In September of 2011 the Phoenix office of the Equal Employment Opportunity Commission sued a Phoenix area Outback Steakhouse restaurant for allegedly firing a waiter because of his disability, a traumatic brain injury that has slowed his thinking, impaired his speech and causes him to wear prism glasses.  The EEOC claims the employer violated the Americans with Disability Act.

A protected person who believes he or she has been the victim of an employer who violated the ADA may file a complaint with the EEOC.  The EEOC then becomes the alleged victim’s knight in shining armor who spends federal time, money and resources to take action against the employer who allegedly violated the ADA.   Even if the employer has the law and the facts on its side, the employer has to make a choice between negotiating the best settlement possible or spending $50,000 or more on attorneys fees defending a lawsuit.

The ADA is a trial lawyer’s dream and an employer’s nightmare.  It is also a perfect example of the law of unintended consequences.  This federal law was intended to protect employees who have disabilities from being fired.  The law may accomplish that purpose in some cases, but it has also had the unintended consequence of making it much more difficult for handicapped people to obtain a job.  Employers know that the risk of being sued by an employee is off the charts if they hire a handicapped person so they rarely hire the handicapped.  Read “The Unintended Consequences of the Americans with Disabilities Act,” which states:

“The employment provisions of the Americans with Disabilities Act (ADA) exemplify the law of unintended consequences because those provisions have harmed the intended beneficiaries of the Act, not helped them. ada was enacted to remove barriers to employment of people with disabilities by banning discrimination and requiring employers to accommodate disabilities (e.g., by providing a magnified computer screen for a vision-impaired person).  However, studies of the consequences of the employment provisions of ada show that the Act has led to less employment of disabled workers.

Why has ADA harmed its intended beneficiaries?  The added cost of employing disabled workers to comply with the accommodation mandate of ada has made those workers relatively unattractive to firms. Moreover, the threats of prosecution by the Equal Employment Opportunity Commission (EEOC) and litigation by disabled workers, both of which were to have deterred firms from shedding their disabled workforce, have in fact led firms to avoid hiring some disabled workers in the first place.”

The ADA prohibits discrimination on the basis of disability in employment, State and local government, public accommodations, commercial facilities, transportation, and telecommunications.  To be protected by the ADA, one must have a disability or have a relationship or association with an individual with a disability. An individual with a disability is defined by the ADA as a person who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment. The ADA does not specifically name all of the impairments that are covered.

Title I of the ADA requires employers with 15 or more employees to provide qualified individuals with disabilities an equal opportunity to benefit from the full range of employment-related opportunities available to others. For example, it prohibits discrimination in recruitment, hiring, promotions, training, pay, social activities, and other privileges of employment. It restricts questions that can be asked about an applicant’s disability before a job offer is made, and it requires that employers make reasonable accommodation to the known physical or mental limitations of otherwise qualified individuals with disabilities, unless it results in undue hardship.

The Obama administration’s EEOC recently filed a lawsuit that illustrates the absurdity of the ADA.  The EEOC sued Old Dominion Freight Line, Inc. because it refused to allow a recovering alcoholic to drive any of its 18 wheeled commercial trucks.  Consider the employer’s dilemma: does it take the risk and allow a recovering alcoholic to drive its vehicles and possibly drink and drive and cause an accident that kills or injures somebody or does it risk a lawsuit from the employee and the EEOC?  What would you do?  Do we really want federal law and the federal government putting drivers who drink on the road to kill and maim?

Read “Trucking Companies Told to Hire Alcoholics by Obama Administration.”  It’s only a matter of time before the EEOC sues an airline because it won’t let a recovering alcoholic fly an airliner with 300 passengers.

The ADA and the EEOC are examples of why all businesses that have employees should operate through an entity like a limited liability company that protects the owner’s life savings against debts and liabilities of the business.

For more on the ADA, read the EEOC’s “A Guide to Disability Rights Law” and “A Primer for Small Business.”

See “John Woods, Brain-Injured Former Umpire, was Wrongfully Fired by Outback Steakhouse, Says EEOC Complaint; Claims by the Disabled on Rise” and “EEOC Sues Outback Steakhouse over Firing of Brain-injured Waiter.”  For more about Mr. Woods and his injury read “Umpire making a comeback on and off the baseball field” and a lengthy story in the Arizona Republic called “Phoenix umpire perseveres after near-fatal crash.”