New Jersey Appellate Court Rules That Employers May Not Mandate Psychological Testing of Employees Based on Anonymous Tips | Closely Held Business World

New Jersey Appellate Court Rules That Employers May Not Mandate Psychological Testing of Employees Based on Anonymous Tips | Closely Held Business World

The Americans with Disabilities Act (“ADA”) provides, in part, that an employer “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.”[1]  A New Jersey appeals court recently interpreted this provision and ruled that an employer violated the ADA when it ordered its employee to undergo psychological testing based on anonymous and uncorroborated claims by the employee’s coworkers.[2]

The Township Manager for the Township of Lakewood received an anonymous letter, purporting to be from a concerned employee of the Department of Public Works (“DPW”), relating to the Appellant, a truck driver for the DPW.  The letter claimed that “everyone knows he has some sort of mental issues” and that he puts other employees “at risk with his tirades and outbursts on a daily basis.”  It further described the Appellant as “a time bomb waiting to explode” and requested that something be done to ensure the safety of the other employees.

The Township took no action until eight months later when the Township advised the Appellant that he would be sent for a psychological examination to determine his fitness for duty.  Citing the ADA, the Appellant refused to submit to psychological testing.  The Township issued him a Preliminary Notice of Disciplinary Action and subsequently a Final Notice of Disciplinary Action, and ultimately, the Township terminated his employment based on his refusal to attend psychological testing contrary to the express directives of his superiors.

The Appellant appealed his termination to the Civil Service Commission, who transferred the matter to an Administrative Law Judge (“ALJ”) for a hearing.  At the hearing, only one witness testified for the Township, the director of the DPW.  The director testified that the DPW had some trouble with him over the years because he was “at times . . . confrontational, and at other times [he walked] away from someone who wished to speak with him.”  However, the director added that he was not afraid of the Appellant and that he was “no different than any other employee.”  The director further admitted that he had not investigated the allegations in the letter, and he was unsure what action, if any, the Township Manager had taken to verify its contents.

Based on the foregoing, the ALJ concluded that the Township’s demand that the Appellant undergo psychological testing was not reasonably “job-related and consistent with business necessity.”  The Civil Service Commission, however, reversed the ALJ and concluded that the Appellant was properly terminated for his insubordination.

The Appellate Division Decision

The Appellate Division reversed, concluding that the Township violated the ADA when it required the Appellant to submit to psychological testing based on the information in the anonymous letter.  His termination for refusing to submit to the psychological evaluation was therefore improper, and the panel remanded for his reinstatement.

The appellate panel reviewed the applicable regulations and interpretative guidance from the Equal Employment Opportunity Commission (“EEOC”) and summarized the governing standards as follows:

[T]he employer must reasonably believe, either through direct observation or through reliable information received from credible sources, that the employee’s perceived medical condition is affecting his or her work performance or that the employee poses a direct threat.  Then, and only then, may the employer lawfully require the employee to undergo a psychological fitness-for-duty examination.

With respect to the Appellant, the court explained that the Township failed to satisfy these standards because there was no evidence that he was unable to perform his essential job functions as a result of any suspected mental condition, that he had threatened other employees, or that he had a history of disciplinary infractions over his nine-year employment, aside from one incident wherein he was disciplined for refusing to help a coworker.  Notably, because the author of the anonymous letter was unknown, the letter did not provide the requisite reliable information from a credible source that the Township would have been justified in relying upon in ordering a psychological examination.  The panel explained that the information contained within the letter “was exactly the type of innuendo and rumor that the EEOC has advised employers is insufficient to support a mandatory evaluation.”  The appellate court advised that, had the Township wished to take action in response to the letter, the Township could have solicited information from the Appellant’s coworkers and supervisors concerning his job performance.

The Bottom Line

While anonymous complaint systems play a vital role in eradicating other forms of discrimination in the workplace, employers must be conscientious in ensuring that these systems themselves do not become a means of discrimination.  Thus, an employer should seek to corroborate and investigate any anonymous allegations of an employee’s mental health issues before requiring the employee to undergo psychological testing.

[1] 42 U.S.C. § 12112(d)(4)(A).

[2] In re Williams, — N.J. Super. —  (N.J. App. Div. Jan. 25, 2016).

This content was originally published here.



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