THAT MCNEMAR WAS JUDICIALLY ESTOPPED FROM ESTABLISHING A PRIMA FACIE CASE. The district court dismissed McNemar's claim solely on the basis of McNemar's post-termination application for disability benefits. We are troubled that the court failed to reach the 7 01-06488 merits of McNemar's claim and adopted an estoppel rule that, if broadly applied, would substantially undermine the effective enforcement of the ADA. We believe that the district court erred in dismissing McNemar's claim at the prima facie stage and in applying the doctrine of judicial estoppel to bar his ADA claim. A. McNemar Can Satisfy the Qualifications Element of the Prima Facie Case The threshold issue in this case is whether McNemar can satisfy the qualifications element of the prima facie case. The district court held that McNemar could not meet the qualifications element because of the "admissions" made in his benefit application. In so holding, the court misapplied the prima facie standard and improperly resorted to an event that occurred after the employment decision at issue in dismissing McNemar's claim. This case involves a claim of intentional discrimination in the decision to discharge McNemar. McNemar is not claiming that Disney discriminated by failing to provide him with a reasonable accommodation, nor does Disney argue that it discharged McNemar because of any disability-related condition. This is not a case, in other words, in which the effect of a disability on an individual's ability to do his job is at issue. As in the typical case of intentional discrimination, the sole issue is one of motivation: did Disney act out of a discriminatory animus in terminating McNemar because of his AIDS condition. Courts have recognized that the type of ADA claim at issue in this case is governed by the McDonnell Douglas standard of proof. See, e.g., Newman v. GHS Osteopathic, Inc., 60 F.3d 153, 157 (3d 8 01-06489 Cir. 1995); DeLuca v. Winer Indus., Inc., 53 F.3d 793, 797 (7th Cir. 1995); Ennis v. National Ass'n of Business and Educ. Radio, Inc., 53 F.3d 55, 57-58 (4th Cir. 1995). In Newman, this Court ruled that Title VII's "burden-shifting rules" should apply to "pretext" cases under the ADA given the "parallel nature of the statutes" and the similarity of the claims. 60 F.3d at 157. Where the employer "readily acknowledges that the decision to terminate the employee was premised, at least in part, on the employee's disability, " the McDonnell Douglas standard may be of little assistance, since the focus shifts from the employer's motivation to the issue of accommodating the disability. White v. York Int'l Corp., 45 F. 3d 357, 361 n. 6 (10th Cir. 1995). Where, however, the employer asserts that it discharged the plaintiff "for reasons unrelated to the person's [disability]," the McDonnell Douglas standard plays the same role under the ADA as it does under Title VII: it "'sharpen[s] the inquiry' into an 'elusive' fact -- an employer's discriminatory motivation." Barth v. Gelb, 2 F. 3d 1180, 1185-86 (D.C. Cir. 1993), cert. denied, 114 S. Ct. 1538 (1994). In such a case, the elements of the McDonnell Douglas prima facie case apply. E.g., DeLuca v. Winer Indus., Inc., 53 F.3d at 797; Ennis v. National Ass'n of Business and Educ. Radio, Inc., 53 F.3d at 57- 58; Aucutt v. Six Flags Over Mid-America, Inc., 869 F. Supp. 736, 743 (E.D. Mo. 1994) (cited in Newman, 60 F. 3d at 157); Doe v. Kohn Nast & Graf, P.C., 862 F. Supp. 1310, 1318 & n.5 (E.D. Pa. 1994). Under McDonnell Douglas, in a discharge case, the plaintiff can satisfy the prima facie element of qualifications by showing 9 01-06490 that "his work performance met the employer's legitimate job expectations." DeLuca v. Winer Indus., Inc., 53 F.3d at 797 (citing this as the standard in an ADA discharge case); Ennis v. National Ass'n of Business and Educ. Radio, Inc., 53 F.3d at 58 (citing to same standard in ADA discharge case). As this Court has made clear, that standard requires nothing more than a showing that the plaintiff performed the job in a satisfactory fashion during the period leading up to the discharge, as evidenced (for example) by the receipt of satisfactory performance appraisals. See Sempier v. Johnson & Higgins, 45 F.3d 724, 729 (3d Cir. 1995); Ezold v. Wolf, Block, Schorr and Solis-Cohen, 983 F.2d 509, 523 (3d Cir. 1992), cert. denied, 114 S. Ct. 88 (1993); Siegel v. Alpha Wire Corp., 894 F.2d 50, 52-54 (3d Cir.), cert. denied, 496 U.S. 906 (1990); Jalil v. Avdel Corp., 873 F.2d 701, 707 (3d Cir. 1989), cert. denied, 493 U.S. 1023 (1990). The plaintiff can meet the qualifications element even if the employer contends that it discharged the plaintiff because of "insubordination," "poor performance," or "misconduct." Jalil, 873 F.2d at 707. Such issues are properly considered, not at the prima facie threshold, but at the pretext stage of the analysis. Id.; see also Weldon v. Kraft, Inc., 896 F.2d 793, 799 (3d Cir. 1990) (plaintiff need only show that he has the "background qualifications" for the job; other performance-based issues are considered at the pretext stage). In this case, McNemar's proof is sufficient to satisfy the qualifications element of the McDonnell Douglas prima facie case. There is evidence that McNemar had worked at Disney for over four 10 01-06491 years, while consistently receiving favorable performance appraisals. 