An accommodation requiring preferential treatment for a disabled employee is no longer per se unreasonable in the Seventh Circuit. In a recent decision, the U.S. Court of Appeals for the Seventh Circuit held that an employer must reassign a disabled employee to a vacant position for which the employee is qualified, without having to compete for the position, as a reasonable accommodation, unless the employer can demonstrate undue hardship. EEOC v. United Airlines, Inc., No. 11-1774 (7th Cir., 9/7/12).

Until now, Seventh Circuit precedent had established that an employer need not grant a disabled worker a transfer to an open position if doing so would entail preferential treatment, such as violating a collective bargaining agreement, seniority system, or placing a less qualified candidate in a position. The UAL decision is a departure from this precedent, and makes clear that an accommodation is not per se unreasonable just because it provides preferential treatment to the disabled employee.

EEOC v. UAL involved reasonable accommodation guidelines implemented by United Airlines. The guidelines provided that transfer of a disabled employee to an equivalent or lower-level vacant position may be a reasonable accommodation, but specified that the transfer process is competitive, and employees needing accommodation would not be automatically placed into vacant positions. Disabled employees would, however, be allowed to submit an unlimited number of transfer applications, guaranteed an interview, and receive priority consideration over a similarly qualified applicant. The Equal Employment Opportunity Commission ("EEOC") filed suit, contending that the "competitive transfer" policy violated the Americans with Disabilities Act ("ADA").

The ADA includes "reassignment to a vacant position" as a possible reasonable accommodation for disabled employees. The EEOC has long contended that "reassignment" under the ADA requires employers to appoint employees who are losing their current positions due to disability to a vacant position for which they are qualified. Under the EEOC's position, a disabled employee must be placed in an open position for which he or she is qualified without having to compete for the position or demonstrate that he or she is better qualified than the other applicants.

In 2000, however, in EEOC v. Humiston-Keeling, 227 F.3d 1024 (7th Cir. 2000), the Seventh Circuit held that the ADA imposes no such requirement. The court rejected the EEOC's interpretation, noting that the ADA is not a "mandatory preference" statute but rather a "nondiscrimination" statute.

Two years later, in 2002, the U.S. Supreme Court decided U.S. Airways, Inc. v. Barnett, 535 U.S. 391 (2002). There, the Supreme Court held that the fact that an accommodation would provide a preference (in that it would not subject the disabled employee to the same requirements as a non-disabled employee) does not automatically make the accommodation unreasonable. Instead, if an accommodation appears reasonable, the employer must grant the accommodation unless it can demonstrate undue hardship. (In U.S. Airways, the airline prevailed in showing that a disabled employee was not entitled to a transfer that would violate a recognized seniority system. However, it did so based on a fact-specific inquiry into reasonableness and undue hardship, not based on a per se rule that an accommodation is not reasonable if it required violation of the seniority system.)

In EEOC v. UAL, the EEOC argued that following the U.S. Supreme Court's U.S. Airways decision, the Seventh Circuit's Humiston-Keeling decision is no longer good law and must be reversed. This time, the Seventh Circuit agreed with the EEOC. According to the Seventh Circuit, the UAL case provides the opportunity to correct the error that had been created in the law as a result of its Humiston-Keeling decision:

"[W]e now make clear that Humiston-Keeling did not survive Barnett. We reverse and hold that the ADA does indeed mandate that an employer appoint employees with disabilities to vacant positions for which they are qualified, provided that such accommodations would be ordinarily reasonable and would not present an undue hardship to that employer."

Employers in the Seventh Circuit (Illinois, Indiana and Wisconsin) should be aware of this change in the law when addressing requests for reasonable accommodation. If a disabled employee possesses minimum qualifications for the position, transfer requests no longer can be lawfully denied based on a per se rule, even where the disabled employee is not the best qualified for the position. Instead, individual inquiry is necessary to determine if undue hardship exists.