Supreme Court Rules Against Retiree in Disability Bias Case (2)

Retirees lack the basis to sue their former employers under the Americans with Disabilities Act for unlawful denial of post-employment benefits after leaving their jobs, the US Supreme Court ruled.

Retirees don’t qualify as “qualified disabled workers” under the ADA unless they hold or seek a job at the time of the alleged discrimination, the high court majority held. They affirmed a US Court of Appeals for the Eleventh Circuit order that Karyn Stanley lacked standing to sue the City of Sanford, Fla..

The ruling addresses a conflict among six circuit courts on whether the ADA permits a disabled former employee to challenge employers’ decisions concerning post-employment distribution of fringe benefits earned during their work tenure. Disability rights advocates have warned that a decision against Stanley risks jeopardizing the health care of disabled workers.

The Supreme Court’s analysis examined Title I of the ADA, which prohibits discrimination against qualified individuals with disabilities in compensation and employment conditions.

A “qualified individual” is someone who can perform the essential functions of a job they hold or desire, with or without reasonable accommodation.

Justice Neil Gorsuch, who wrote for the majority, said the statute’s use of present-tense verbs “holds,” “desires,” and “can perform” underscores that the ADA protects only those who are either employed or actively seeking employment at the time the discriminatory act occurs.

“If Congress wishes to extend Title I to reach retirees like Ms. Stanley, it can. But the decision whether to do so lies with that body, not this one,” Gorsuch said.

Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett agreed with this holding.

Caroline Pieper, an employee benefits attorney at Seyfarth Shaw LLP who’s not involved with the case, said she agreed with the majority that the ADA “protects people, not benefits, from discrimination.”

“Employers all the time are very hesitant to make changes to retiree benefits because there are a bunch of different legal landmines you could step on when you do that type of thing,” Pieper said. “This case will help give employers a little bit of comfort, at least under the ADA, from a litigation risk standpoint.”

Alternative Argument

Thomas and Barrett objected to the plurality opinion addressing an alternative argument Stanley raised later in the litigation—that she might have experienced discrimination while still employed. Gorsuch attempted to clarify whether future plaintiffs could bring claims involving post-employment benefits under different timing theories.

But this theory wasn’t squarely presented in Stanley’s high court petition, and it’s inappropriate for parties to bring up new issues at the merits stage after securing review on a narrower question, Thomas wrote in a concurring opinion.

“Stanley asked this Court to grant certiorari to resolve a discrete Circuit split,” he said. “After we agreed to do so, she asked us to resolve an entirely different legal question. I do not find it ‘profitable’ to reward Stanley’s bait-and-switch in these circumstances.”

Gorsuch, Alito, Kagan, and Justice Sonia Sotomayor said in a plurality opinion that Stanley didn’t allege enough facts in her pleadings to support that theory. She appeared to disavow the theory on appeal, and the Eleventh Circuit treated it as waived, they said.

Law’s ‘Clear Design’

Justice Ketanji Brown Jackson dissented in full, criticizing the majority’s approach, including its core conclusion that Stanley was not a “qualified individual.”

The majority overlooked “the clear design of the ADA,” which is to eliminate disability-based discrimination in all aspects of employment, including post-employment benefits, and ignored Congress’s intent to protect disabled individuals from adverse treatment, she said.

Discriminating against individuals with disabilities in retirement benefits constitutes employment-based bias, which should be actionable under the ADA, Jackson said.

Sotomayor agreed in part with Jackson that retirees should have the right to sue. The ADA’s definition of “qualified individual” should be broadly interpreted to protect retirees affected by discriminatory policies from their previous employment, she said.

Penn State Law professor Michael Foreman said he agreed with Jackson.

“The majority is sort of missing the forest for the trees,” because Stanley alleged discrimination on the basis of disability, yet it focused on the qualified individual language, he said.

“If you go to the legislative history, as Justice Jackson points out, that language was put there to deal with reasonable accommodation issues” to prevent employers from being forced to hire unqualified individuals with disabilities, said Foreman, who filed an amicus brief for the National Employment Lawyers Association and National Employment Law Project in support of Stanley.

Retirement at 47

Stanley was diagnosed with Parkinson’s disease, which forced her to take disability retirement at age 47 in 2018, almost two decades after she joined the fire department as a city firefighter.

When Stanley first joined the department, the policy provided that employees retiring for qualifying disability reasons, such as Parkinson’s disease, would receive free health insurance until they turned 65. However, the benefits plan was changed in 2003, according to court documents. Under the agency’s new plan, disability retirees like Stanley are only entitled to the health insurance subsidy for 24 months after retirement.

Stanley was set to become responsible for her own health insurance premiums starting in December 2020. She sued in April 2020 to obtain her entitlement to the long-term healthcare subsidy. The city maintained that former employees like her lack standing to sue.

Counsel for the parties didn’t immediately respond to requests for comment.

Gupta Wessler LLP represented Stanley. Dean Ringers Morgan & Lawton PA represented the city.

The case is Stanley v. City of Sanford, U.S., No. 23-997, 6/20/25.