4 AD Cases at 897. McNemar, moreover, had been twice promoted during his tenure at Disney. Id. While Disney claims that McNemar was fired because of his removal of $2.00 from the store cash register, this concern is properly deferred to the pretext stage. McNemar can readily show that he "had the objective experience and [skill] necessary to qualify as a viable candidate for the position [ ] he held." SEmpier v. Johnson & Higgins, 45 F.3d at 729. In ruling on the qualifications issue, the district court ignored the evidence of McNemar's satisfactory performance on the job. Instead, the court focused solely on McNemar's post- termination representation -- on a disability application -- that he was "totally and permanently disabled." As noted above, however, this is not a case in which there is any question as to whether McNemar's disability precluded him from performing the essential functions of the job. Disney, in fact, disclaims any reliance on McNemar's disability as the basis for the discharge decision. The only issue of qualifications is one of satisfactory performance on the job. The degree to which McNemar's disability may have impacted his ability to work -- the focus of the statement on his disability application -- is simply irrelevant to the qualifications question at issue. In a number of cases, courts have recognized that when an employer rejects an individual for reasons that have nothing to do with the individual's qualifications, "those qualifications are 11 01-06492 irrelevant to whether the [individual] has raised a prima facie case of disparate treatment." Ostroff v. Employment Exchange, Inc., 683 F.2d 302, 304 (9th Cir. 1982); accord King v. Trans World Airlines, Inc., 738 F.2d 255, 257 (8th Cir. 1984); Shipley v. Dugan, 874 F. Supp. 933, 942 (S.D. Ind. 1995). The rationale for this principle is elemental: a plaintiff's claim cannot be defeated by a factor that did not actually motivate the employer, "at the time," in making the adverse employment decision. Mardell v. Harleysville Life Ins. Co., 31 F.3d 1221, 1228 (3d Cir. 1994), vacated, 115 S. Ct. 1397 (1995), modified, 65 F.3d 1072 (3d Cir. 1995) (reaffirming the original decision in all relevant respects). A plaintiff's claim cannot be defeated by an issue of qualifications that has nothing to do with the employer's motivation for the adverse action.5 Indeed, even in cases in which the employer purports to reject the plaintiff because of job performance deficiencies attributable to the plaintiff's disability, the type of post-termination statements involved in this case should not be determinative of the qualifications issue. The Commission has made clear that "[t]he determination of whether an individual with a disability is ____________________ 5 It is true, of course, that the protections of the ADA extend only to "qualified individual[s] with a disability." See 42 U.S.C. S 12112(a). Thus, in that sense, qualifications looms as an issue in every ADA action. But qualifications can mean different things in different contexts. Here, McNemar can show that he is a "qualified individual" based on his satisfactory performance on the job, which demonstrates his "qualifications" for the position. McNemar's post-termination representation that he was "totally and permanently disabled" is simply not relevant to the qualifications question at issue. 