2004-23

Employer May Be Liable under ADA for Post-settlement Retaliation

The Court of Appeals for the Ninth Circuit has held that a medical practitioner?s Americans with Disabilities Act ("ADA") retaliation claims, based on actions committed by his former employer after the parties signed a settlement agreement, are not barred by California?s litigation privilege when the alleged conduct involves a violation of federal civil rights law. Pardi v. Kaiser Permanente Hosp. Inc., 2004 DJDAR 13843 (9th Cir. Nov. 15, 2004)(published Nov. 16, 2004).

Stephan Pardi, a licensed respiratory care practitioner, worked at Kaiser Medical Center in Oakland, California. Pardi informed his employer that he suffers from severe depression, a disability under the ADA. Between 1997 and 1999, Pardi filed a number of union grievances and Equal Employment Opportunity Commission ("EEOC") charges claiming that his employer refused to grant agreed-upon accommodations for his depression. In 1998, Kaiser responded to Pardi?s accommodation request for a transfer to a different facility by requiring Pardi to first undergo a full psychiatric evaluation. No other respiratory employee requesting a transfer had ever been required to undergo such an evaluation. Kaiser ultimately denied Pardi the transfer.

During the same 1997 to 1999 time period, physicians and patients lodged various complaints against Pardi for unprofessional conduct and inappropriate comments. In April 1999, Pardi was placed on suspension while Kaiser investigated Pardi?s conduct. Pardi was subsequently terminated in July.

Also in July 1999, the union arbitration panel heard Pardi?s numerous grievances. The arbitration panel found in Pardi?s favor, resulting in a five-figure settlement from Kaiser. Pardi then initiated an additional grievance proceeding against Kaiser challenging his termination. In January 2000, Kaiser, Pardi, and the union entered into a settlement agreement. Pardi agreed to withdraw all pending EEOC complaints against Kaiser and release the company from all claims or future claims arising from any event occurring on or before that date, and Kaiser agreed to change Pardi?s termination to a voluntary resignation and pay Pardi $130,000.

Shortly after the January settlement agreement, however, members of Kaiser?s Human Resources Department and Kaiser?s in-house attorney engaged in post-settlement conduct that, among other things, caused the suspension of Pardi?s certification to practice, allegedly hindered Pardi?s chances at other employment, reported him to the Respiratory Care Board based on false charges, and forced Pardi to undergo another psychiatric evaluation. In addition, Kaiser failed to update Pardi?s personnel file to reflect that he had resigned as opposed to being terminated. Pardi sued Kaiser in the U.S. District Court for the Northern District of California, asserting claims for violations of the ADA, intentional infliction of emotional distress, interference with prospective economic advantage, and break of contract. The court granted summary judgment to Kaiser on all claims, finding that the settlement agreement and release and California?s litigation privilege barred the ADA claims that he could not prove his state law claims.

While the Ninth Circuit agreed that summary judgment properly dismissed Pardi?s ADA claims based on conduct occurring before the settlement agreement was signed, the Ninth Circuit held that summary judgment to Kaiser on Pardi?s ADA retaliation claims stemming from Kaiser?s conduct after the settlement agreement was improper. In addition, the court also revived Pardi?s breach of contract and implied covenant of good faith and fair dealing claims related to those actions. The court stated "that California?s statutory litigation privilege [C]alifornia Civil Code ? 47(b)] does not apply to bar an action brought under 42 U.S.C. ? 1983" and explained that its decision was in accord "with the decision of the Seventh Circuit in Steffes v. Stepan Co., 144 F.3d 1070, 1074 (7th Cir. 1998)," where a state litigation privilege was found not to bar an employee?s ADA and Title VII of the 1964 Civil Rights Act claims.

Hence, the court affirmed the district court?s grant of summary judgment on all claims except the claims for breach of the settlement agreement and the ADA claim for post-settlement retaliation. The court vacated the summary judgment as to those claims and remanded the claims to the district court for further proceedings.

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