First Circuit Weighs in on ADA’s ‘Single Integrated Employer’ Test and Reckless Indifference Standard for Punitive Damages

In Burnett v. Ocean Properties, Ltd., et al., the First Circuit Court of Appeals upheld a jury verdict for the plaintiff in his failure to accommodate claim under the Americans with Disabilities Act (ADA) and the Maine Human Rights Act (MHRA). The court’s opinion provides a useful reference for the “single integrated employer” test for liability under the ADA. More significantly, it is an important reminder for employers regarding how seriously to evaluate accommodation requests, how promptly to respond to them, and how informed employees should be throughout the process. The First Circuit’s ruling shows that the consequences of failing to adequately respond to accommodation requests could lead to a finding that the employer acted with reckless indifference and is liable for punitive damages.

Background

Ryan Burnett, who relies on a wheelchair for mobility, worked as an associate at a call center in Maine where he took room reservations for 45 hotels and resorts in the United States and Canada. Ameriport, LLC was Burnett’s employer, and Ocean Properties, Ltd. was a related entity (Ameriport used the “Ocean Properties” moniker). The call center where Burnett worked was located in a golf clubhouse, which had heavy, wooden doors at its public entrance. Burnett found it difficult to hold the doors open as he pushed himself through the entrance in his wheelchair.

In August 2014, Burnett asked the acting office manager to install push-button, automatic doors. The office manager did not respond, but forwarded Burnett’s request to two supervisors. Nearly two weeks later, one of the supervisors, Lori Darsaoui, emailed the person who constructed the clubhouse and asked if the doors were “ADA compliant.” Receiving no response, Darsaoui followed up nearly three weeks later, and received the following response: “As constructed when the building was built, [y]es.” According to Burnett, no one followed up with him to further discuss his request or inform him that the doors were “ADA compliant.”

In October 2014, Burnett injured his wrist while entering the clubhouse. He reported the injury, but again no one followed up with him regarding his August 2014 accommodation request. In June 2015, he filed a disability discrimination complaint against Ameriport and Ocean Properties with the Maine Human Rights Commission (MHRC). Darsaoui met with Burnett to discuss his MHRC complaint During this meeting, Darsaoui mentioned nothing about his August 2014 accommodation request, and merely informed him that she was “not familiar with ADA compliance.” Burnett resigned in February 2016.

Jury Trial

After a three-day trial in the United States District Court for the District of Maine, the jury entered a verdict for Burnett, finding that the defendants had failed to reasonably accommodate his disability. The jury also found that Ameriport and Ocean Properties were either “joint employers” or “integrated employers” (with more than 500 employees) and awarded Burnett $150,000 in compensatory damages. Finally, the jury found that the defendants had “acted intentionally or with reckless indifference and awarded him $500,000 in total punitive damages ($200,000 under the ADA and $300,000 under the MHRA).” The defendants appealed the jury’s verdict to the First Circuit Court of Appeals.

First Circuit’s Analysis

The First Circuit first addressed the employment relationship between Burnett and the defendants by applying “the ‘widely recognized’ integrated-enterprise test: (i) ‘centralized control over labor relations’; (ii) ‘interrelation between operations’; (iii) ‘common management’; and (iv) ‘common ownership)’” to determine whether Ameriport and Ocean Properties were a single employer. The appellate court found that there was sufficient evidence that Ameriport and Ocean Properties had “a single integrated employer relationship” for purposes of Burnett’s ADA claim. Among other considerations, the two entities shared control over employment decisions; “Burnett received wages and benefits from both Ameriport and Ocean Properties”; and the entities shared personnel, email addresses, and a corporate office. The court found no evidence of the fourth factor (common ownership), but noted that satisfying all four was not required for purposes of establishing integrated employer liability.

The court next dismissed the defendants’ argument that Burnett’s requested accommodation was unreasonable because he was a good employee and performing the essential duties of his job, and therefore did not need an accommodation. Noting that a reasonable accommodation “may include … making existing facilities used by employees readily accessible to and usable by individuals with disabilities,” the First Circuit found that Burnett’s ability to do his job successfully—once inside the clubhouse—was immaterial to the defendants’ ADA obligations.

Finally, the First Circuit upheld the jury’s award of punitive damages, finding that there was sufficient evidence that the defendants had acted with reckless indifference to Burnett’s rights because they had failed to follow up with Burnett regarding his accommodation request on three occasions: after he sent the initial accommodation request in August 2014, after he reported his wrist injury in October 2014, and after he filed an MHRC complaint and met with Darsaoui. Despite Burnett’s own testimony that he did not believe Darsaoui acted with reckless indifference, the jury found that her failure to follow up directly with Burnett about his request proved otherwise.

The defendants argued that they had acted in good faith, as evidenced by their anti-discrimination policy and Darsaoui’s consultations with others regarding Burnett’s requests (notwithstanding her failure to follow up with Burnett directly). Finding that these facts amounted to nothing more than “lip service,” the court upheld the jury’s award of punitive damages.

Key Takeaway

The First Circuit’s decision in Burnett is a useful reminder that employers may want to keep employees fully apprised of internal considerations and analyses regarding accommodation requests. Reckless indifference in the ADA context does not necessarily equate to ignoring an employee’s accommodation request. Even if an employer takes steps to determine whether an employee’s request is reasonable, it could still end up liable for punitive damages if it fails to keep the employee in the loop.