12 01-06493 qualified is to be made at the time of the employment decision." Interpretive Guidance on Title I of the Americans with Disabilities Act, Appendix to 29 C.F.R. Part 1630, Section 1630.2(m). The Commission has stressed that the focus is on "the capabilities of the individual with a disability at the time of the employment decision," not on post-decisional factors that might call into question the individual's ability to perform the job. Id. This view is consistent with the principle, noted above, that a plaintiff's claim cannot be defeated by evidence that was "non- existent at the time of the adverse decision." Mardell v. Harleysville Life Ins. Co., 31 F.3d at 1228. An employer that rejects an individual because of his disability may very well violate the ADA, even if it turns out, after-the-fact, that the individual's disabling condition renders him unable to do the job. In this regard, the issue in this area of the law is strikingly similar to the issue raised by the case law involving employer reliance on after-acquired evidence. In McKennon v. Nashville Pub. Co., 115 S. Ct. 879, the Supreme Court held that after-acquired evidence of the plaintiff's disqualifying conduct does not provide an absolute bar to a discrimination suit. The Court ruled that after-acquired evidence cannot defeat a plaintiff's claim at the liability stage because the "employer could not have been motivated by knowledge it did not have and it cannot now claim that the employee was fired for the nondiscriminatory reason." Id. at 885. The Court stressed that an "absolute rule barring any recovery" would "undermine the 13 01-06494 [statutory] objective of forcing employers to consider and examine their motivations, and of penalizing them for employment decisions that spring from [unlawful] discrimination." Id. at 886. While McKennon involved a claim under the ADEA, the Court linked its analysis to the "wider statutory scheme to protect employees in the workplace nationwide," citing specifically to the ADA. Id. at 884. See also Newman v. GHS Osteopathic, Inc., 60 F.3d at 157 (noting that "the ADA, ADEA, and Title VII all serve the same purpose -- to prohibit discrimination in employment against members of certain classes"); DiPuccio v. United Parcel Serv., 890 F. Supp. 688, 693 (N.D. Ohio 1995) (applying McKennon to a disability claim). Under the McKennon rationale, evidence of McNemar's post-termination conduct -- in applying for disability benefits -- is irrelevant to Disney's liability for McNemar's discharge.6 Of course, to say that a plaintiff's claim is not foreclosed by the type of post-termination conduct at issue in this case is not to say that such conduct is irrelevant for all purposes. In this case, for example, McNemar's representations might limit his entitlement to full make whole relief if the evidence confirms that he was truly unable to work at the time of his application for _________________________ 6 By relying on the McKennon decision, we do not mean to imply that McNemar has engaged in any "wrongdoing" or "misconduct," as had the plaintiff in McKennon. See 115 S. Ct. at 883. Indeed, the defining principle in McKennon is that employer liability is determined solely by information available to the employer "'at the time of the decision.'" Id. at 885; accord Mardell v. Harleysville Life Ins. Co., 31 F.3d at 1228 (after-acquired evidence not relevant to employer liability because liability determination turns on employer's motivation "at the instant of the adverse employment action"). That principle applies regardless of whether the plaintiff's disqualifying conduct involves "wrongdoing." 14 01-06495 disability benefits. Cf. McKennon, 115 S. Ct. at 886-87 (the accumulation of back pay may be cut off by the discovery of "after- acquired evidence of wrongdoing" where the employer can prove that it would have terminated the employee had it been aware of the wrongdoing at the time). In cases in which the employer concedes that it rejected the plaintiff because of his disability and the dispute is over whether the disability precluded employment, the fact that the plaintiff has "admitted" to a "total and permanent disability" might be admissible at trial -- as evidence bearing on the qualifications issue -- at least to the extent the representation refers back to the time of the adverse employment decision and presents a clear inconsistency with positions taken in the ADA action. Cf. Fidelity & Deposit Co. of Maryland v. Hudson United Bank, 653 F.2d 766, 777 (3d Cir. 1981) (party's inconsistent on-the-record statement in a prior proceeding, although "not conclusive" in the present proceeding, was "admissible as evidence against [the party] to be weighed with all the other evidence by the trier of fact"). In no event, however, should post-termination evidence provide an absolute bar to the ability of a plaintiff to maintain an ADA suit. The district court erred in dismissing McNemar's claim on the basis of an issue of qualifications that has no relevance to Disney's liability for the discharge decision at issue. B. The Doctrine of Judicial Estoppel Does Not Apply in this Case While the district court based its decision on an improper assessment of the qualifications issue, the