Quick Hits

• The Supreme Court heard arguments in a lawsuit over whether retirees can sue their former employers for disability discrimination involving benefit plans.
• Lower courts are divided on the issue.
• The Supreme Court is likely to rule in this case before its current term ends in late June 2025.

On January 13, 2025, the Supreme Court heard oral arguments in Stanley v. City of Sanford, Florida, in which a retired firefighter alleged disability discrimination based on the city’s decision to shorten the duration of health benefits for disabled retirees.

Specifically, the court was tasked with answering the question, “Under the Americans with Disabilities Act, does a former employee, who was qualified to perform her job and who earned post-employment benefits while employed, lose her right to sue over discrimination with respect to those benefits solely because she no longer holds her job?”

Background on the Case

The firefighter served for about fifteen years until she was diagnosed with Parkinson’s disease. She became unable to perform essential job functions and retired in 2018 at the age of forty-seven. When she joined the fire department, employees who retired for disability reasons were eligible to receive employer-paid health insurance until age sixty-five. But the city changed the plan in 2003, so that employees who retired for disability reasons (with less than twenty-five years of service) were eligible for employer-paid health insurance for only twenty-four months after their retirement date.

The U.S. Court of Appeals for the Eleventh Circuit upheld the city’s decision to scale back the retiree health benefit to conserve funds. The firefighter appealed to the Supreme Court.

Supreme Court Hearing

Before the Supreme Court, Deepak Gupta, the attorney for the firefighter, argued that former employees can sue under the ADA for discrimination that occurred against them as qualified individuals while still employed. He also said former employees can legally challenge post-employment discrimination. He noted that an illegal policy occurs at three points: when the policy is adopted, when a person is subject to the policy, and when a person experiences the material effects of the policy.

Gupta argued the city discriminated because it reduced the benefit only for individuals who retired early due to a disability, not those without a disability who completed twenty-five years of service before retirement. He said the plaintiff would have served at least twenty-five years if she had not become disabled.

Frederick Liu, assistant to the solicitor general of the United States, argued the firefighter was a qualified individual with a disability before she retired, and therefore she is entitled to ADA protections. He said this case is a disparate treatment claim, similar to claims of race discrimination and sex discrimination in post-retirement benefits that the court has heard in the past.

Jessica Connor, the attorney for the city, argued that the ADA’s language uses present tense to apply to individuals who can perform a job that they currently hold or desire. Connor argued that the city never discriminated against the firefighter while she was a qualified individual who could perform the essential functions of the job. Connor said the city’s policy only applied to individuals who were permanently and completely unable to perform the essential functions of the job, rendering them outside the protections of the ADA.

Connor noted that Florida law permits governmental employers to change retirement policies before the rights under them vest.

In rebuttal, Gupta said the city’s position “creates perverse incentives for employers to hide discrimination until after retirement.”

Next Steps

It’s unclear when the Supreme Court will issue a ruling in this case, but it is likely to do so before its current term ends in late June 2025. The court’s ruling could resolve the split in the circuit courts.

If the court rules in favor of the city, then employers would be reassured that they probably won’t be held liable for disability discrimination when they make cuts to retiree benefits.

If the court rules in favor of the firefighter, then employers may wish to carefully document their decision-making and nondiscriminatory reasons for reducing retiree benefits. They may wish to consider whether potential benefit changes would impact retirees with disabilities differently than retirees without disabilities.

This case deals with a governmental plan, which means a different result could occur in a case involving a private-sector plan governed by the Employee Retirement Income Security Act (ERISA).