Americans with Disabilities Act --
Definition of "Reasonable Accommodation." The Americans
with Disabilities Act (ADA) requires covered employers to
provide "reasonable accommodations" to employees who become
disabled. The ADA defines reasonable accommodation to include,
among other things, "reassignment to a vacant position." 42
U.S.C. 12111(9)(B). The Supreme Court granted certiorari in
Huber v. Wal-Mart Stores, Inc., No. 07-480, to decide
whether the ADA requires an employer to reassign a disabled
employee to an equivalent position if one is vacant and the
employee is qualified to fill it, or whether instead the ADA
merely requires an employer to give such an employee the
opportunity to compete for such a position.
This case is of great importance to all
employers covered by the ADA. If the Supreme Court reverses, all
standardized, non-discriminatory hiring policies requiring that
the most qualified candidate be hired will be vulnerable to
challenge under the ADA.
The plaintiff in Huber, Pam Huber,
sustained an injury while working for Wal-Mart that rendered her
unable to perform the essential functions of her job as a
grocery order filler. Wal-Mart permitted Huber to apply for an
equivalent vacant position that she could perform, but
ultimately hired another candidate under the company's policy of
hiring the most qualified applicant for a given position.
Wal-Mart then placed Huber in a janitorial position in a
different facility that paid less than half her previous hourly
wage. Huber sued under the ADA, arguing that the Act entitled
her to be assigned to the equivalent vacant position as a
"reasonable accommodation." The district court held that it did,
but the U.S. Court of Appeals for the Eighth Circuit reversed,
concluding that the ADA is "not an affirmative action statute"
and thus does not require an employer to turn away a more
qualified applicant. Wal-Mart, the Court of Appeals held,
satisfied its obligation to provide a reasonable accommodation
by placing Huber in the janitorial position.
The Eighth Circuit's decision deepened an
existing split among the circuits. While the Tenth and D.C.
Circuits have held that a qualified disabled employee must be
reassigned to a vacant position, the Seventh and now Eighth
Circuits have held that the employee need only be provided the
opportunity to compete for the position.
Amicus briefs in support of the petitioner will be due on
January 28, 2008; amicus briefs in support of the respondent
will be due on February 27, 2008. Any questions about this case
should be directed to Andrew Tauber (202-263-3324) in our
Washington, D.C. office.
-- Tax Exemption for Pre-Confirmation Asset Transfers.
Section 1146(a) of the Bankruptcy Code exempts from stamp or
other similar taxes any asset transfer "under a plan confirmed
under" Chapter 11 of the Code. 11 U.S.C. § 1146(a). The Supreme
Court today granted certiorari in State of Florida Department
of Revenue v. Piccadilly Cafeterias, Inc., No.
07-312, to resolve a circuit split over whether this provision
exempts from such taxes asset transfers that occur prior to the
confirmation of a plan.
As indicated by the amicus support Florida
received from other jurisdictions at the petition stage, this
case is significant for all taxpayers in bankruptcy proceedings
seeking to transfer assets prior to the confirmation of a
reorganization plan under Chapter 11.
During Piccadilly Cafeterias' Chapter 11
proceedings, but before confirmation of its reorganization plan,
the bankruptcy court approved the sale of Piccadilly's assets to
a third party and held that the sale was exempted from stamp
taxes pursuant to Section 1146(a) (then codified at Section
1146(c)). The Florida Department of Revenue filed an adversary
action seeking a declaration that the assets were not exempt
under section 1146(a) because the sale took place before the
confirmation of the plan. The bankruptcy court and the district
court both held that the sale was a transfer "under" the
confirmed plan and that the assets were therefore tax-exempt. On
appeal, the Eleventh Circuit agreed, declining to follow the
Third and Fourth Circuits which have held that Section 1146(a)
exempts only transfers that occur after a plan has been
confirmed. According to the Eleventh Circuit, Section 1146(a)'s
tax exemptions may apply to pre-confirmation transfers that are
necessary to the consummation of a confirmed plan if there is
some nexus between the pre-confirmation transfer and the
Amicus briefs in support of the petitioner
will be due on January 28, 2008; amicus briefs in support of the
respondent will be due on February 27, 2008. Any questions about
this case should be directed to Andrew Tauber (202-263-3324) in
our Washington, D.C. office.