court also invoked the 15 01-06496 doctrine of judicial estoppel in ruling that McNemar was barred from establishing a prima facie case. Specifically, the court ruled that McNemar was "judicially estopped" from establishing his "qualifications" for the job, due to the statements made on his disability application. See 4 AD Cases at 899. This Court has, on occasion, applied judicial estoppel to bar a plaintiff's suit, particularly in cases in which the plaintiff has played "fast and loose with the courts" by taking inconsistent positions in judicial proceedings in order to gain an unfair benefit over an adversary. See, e.g., Fleck v. KDI Sylvan Pools, Inc., 981 F.2d at 121; Delgrosso v. Spang and Co., 903 F.2d 234, 241-42 (3d Cir.), cert. denied, 498 U.S. 967 (1990); Scarano v. Central R.R. Co., 203 F.2d 510, 512-13 (3d Cir. 1953). This Court has stressed that the doctrine is discretionary in nature and is typically applied where necessary "to secure substantial equity." Gleason v. United States, 458 F.2d 171, 175 (3d Cir. 1972); accord Resorts Int'l. Inc. v. Greater Bay Hotel and Casino, Inc., 830 F. Supp. 826, 830 (D.N.J. 1992). In this case, there are compelling grounds for rejecting application of the doctrine. The principal reason judicial estoppel should not apply in this case is that McNemar's claim implicates a broader public interest. This Court has declined to apply the doctrine of judicial estoppel where barring the plaintiff's suit "implicates not only the relevant interests of the litigating parties, but also the public's interest in promoting the policies underlying the statute." Matter of Morristown & Erie R.R. Co., 677 F.2d at 368 16 01-06497 n.10. It is well established "that broad interests of public policy may make it important to allow a change of positions that might seem inappropriate as a matter of merely private interests." 18 C. WRIGHT, A. MILLER, & E. COOPER, FEDERAL PRACTICE AND PROCEDURE S 4477 at 784 (1981). Courts are "'very reluctant'" to apply judicial estoppel when the plaintiff's suit touches upon the public enforcement goals of a federal statute. City of Alma v. United States, 744 F. Supp. 1546, 1556 (S.D. Ga. 1990); cf. McKennon v. Nashville Banner Pub. Co., 115 S. Ct. at 885 (noting that the Supreme Court has "rejected the unclean hands defense 'where a private suit serves important public purposes'"); D. DOBBS, HANDBOOK ON THE LAW OF REMEDIES S 2.4 at 98-99 (1993) (urging that the unclean hands defense should not limit the rights of "[s]ome plaintiffs, such as civil rights plaintiffs, [who] sue for themselves but in so doing also vindicate public policy"). In Mardell v. Harleysville Life Ins. Co., 31 F.3d at 1234, this Court, in rejecting the after-acquired evidence defense, specifically ruled that individuals act in a "quasi-public" role in bringing private suits to enforce the federal "anti-employment discrimination laws." Noting that "an act of employment discrimination is much more than an ordinary font of tort law," the Court emphasized that Congress passed the anti-discrimination laws "not merely to recompense the individuals so harmed but principally to deter future violations." Id. The Court stated that private lawsuits play a critical role in furthering the "strong deterrence policy" of the anti-discrimination statutes "by 17 01-06498 exposing and stigmatizing the wrongdoer's acts before the entire community." Id. at 1235. As the Court explained: The anti-employment discrimination laws Congress enacted consequently resonate with a forceful public policy vilifying discrimination. A plaintiff in an employment-discrimination case accordingly acts not only to vindicate his or her personal interests in being made whole, but also as a 'private attorney general' to enforce the paramount public interest in eradicating invidious discrimination. Id. at 1234. In McKennon v. Nashville Banner Pub. Co., 115 S. Ct. 879, the Supreme Court largely endorsed the Mardell rationale. See Mardell, 65 F.3d 1072, 1073 (stating that with the exception of "the calculation of back pay," McKennon is "entirely consistent" with the panel's previous decision; reaffirming and reinstating the previous decision in all other respects). The Court, in McKennon, stressed that the anti-discrimination statutes share "a common purpose: 'the elimination of discrimination in the workplace.'" Id. at 884. The Court stated that "Congress designed the remedial measures in these statutes to serve as a 'spur or catalyst' to cause employers 'to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges' of discrimination." Id. Notably, the Court ruled that the broader "objectives of [the anti- discrimination statutes] are furthered when even a single employee establishes that an employer has discriminated against him or her." Id. at 885. This is so because "[t]he private litigant who seeks redress for his or her injuries vindicates both the deterrence and the compensation objectives [of the Act in question]." Id. at 884. 