It could happen to you: don't be sued for disability discrimination.

As of July 1994, the Americans With Disabilities Act applies to employers with as few as 15 workers. That's a dramatic change from the previous floor of 25 employees, when the act became effective two years ago.

"Small businesses need to take action fast," says Gary Phelan, a partner

To date, employees have filed 21,500 ADA-related complaints with the Equal Employment Opportunity Commission. "We anticipate that employees will continue to file complaints at a pace of some 18,000 per year," says Phelan. ADA complaints now account for 15 to 20% of all claims filed with the EEOC (see sidebar, "Lawsuit Scorecard").

Lawsuit Scorecard

Number of complaints filed with EEOC: 21,500 Dismissed for lack of jurisdiction: 40% Found without merit: 30% Settled: 30% Total payout to plaintiffs: $11 million Biggest jury verdict: $572,000

"The ADA has become the problem of the decade, given the large number of cases that have been filed," said Don Schackne, president of Personnel Management and Administration Associates.

In light of this change in the law and the rapid pace of litigation, public relations managers need to put their employment practices under a strong microscope.

Be aware of this vital fact: The ADA prohibits employment discrimination against people who are otherwise qualified for a position, but who may have any of a host of mental and physical disabilities. And employers may not discriminate against individuals whom they only perceive to be disabled (see the sidebar, "Who is Disabled?").

Who is Disabled?

Among the conditions that are considered disabilities by ADA:

Deafness                 Blindness
Wheelchair use           Epilepsy
Mental illness           Diabetes
Cancer                   Heart disease
Learning disabilities    AIDS
Recovering alcoholism    Recovering drug abuse
Multiple sclerosis       Bad backs

Conditions Specifically Excluded by the Act:

Kleptomania              Pyromania
Psychoactive substance   Homosexuality
Abuse disorders          Transvestism
Voyeurism

Individuals can sue your firm for any apparent disability discrimination in your procedures for hirings, promotions, bonus awards, benefit plans, terminations or other procedures. The law also requires that you make reasonable accommodations in your workplace for disabled employees, unless you can prove that such accommodations would pose an undue hardship on your company.

State laws (which typically apply to smaller businesses) are also becoming more stringent in response to the new federal law. More than 40 states already have legislation that outlaws discrimination against the disabled for companies of all sizes. The California law, for example, triggers at five workers and the Connecticut law at three.

Here's another indication that smaller businesses are getting hit with charges: So far, the heaviest concentration of ADA lawsuits (when comparing the number of lawsuits to the size of the workforce) are in Kansas, New Mexico and Colorado -- states where small enterprises predominate.

To protect yourself, be aware of the important trends that have developed over the past year. For example, bad backs are the most common disability cited in the cascade of lawsuits mentioned above. Mental illness comes in second (see sidebar, "Disabilities Cited in Lawsuits").

Disabilities Cited in Lawsuits

Back problems 18.0%
Mental illness 9.8%
Heart trouble 4.3%
Neurological disorders 3.7%
Diabetes 3.6%

Bad backs were the most common disability cited by plaintiffs filing disability-related complaints with the EEOC.

Attorneys have had time to gather information on the most common errors managers are making in complying with the law. Purge your firm of the following practices that have gotten others into hot water.

Firing an Employee

Nearly half of all ADA lawsuits -- the largest portion by far -- are filed because terminated employees are claiming they were wrongfully discharged.

Lesson learned: Don't fire an employee for a real or perceived disability. You should terminate individuals only for legitimate reasons, such as poor work performance.

Instead of firing people because they have disabilities, make reasonable accommodations in your workplace for them. About 22% of the disability lawsuits, so far, are based on charges that employers would not provide reasonable accommodations for disabilities. A person with a bad back, for example, may need special seating or a varied work schedule.

Here's some good news: The vast majority of accommodations can be accomplished quite easily, and at minimal cost. According to the EEOC, about 60% of the disabled require no accommodations at all, and about 70% of accommodations cost employers less than $100.

"That's a fair estimate, based on our experiences throughout the country during the last 12 years," says John C. Fox, an employment attorney at Fenwick & West. "We have found that the average accommodation costs less than $250. This is a great source of comfort to business people."

Consider how a change in a work procedure can accommodate a disability. After all, there is little or no cost involved in changing a work process and often this is all that someone with a disability requires. In some cases this may involve allowing an individual to take time out from work, adjusting work schedules, re-arranging work stations, or breaking jobs down into components that can be reassigned to other individuals. Businesses often don't think of these alternatives.

Try to spot policy risks before they turn into problems. Look around your business. What kinds of policies are in place for the disabled?

In particular, dust off your policies concerning the way employees are evaluated. Failing to make honest evaluations -- and failing to put those evaluations in writing -- can be dangerous.

Suppose you have an employee who is not performing up to the level required by the job. Because you believe he or she will eventually develop the skills needed by the job, you decide to avoid giving him a bad performance review. When his performance does not improve, you fire him.

Now, suppose that individual has a disability. You are open to a wrongful discharge lawsuit for disability discrimination, because the employee's written evaluations, if any, do not reflect the poor performance level that was the actual -- and legitimate -- reason for dismissal.

"You should establish good policies and procedures for reviewing the performance of employees and maintain records of such reviews," says Charles G. Bakaly Jr., a labor and employment lawyer with the Los Angeles firm of O'Melveny & Myers. Develop a disciplinary system that causes employees to be counselled and warned for improper performance.

