Written by Caroline M. Austin and Niyah Dantzler from Duane Morris LLP on November 8, 2024
Remote work is here to stay, notwithstanding employers’ efforts to return to pre-pandemic normalcy with either hybrid return-to-office policies or full-time in-person mandates. The debate regarding return to office (RTO) policies focuses on either the need for in-person work to build company culture or encourage employee collaboration, training, and productivity, or the arguments against RTO mandates, including increased employee expense for travel, meals, and child care and pet care services, need for flexibility in start/end times, and negative impact on work-life balance. This article does not take a position on either side of the debate. Rather, this article focuses on some of the employment laws and issues implicated by RTO mandates. Where the workforce comprises mostly at-will employees, who can be terminated for any lawful reason, at any time, employers enjoy broad discretion to set and change workplace policies. However, circumstances exist where an employer’s rigid application or unilateral implementation of RTO policies creates legal risk.
Employers may be required to permit employees with a disability to work remotely as a reasonable accommodation for a disability
The Americans with Disabilities Act (ADA) requires employers to provide reasonable accommodations to qualified individuals with disabilities unless doing so would cause undue hardship, meaning “significant difficulty or expense.” The ADA’s reasonable accommodation obligation, which includes modifying workplace policies, may require an employer to exempt employees with disabilities from RTO mandates.
As with all accommodation requests, if an employee requests remote work as an accommodation for a disability, the employer should engage with the employee in an interactive process. For example, in Martin, the employee made a disability-related request to continue working from home after being mandated to return to office. See Martin v. Avant Publications, No. 3:22cv276 (M.D. Pa., 2024). The employee alleged that the employer issued her a written reprimand for not working in person and terminated her without engaging in the interactive process. The court denied employer’s motion to dismiss.
Employers must apply the same interactive process to physical and mental disabilities. According to the Equal Employment Opportunity Commission (EEOC), the number of charges alleging disability discrimination against employees with anxiety, depression, and PTSD rose by at least 16% for each condition from 2021 to 2022, and continues to rise. The total number of EEOC charges filed alleging failure to accommodate for disability rises each year: 11,706 in 2021, 13,508 in 2022, and 15,318 in 2023.
As part of the interactive process, the employer may explore other accommodations allowing the employee to remain in the workplace. Employers are not required to provide the accommodation requested or preferred by the employee, as long as another accommodation effectively addresses the issue. The employer may request medical documentation from the employee’s healthcare provider to support the employee’s accommodation request, including to confirm the employee has a qualifying disability under the ADA and a disability-related need to work from home. Appropriate questions to ask the employee include what limitations from the disability make it difficult to do the job in person, and how the essential functions of the job could still be performed from the employee’s home.
The accommodation analysis is inherently fact-intensive, often turning on the employee’s essential job functions and whether the employee can perform those functions remotely, which may be informed by prior instances when the employee worked remotely. EEOC guidance makes clear that temporary remote work during the pandemic could be relevant to a subsequent request for remote work and the determination of whether the employee can perform the position’s essential functions remotely. See “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” U.S. Equal Employment Opportunity Commission (last updated May 15, 2023. Given the success of working from home, employers may find it challenging to argue that an employee cannot perform the essential functions of a job remotely or that remote work is an undue hardship.
The ADA does not require an employer to eliminate essential job functions to accommodate an employee with a disability. In fact, the cases challenging employers’ RTO mandates on reasonable accommodation grounds consistently hold that where an employer can show the essential functions of the position require on-site work, the employer’s denial of a remote work request did not violate the ADA. If an employer allows an employee not to perform an essential job function, the employer should document that its decision to relax the job requirement is temporary and not a permanent change in job duties and does not suggest that working on-site is neither preferred nor essential.
Employers are encouraged to consult counsel to ensure compliance with the ADA.
- Inconsistent application and exceptions to RTO policies may lead to discrimination claims
Allowing certain employees to work remotely while requiring others to work in person, resulting in actual or perceived unequal treatment based on protected characteristics, such as gender, race, age, or disability, can stimulate employee discrimination claims.
There are several best practices employers should follow when implementing RTO policies to avoid discrimination claims. First, the RTO policy should clearly outline to whom it applies, expectations, and consequences for failure to abide by the policy. Second, employers should consistently apply the RTO policy to all employees or to all similarly situated covered employees. For example, the company may determine that employees in certain positions must return to in-person work, but employees in other positions may work remotely or on a hybrid schedule. While disability laws may require an employer to allow an employee to work remotely as an accommodation for a disability, employers should avoid or minimize discretionary exceptions to the RTO policy. If a discretionary exception is made, document the circumstances, reasons for, and expected duration of that exception. Third, managers must be trained regarding enforcement of the policy to prevent the perception of preferential treatment caused by lack of enforcement.
- Consider whether RTO mandates conflict with employment agreements
Before mandating that employees return to in-person work, employers should review employment agreements for impacted employees to determine whether they permit remote work. Many employment contracts entered into during the pandemic specified or permitted remote work. If so, unless the employment agreement provides the employer with the unilateral right to change the location of work, an RTO mandate will conflict with the agreement. Employers risk breach of contract claims by employees if they force employees to work in person when their agreements permit remote work.
Typically, an employment agreement provides that it can only be modified in a writing signed by both parties. If the employee declines to amend the agreement to comply with the employer’s RTO mandate, to avoid a breach of contract claim, the employer can abide by the agreement until its expiration or termination, or terminate the employee, if permitted (which may result in the necessity to pay severance). Bottom line – if the agreement provides for remote work, an employer’s unilateral enforcement of the RTO mandate as to that employee poses legal risk.
- Tying bonuses to compliance with in-person work requirements is permissible if done properly
Employers can incentivize employees to work in the office by promising a bonus for compliance with RTO policies. If an employee complies with in-office requirements, the bonus must be paid. Similarly, when employers promise to pay a performance bonus based on pre-established criteria, the bonus must be paid if the employee satisfies the criteria. However, if compliance with RTO policies is not among the pre-established criteria, the employer cannot reduce or withhold the bonus based on the employee’s lack of compliance with RTO policies.
For example, in Bodes v. AstraZeneca Pharmaceuticals, 6:23-cv-05222 (D.S.C. Oct 19, 2023), the employer cut an employee’s annual performance bonus after she failed to work in the office three days per week. The employee’s bonus was based on performance, measured using established criteria in the employer’s compensation plan. The employee alleged that she met the defined criteria and, therefore, was entitled to her full performance bonus. The employee asserted claims for breach of contract, alleging violation of the compensation plan; and failure to pay earned wages. The employer argued that the bonus was non-contractual and discretionary. The matter is pending.
Bonuses are discretionary if the employee has no expectation of payment, the employer retains freedom to decide the amount and timing of payment, and the bonus is not tied to meeting specific goals. Under Pennsylvania law, discretionary bonuses are not wages, such that an employer’s decision not to pay a discretionary bonus will not support a claim for failure to pay earned wages.
If employers want to withhold or reduce a performance bonus for an employee’s failure to comply with RTO mandates, employers should include compliance with RTO policies among the pre-established criteria for the bonus or make the bonus wholly discretionary.
Conclusion
As RTO policies become the new “normal,” employers should continue to reevaluate their policies, stay up to date on legal developments, and consult counsel to ensure compliance with applicable laws.