18 01-06499 As the Court explained: The disclosure through litigation of incidents or practices which violate national policies respecting nondiscrimination in the work force is itself important, for the occurrence of violations may disclose patterns of noncompliance resulting from a misappreciation of the Act's operation or entrenched resistance to its commands, either of which can be of industry-wide significance. Id. at 885. After McKennon, there can be no doubt that suits brought to enforce a federal anti-discrimination statute, even those involving the claim of a single private plaintiff, implicate broader public policy concerns. This is as true of suits under the ADA as it is of claims brought under Title VII or the ADEA. The ADA was passed because of a concern that individuals who have experienced discrimination on the basis of disability "have often had no legal recourse to redress such discrimination." 42 U.S.C. S 12101 (a) (4). The Act was designed "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." 42 U.S.C. S 12101(b)(1). Private suits play a critical role in the enforcement of the statute. See 42 U.S.C. S 12117 (a) (incorporating the enforcement procedures of Title VII). Whatever its currency elsewhere,7 judicial estoppel should not apply to claims that further the vital enforcement purposes of the _____________________ 7 At least two circuit courts have declined to recognize the doctrine of judicial estoppel. See United Mine Workers of America 1974 Pension v. Pittston Co., 984 F.2d 469, 477 (D.C. Cir.), cert. denied, 113 S. Ct. 3039 (1993); Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1520 n.10 (10th Cir. 1991). Other courts have warned that the doctrine is to be "applied with caution to avoid impugning on the truth-seeking function of the court." E.g., Teledyne Indus., Inc. v. NLRB, 911 F.2d at 1218. 19 01-06500 federal anti-discrimination statutes. These enforcement concerns are of particular significance given the recurring nature of the issue raised by this case. Individuals with potential ADA claims are frequently placed in the position of needing to apply for disability benefits following their discharge. If faced with the choice of either suing under the ADA or obtaining what may be subsistence benefits, many claimants will, quite understandably, opt for the benefits and forego suit. The rule adopted by the district court, if broadly applied, would undoubtedly lead to "underenforcement" of the ADA. Mardell, 31 F.3d at 1237. At the same time, it would provide a complete defense to the very employer that may have created the need for disability benefits in the first place by virtue of its unlawful act of discrimination. This is clearly a situation in which the doctrine of judicial estoppel must give way to the broader public interests at stake. Even assuming that the doctrine of judicial estoppel could otherwise apply to the type of federal claim advanced by McNemar, the doctrine simply does not apply under the facts of this case. Judicial estoppel forbids a party from taking a position that is "'inconsistent'" with one "'successfully and unequivocally asserted by the same party'" in a prior judicial proceeding. Teledyne Indus., Inc. v. NLRB, 911 F.2d at 1217-20 (cited in Fleck v. KDI Sylvan Pools, Inc., 981 F.2d at 121); see also Linan-Faye Constr. Co. v. Housing Auth. of Camden, 49 F.3d 915, 933 (3d Cir. 1995) (judicial estoppel applies when there is "inconsistency" between a 20 01-06501 party's current position and a position advanced in a prior legal proceeding). In this case, there is no "inconsistency" between the plaintiff's position in the present action and the plaintiff's receipt of post-termination disability benefits. As noted above, the only qualifications issue here is whether McNemar met Disney's legitimate expectations based on his satisfactory performance on the job. There is no issue concerning the effect of McNemar's disability on his ability to do his job. Nothing that McNemar said about the extent of his disability, in the post-discharge benefit application process, is inconsistent with a finding that McNemar met the qualifications element, as properly applied in a case of this nature. More generally, the inquiry under the ADA differs in fundamental ways from the inquiry applicable to the award of disability