"Many employers don't like to give negative evaluations because they feel it's bad for morale," says Theodore J. St. Antoine, professor of law at the University of Michigan. "Then, when they fire an employee suddenly, it looks suspicious." Without documentation, a worker has a leg up in a lawsuit when claiming dismissal was for other -- illegal -- reasons.

Establishing discharge procedures isn't enough. You have to make sure supervisors know and use them. "Communicate your policies so a supervisor does not fire someone in the wrong manner and drag the company into court," says Schackne.

"Training supervisors in good personnel practices includes instruction on how to counsel employees," says Nancy L. Abell, partner at the firm of Paul, Hastings, Janofsky & Walker. Be safe: Institute procedures to double check supervisors' actions to assure adherence to company policies.

Refusing to Hire an Individual

Of the lawsuits relating to disability to date, about 15% claim that employers discriminated when hiring the plaintiffs.

Don't make that mistake! A person's disability cannot be considered when making a hiring decision. To determine the best job applicant, consider only skills. To do this correctly, you must first define the essential functions of each position and then list the skills required to perform those functions. "The law prohibits discrimination against any person who can perform the essential functions of a job," says Phelan. "So the critical thing is to analyze each of your tasks, then identify which facets of them are indispensable."

During the interview, each of your questions and statements to the applicant should relate to the skills required to carry out the written job descriptions. Do not base your employment decision on the inability of any applicant to perform an activity.

Just as a paper trail can help defend you against wrongful discharge lawsuits, it can also protect you from charges of hiring discrimination. "One of the biggest mistakes is failing to take notes about what transpired during the hiring interview," says Ralph C. Smith Jr., a partner at Smith, Perry & Epps. Your notes should record the questions you asked, and should reveal how those questions were intended to elicit responses that related to skills neccessary for the position to be filled.

The alternative to a written paper trail is a fuzzy memory about what transpired during the screening process. Having to admit that you have forgotten what transpired at an interview, and most likely even forgotten the applicant, can make a defense very difficult. Comments Smith, "Two years down the road you can be faced with having to try to remember what the applicant was saying."

Smith suggests sending letters that explain why applicants were turned down. Say something such as "We have examined your qualifications and we have other applicants who are more qualified for the job." How about adding more detail? No. "The more you say the more you may have to hold yourself out to prove later," says Smith.

No Protection for Poor Performance

What if you hire a person with a disability, and it becomes clear that the person cannot perform the essential functions of a job, after you have tried to make reasonable accommodations for the disability? Is your business stuck with an expensive addition to the payroll?

Not at all. The law does not protect a disabled individual if, in fact, that individual cannot perform the essential duties of a position after reasonable accommodations have been made.

Here's an example: To fill an account position, you have hired a person with a bad back. You believed that the new hire would be able to handle the work load of the new position in your business, despite the disability.

As it turns out, you were wrong. Your new hire misses a lot of work, is unable to attend important meetings, and so on. You attempt to make accommodations for the individual, to no avail. You change seating arrangements, juggle work hours, set meetings up in advance. Still, the new hire misses a lot of work. In this case, you can legally act on that fact, even though it is a result of a disability. (This example is only included to illustrate a point. You should always seek advice from your attorney before making employment decisions similar to this one.)

Act now. Undertake the right moves to preempt problems down the road. Says Phelan, "With the expansion of remedies to plaintiffs to include punitive and compensatory damages under the Civil Rights Act of 1991, as well as the attorney fees involved, the ramifications of not taking this issue seriously are very costly."

Where to Call

For more information on the ADA

Regional Disability and

Business Technical

Assistance Centers

Toll-free number for reaching any of the centers: 800/949-4232 (voice and TDD)

Region I (ME, NH, VT, MA, RI, CT): 207/874-6535 (voice and TDD)

Region II (NY, NJ, Puerto Rico): 609/392-4004 (voice and TDD)

Region III (PA, DE, MD, DC, VA, WV): 703/525-3268 (voice and TDD)

Region IV (KY, TN, NC, SC, GA, AL, MS, FL): 404/888-0022 (voice and TDD)

Region V (OH, IN, IL, MI, WI, MN): 312/413-1407 (voice and TDD)

Region VI (AR, LA, OK, TX, NM): 713/520-0232 (voice) 713/520-5136 (TDD)

Region VII (IA, MO, NE, KS): 314/882-3600 (voice and TDD)

Region VIII (ND, SD, MT, WY, CO, UT): 719/444-0252 (voice and TDD)

Region IX (AZ, NV, CA, HI, Pacific Basin): 510/465-7884 (voice), 510/465-3189 (TDD)

Region X (ID, OR, WA, AK): 800/435-7532 (voice and TDD)

Lawsuit Scorecard

Number of complaints filed with EEOC: 21,500

Dismissed for lack of jurisdiction: 40%

Found without merit: 30%

Settled: 30%

Total payout to plaintiffs: $11 million

Biggest jury verdict: $572,000

Who is Disabled?

Among the conditions that are considered disabilities by ADA:

Deafness

Wheelchair use

Mental illness

Cancer

Learning disabilities

Recovering alcoholism

Multiple sclerosis

Blindness

Epilepsy

Diabetes

Heart disease

AIDS

Recovering drug abuse

Bad backs

Conditions Specifically Excluded by the Act:

Kleptomania

Psychoactive substance

Abuse disorders

Voyeurism

Pyromania

Homosexuality

Transvestism