A $1,700 Accommodation, a $100,000 Settlement: ADA Lessons for Employers

A Maryland manufacturer will pay $100,000 to settle EEOC claims that it violated the ADA by demoting an employee rather than granting her a $1,700 accommodation request.

Sandra Merson, born with no hearing in her left ear, worked in the loudest area of a Smiths Detection facility, where explosive detection test strips are made. She asked for protective equipment that would let her hear coworkers. She had just received the company's highest performance rating. SDI, with annual revenue above $2 billion, denied the request on the stated ground that the equipment cost $1,700, and immediately moved her to a lower-paid position in a quieter area. The EEOC found reasonable cause, failed to conciliate, and sued in 2024, seeking backpay, compensatory damages and punitive damages for what it called callous indifference to her federally protected rights. SDI settled in April for $100,000 plus unspecified remedial relief.

Expert comment from Daniel R. Levine, Esquire:

A recent $100,000 EEOC settlement provides a useful reminder that employers need to be careful before denying a relatively modest accommodation request—particularly where the alternative is a demotion or other adverse employment action.

According to the EEOC, a Maryland manufacturer denied an employee with significant hearing loss a request for approximately $1,700 in protective hearing equipment and instead demoted her to a lower-paying position in a quieter area. The employee had reportedly received the company’s highest performance rating shortly before requesting the accommodation. The EEOC sued, alleging both failure to accommodate and disability discrimination, and the case ultimately settled for $100,000 plus additional remedial relief.

The practical takeaway is straightforward: reassignment generally should not be the first response to an accommodation request. Employers should first determine whether a reasonable accommodation will allow the employee to remain in the existing position. Just as importantly, the cost of an accommodation cannot be evaluated in a vacuum. An undue-hardship analysis looks at the employer’s overall resources and circumstances—not simply whether management believes the requested accommodation is “worth” the expense.

As with most ADA issues, the interactive process matters. Employers should evaluate requests individually, consider available alternatives, document the process, and be particularly cautious before denying an accommodation and immediately taking an adverse employment action. A $1,700 accommodation can become considerably more expensive when the process is mishandled.

Three lessons worth internalizing

Reassignment is the accommodation of last resort. The ADA does list transfer to a vacant position as a possible accommodation, but EEOC guidance directs employers to first exhaust options that keep the employee in place, unless both sides prefer a transfer. Reassignment is required only once no effective accommodation would let the employee perform the essential functions of the current role, or every other option would impose undue hardship.

Where transfer is warranted, the destination matters. The employee must go to a vacant position equivalent in pay, status, benefits and location, assuming she is qualified for it. Only if no equivalent vacancy exists may the employer move her to a lower-level role, and then to the closest available match, sometimes weighing the employee's own preferences. Demoting a top performer into a quieter, lower-paid job is the fact pattern this case punishes.

Cost weighed against benefit is not an undue hardship defense. Hardship turns on the employer's resources, not on the employee's salary, hours, or permanence in the role. A $1,700 expense against $2 billion in revenue is the reason this settlement reads as it does.

What to do differently

Run the interactive process before making any employment decision, and treat reassignment as the endpoint rather than the opening move. Respond promptly, since unreasonable delay can itself constitute failure to accommodate. Assess each request individually and in good faith, which is also a defense against compensatory and punitive damages. Document everything: requests in writing, and written responses from treating providers on the basis for the request and the alternatives. Before denying anything significant, involve counsel, and check state law, which is frequently stricter than the ADA.

For a detailed look at the case and the ADA accommodation principles it illustrates, see “Manufacturer’s $100K EEOC Settlement Offers ADA Accommodation Lessons,” JD Supra: https://www.jdsupra.com/legalnews/manufacturer-s-100k-eeoc-settlement-2836111/