benefits. The ADA, for example, requires the employer to make reasonable accommodations based on an individualized assessment of the particular employee's needs. See 29 C.F.R. S 1630.2(o)(2). No such standard is applied in determining eligibility for disability benefits. An individual who is deemed unable to work, pursuant to the "generalized" inquiry applicable to the award of disability benefits, may well be able to perform the essential functions of the job at issue with the benefit of a reasonable accommodation. See Overton v. Reilly, 977 F.2d 1190, 1196 (7th Cir. 1992) (stating that an award of disability benefits is not inconsistent with a claim that "the disabled person is 'qualified' to [the] job" from which he was terminated); Smith v. 21 01-06502 Dovenmuehle Mortgage, Inc., 859 F. Supp. 1138, 1141-42 (N.D. Ill. 1994) (stating that the decision to award disability benefits "is not synonymous with a determination that plaintiff is not a 'qualified individual' under the ADA"); see also Paschke v. Retool Indus., 519 N.W.2d 441, 445-46 (Mich. 1994) (rejecting the view that the "plaintiff's receipt of unemployment benefits estops his total disability claim for the same period" since, given the different nature of the two statutes, a claim that one is "ready and able to work" is not "inherently inconsistent with a subsequent total disability claim for the same period").8 In addition, this is not a case in which McNemar took a position in a prior judicial proceeding, as is typically required to invoke judicial estoppel. See Shell Oil Co. v. Trailer & Truck Repair Co., 828 F.2d 205, 209-10 (3d Cir. 1987) (holding that judicial estoppel did not apply because the party had not made the inconsistent statement "to a court"); Smith v. Travelers Ins. Co., 438 F.2d 373, 377 (6th Cir.) (refusing to extend doctrine to _______________________ 8 Despite the obvious differences between disability benefit standards and the ADA, some district courts have relied upon representations in the benefit context to bar ADA claims, although in factual settings that are markedly different from the present case. See, e.g., Kennedy v. Applause, Inc., No. 94-5344 SVW, 1994 WL 740765 (C.D. Cal. Dec. 6, 1994) (plaintiff was barred from establishing qualifications element of the prima facie case where the very issue in dispute was whether the plaintiff's disability precluded her from performing the essential functions of the job and the plaintiff filled out a disability application, on the day she was terminated, attesting to her inability to work on that day). At least one district court has held, in a case that closely resembles this case, that a plaintiff is not judicially estopped from maintaining an ADA action. See Smith v. Dovenmuehle Mortgage, Inc., 859 F. Supp. at 1141-42. 22 01-06503 "inconsistencies between judicial and non-judicial statements"), cert. denied, 404 U.S. 832 (1971); Scarano v. Central R.R. Co., 203 F.2d at 513 (doctrine applies when the party contradicts himself in the "same court"); Aetna Life Ins. Co. v. Wells, 557 S.W.2d 144, 147 (Tex. Civ. App. 1977) (doctrine "finds its most frequent application in situations where the statement giving rise to the estoppel was made in prior judicial proceedings"), writ of error refused, 566 S.W.2d 900 (Tex. 1978). While the doctrine has been extended to statements made in "quasi-judicial" proceedings, see Joleewu, Ltd. v. City of Austin, 916 F.2d 250, 252-53 (5th Cir. 1990), cert. denied, 500 U.S. 904 (1991), McNemar merely certified information on a disability form; there was no hearing of a quasi- judicial or adversary nature. McNemar's statements never reached the level of judicial or quasi-judicial formality necessary to implicate estoppel principles. See, e.g., Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599-600 (6th Cir. 1982) (plaintiff's prior inconsistent statement on benefit application did not bar subsequent judicial action where prior statement was not made before a "judicial body"); Townsend v. Dollar General Store, 864 P.2d 1303, 1308-09 (Okla. Ct. App. 1993) (plaintiff's representation on unemployment benefit application -- that he was able to work -- did not bar him from taking inconsistent position in subsequent judicial action). Finally, this is also not a case in which McNemar succeeded in obtaining the disability benefit as a result of the allegedly inconsistent statement. McNemar has a presumed disability. See 4 23 01-06504 AD Cases at 900. McNemar was told, at the time he applied for disability benefits, that he "was eligible to receive Social Security and state disability benefits despite the fact that he was able to work." Id. at 