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C.A. Says Denial of Disability Retirement Does Not Qualify as Adverse ‘Employment’ Action
Opinion Says Permanently Injured Worker Cannot Bring Discrimination Claim Under California Labor Law Because He is No Longer ‘Qualified Employee’
By a MetNews Staff Writer
Div. Six of this District’s Court of Appeal held yesterday that California’s Fair Employment and Housing Act—which prohibits employers from discriminating against employees in compensation, terms, conditions, or privileges—does not create a cause of action for the denial of disability retirement benefits to a former worker who is no longer capable of performing his job.
Saying that such a worker is no longer a “qualified employee” under the act, the court reasoned that such payments are not accommodations that facilitate a person’s continued employment but instead serve as aid for those who are unable to continue working.
Under Government Code §12940(a), part of the Fair Employment and Housing Act (“FEHA”) an employer may not discriminate “in compensation or in terms, conditions, or privileges of employment” because of the employee’s “physical disability.” However, subdivision (1) provides:
“This part does not prohibit an employer from refusing to hire or discharging an employee with a physical or mental disability…if the employee, because of a physical or mental disability, is unable to perform the employee’s essential duties even with reasonable accommodations….”
In an opinion authored by Justice Hernaldo J. Baltodano, and joined in by Presiding Justice Arthur Gilbert and Justice Tari L. Cody, the court declared:
“[W]e conclude that the denial of disability retirement payments is not an adverse employment action under FEHA. Disability retirement payments do not facilitate a qualified employee’s continued employment, job performance, or opportunity for advancement. To the contrary, they serve as income replacement for employees who can no longer work. We hold that an individual who is not a qualified employee cannot bring a disability discrimination claim under FEHA for the denial of disability retirement payments.”
Injured on Duty
The question arose after John Lowry, a former harbor patrol officer with the Port San Luis Harbor District, was injured while descending a ladder at work. During the incident, his legs became entangled, and his head was submerged under water, causing him physical, psychiatric, and emotional injuries.
After a psychiatrist concluded that he was not fit to return to work and should be medically retired, the district issued a letter to Lowry saying that “it appears that you are not fit to return to work in the Harbor Patrol Department” and asserting that his “single option is retirement.”
Lowry applied for disability retirement, but the district denied the application saying it did “not have enough information to make a determination of disability.” The plaintiff also received a rejection letter from the California Public Employees’ Retirement System (“CalPERS”).
On March 9, 2020, he filed a complaint with the California Department of Fair Employment and Housing and received a right-to-sue notice. Two months later, he filed suit against his former employer.
In the operative complaint, he asserts a single cause of action for disability discrimination pursuant to FEHA based on denial of a disability retirement under § 12940(a).
San Luis Obispo Superior Court Judge Tana L. Coates granted a defense motion for summary judgment, finding that FEHA is “not the appropriate statutory vehicle for [pursuing] Lowry’s disability retirement claim.”
Adverse Employment Action
Baltodano noted that case law has clarified that FEHA protects against unlawful discrimination concerning any employment actions that are reasonably likely to adversely affect a worker’s job performance or ability to advance, not just those amounting to termination or demotion.
Pointing to California Supreme Court jurisprudence construing “terms, conditions, or privileges of employment” as including factors like negative performance reviews, unwarranted criticism, and job assignments, he said “prohibitions against adverse employment actions allow qualified employees with disabilities to continue working without being subjected to discrimination.”
Turning to the CalPERS disability retirement benefits at issue, the jurist wrote:
“Retirement benefits begin when employment ends….[A]bsent evidence that a disabled employee will be able to perform their essential duties with or without reasonable accommodations in the future, disability retirement benefits do not assist such individuals to ‘hold employment.’ ”
Reasoning that an adverse employment action impacts an employee, as opposed to a former worker, he declared:
“We conclude the failure to provide disability retirement benefits to an individual who is not a qualified employee is not an adverse employment action under FEHA.”
Disabled Workers
Lowry argues that the FEHA protections outlined in §12940(a) apply to disabled workers like him who are unable to return to work.
Rejecting that contention, the justice cited the 2007 California Supreme Court case of Green v. State of California, in which the high court said, in a case dealing with a denial of an employee’s request to return to work, that FEHA’s “protective scope” is limited to “employees with a disability who can perform the essential duties of the employment position with reasonable accommodation.”
The plaintiff also asserts that the trial court erred by suggesting that he should have filed a writ of mandate to challenge the denial rather than a FEHA action. Acknowledging that “traditional mandamus would not be available because the District’s determination that Lowry was not disabled was discretionary rather than ministerial,” Baltodano said:
“We nonetheless conclude that this error does not mandate reversal. Lowry could have appealed the District’s decision to an administrative law judge….And if that was adverse, Lowry could have filed a petition for writ of administrative mandamus….Thus, ‘[o]ur conclusion does not render an employee who believes [they have] been wrongfully denied a disability retirement without remedy.’ ”
He added:
“We also reject Lowry’s claim that mandamus would not provide an adequate remedy because it does not provide for attorney’s fees. This would turn the mandamus requirements on their head….[T]he law does not provide…that a statutory remedy is available whenever mandamus is unavailable or inadequate. Because Lowry is not a qualified employee and there is no evidence that receiving disability retirement payments would facilitate his holding employment, job performance or opportunity for advancement, the denial of such benefits is not actionable under FEHA.”
The case is Lowry v. Port San Luis Harbor District, 2025 S.O.S. 460.
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