Alameda County
Bar Association

Disability Estoppel: The Intersection of Disability Benefits and Disability Discrimination Claims 
By Julia Campins | Campins Benham-Baker, LLP | San Francisco, California |

This article originally appeared in the 2015 ACBA Labor and Employment Section Newsletter.

It seems like an obvious conflict: an employee claims that she has a disability and is qualified and able to work at a job. She complains of discrimination because the employer terminated her because of her disability. Yet, in practically the same breath, she applies for disability benefits, insisting that she is unable to work and is therefore entitled to benefits. She should be estopped from one of those claims, right?

The truth is that the answer is both simpler and more complicated. More precisely, it is, like most other areas of the law and consistent with the best practices in disability law, an individualized inquiry. It is possible for an employee to bring a disability discrimination claim simultaneously with a disability benefits claim, but it must be the proper set of facts, pled carefully on both ends, to survive.

The Supreme Court addressed this scenario fifteen years ago in Cleveland v. Policy Management Systems Corporation. 526 U.S. 795 (1999). The Court held that there is no inherent conflict between an ADA claim and an SSDI claim. But, an SSDI claim may “genuinely” conflict with an ADA claim so as to “negate an essential element” of the ADA claim. Id. at 805-06. Where such a genuine conflict exists, a plaintiff can defeat summary judgment by offering a sufficient explanation for any inconsistency.1 Id. at 806; see also Solomon v. Vilsack, 628 F.3d 555, 561-62 (D.C. Cir. 2010) (explaining Cleveland’s two-part analysis).

If the employee is no longer able to work in his job solely because of the failure to accommodate, he may be able to assert both claims. There is no conflict where the employee could clearly work if given the appropriate accommodation, and the definition of “disability” under the benefits plan does not take accommodations into account. This employee is unlikely to receive benefits in the event the plan contains the “any occupation” change in definition described above, but that would not be an immediate concern. Moreover, if the condition worsens, the employee may be able to retain benefits.

A perfect example of this situation recently arose in the Ninth Circuit. A long-time teacher had a back injury that restricted her ability to keep teaching. She wanted a transfer to a less physically demanding job—Literary specialist. She transferred to this job. Several years later, the principal tried to transfer her back to teaching. She objected. Smith v. Clark Cnty. Sch. Dist., 727 F.3d 950, 953 (9th Cir. 2013). The court considered and applied Cleveland. It noted that, “Because [disability benefit plans do not] account for an applicant’s ability to work with reasonable accommodation, it is possible that a person could claim he or she qualifies for disability benefits and still be able to work if accommodated.” Id. at 957 (citations omitted). 3

As Smith explains, “There is no inconsistency between being totally disabled at a particular point in time and in not being totally disabled at a later point in time.” Id. at 957 (citations omitted). 4 Or if the employee had a disability but was able to work, was subsequently discriminated against, and that discrimination exacerbated the disability or added to it a mental health component or by worsening the existing medical condition, then there may be a viable claim that the employee was qualified at the time of the discrimination, and now is unable to work.5

If the employee acquired a new disabling condition prior to termination, but the underlying discrimination relates to a different disability, then the claims may not conflict at all, although economic damages in the discrimination claim may be limited. Additionally, be aware of the varying statutes of limitations and claims-filing periods for disability benefits claims, appeals and lawsuits on the one hand, and administrative charges (EEOC and the state equal employment opportunity organizations) and lawsuits on the other hand. The claims may proceed simultaneously on entirely different schedules and with varying requirements for sworn testimony.

As a practical matter, the conflict between benefits and discrimination claims does not end with the conclusion of the disability discrimination claim. Most disability benefits plans contain offset provisions for “other income benefits.” At times, “severance” payments may be considered “other income benefits.” The classification of a discrimination settlement is therefore important to the employee and must factor into any analysis of whether a settlement offer is worth accepting.

Finally, if there is an insured plan at issue, the employee can bring a disability benefits suit against the insurer directly for benefits under the employer-sponsored plan, see, e.g., Cyr v. Reliance Std. Life Ins. Co., 642 F.3d 1202 (9th Cir. 2011), so the inclusion of “insurers” in the list of entities released by an agreement could spell trouble for a benefits claim. If the disability benefits plan is self-insured, expressly excluding disability benefits claims protects a client who presently needs those benefits.


Even those courts that fail to find a conflict at the summary judgment stage often express skepticism of the underlying merits for a plaintiff seeking both remedies. The courts recognize that employers may feel like the plaintiff is attempting to “double-dip,” especially if the disability benefits are coming from an employer-sponsored plan. No matter how meritorious a former employee’s dual claims may be, even though the door is not necessarily closed to pursuit of both claims, he should tread lightly and with an understanding of the potential for loss on both.


1) See, e.g., Ramirez v. Merced Cnty., No. 1:11-CV-531, 2013 WL 4780440, at *10 (E.D. Cal. Sept. 5 2013) (exploring what kind of explanation would be sufficient and holding that financial hardship or economic necessity does not adequately explain any inconsistency). 2) Disability benefit plans generally define “disabled” as: “as a result of an injury or sickness, an insured cannot perform the material duties of his or her regular occupation.” Many policies (although in general not those purchased on the private market, or policies applicable to higherlevel employees or professionals such as doctors or lawyers) change that definition of disability from this “own occupation” standard to an “any occupation” standard at 24 months. 3) Given the Fifth Circuit’s decision in Vercher, which contradicts the Ninth Circuit’s decision in Saffle, it is possible that the conflict is more prevalent in that Circuit, because more plans can be interpreted to permit the definition of disability to incorporate an accommodation analysis. 4) For example, an employee was on short-term disability but wanted to return to work and was not permitted. He may have a “record of a disability” (his previous disability that caused his leave) or be “regarded as” disabled, and therefore covered by the ADAAA. Alternatively, perhaps he remains “disabled” but could work with an accommodation. 5) For example, the discrimination caused the onset of depression, and now he cannot work. Or, the failure to accommodate a back problem led the back problem to become completely disabling. The employee would have a failure to accommodate claim but also be unable to work, and therefore disabled pursuant to the terms of the disability plan.