898. There is evidence that McNemar was awarded benefits even though the disability authorities knew that he had the capacity to work; McNemar, in fact, acknowledged in the application process that he was still able to perform his "regular work." See Brief of Appellant at 14-15 (citing to record evidence). McNemar did not unfairly benefit from any previous, inconsistent statement concerning his ability to work.9 See Delgrosso v. Spang and Co., 903 F.2d at 241-42 (doctrine of judicial estoppel is typically applied when the party "benefited from its original position") ; City of Alma v. United States, 744 F. Supp. at 1555 (doctrine is not applied "if no tribunal has been led astray"). The doctrine of judicial estoppel is a "principle of fairness" designed to preserve the integrity of the judicial process. 18 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE S ________________________ 9 The district court stated that McNemar's "'presumptive disability' status" served only to eliminate the requirement that McNemar "offer evidence" that he was unable to perform his previous job. 4 AD Cases at 900. The evidence shows, however, that the disability authorities were well aware of McNemar's capacity to work and awarded benefits precisely because of the classification of McNemar's disability. See Brief of Appellant at 14-15. The court also pointed to the fact that McNemar's physician had certified that McNemar suffered from a "total and permanent disability" in support of McNemar's application, in July 1994, for an exemption from repayment of his student loan. 4 AD Cases at 899. Again, however, there is evidence that the physician made this certification pursuant to the common understanding that individuals with AIDS are presumed to be permanently disabled. See Appellant's Brief at 33-34. 24 01-06505 4477 at 779-84. The integrity of the judicial process is not threatened in this case. There are compelling reasons Disney should not be permitted to shield its allegedly unlawful behavior from full judicial scrutiny. There is no countervailing concern that would justify an absolute bar to the suit.10 The district court erred in applying the doctrine of judicial estoppel to McNemar's claim. CONCLUSION McNemar has asserted a viable claim of unlawful discharge under the ADA. The district court erred in ruling that McNemar was judicially estopped from establishing a prima facie case of discrimination. The decision of the district court should be reversed and the case remanded to permit McNemar to pursue his ADA claim. Respectfully Submitted, C. GREGORY STEWART General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel CAROLYN L. WHEELER Assistant General Counsel ___________________________ 10 The district court raised concerns that McNemar would be permitted to obtain a "double recovery" if he were allowed to maintain his ADA action. 4 AD Cases at 900. But even if one assumed that it would amount to "double recovery" for McNemar to receive both disability benefits and make whole relief for his unlawful discharge, that issue can be addressed at the relief stage of the case by, for example, offsetting the disability benefits against McNemar's monetary damages. Any concern with McNemar obtaining a double benefit can be addressed without barring McNemar's suit outright. 25 01-06506 ROBERT J. GREGORY Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W., Room 7032 Washington, D.C. 20507 (202) 663-4059 January 23, 1996 26 01-06507 CERTIFICATE OF BAR MEMBERSHIP I hereby certify that I am employed by and represent in this case the United States Equal Employment Opportunity Commission, an agency of the federal government. It is my understanding that, as an attorney representing the federal government, I need not become a member of the bar in this Court in order to appear in this matter. Robert J. Gregory CERTIFICATE OF SERVICE I further certify that two copies of the attached brief were mailed this 23rd of January, 1996, by overnight mail, postage prepaid, to each of the following counsel of record: Alan B. Epstein Anthony Haller Jablon, Epstein, Wolf & Pepper, Hamilton & Scheetz Drucker 3000 Two Logan Square The Bellevue, Ninth Floor 18th & Arch Streets Broad Street at Walnut Philadelphia, PA 19103 Philadelphia, PA 19102-3808 Steven Koslow New Jersey Employment Lawyers AARP Assoc. 601 E Street, N.W. c/o Richard E. Yaskin, Esq. Washington, D.C. 20049 Staffordshire Professional Center Building D Vicki Laden 1307 White Horse Road Employment Law Center Voorhees, NJ 08403 A Project of the Legal Aid Society of San Francisco 1663 Mission Street, Suite 400 San Francisco, CA 94103 Robert J. Gregory 01-06508