Blockbuster & Health Delivery Disability Discrimination Settlements Highlight Need For Tightened Disability Discrimination Risk Management

A public accommodation disabilities charge settlement agreement with Blockbuster Inc. announced by the U.S. Department of Justice and an employment disability discrimination settlement agreement with Health Delivery, Inc. highlight the advisability for U.S. businesses to check and strengthen their disability and other nondiscrimination policies, training and risk management efforts.

On July 19, 2010, the Justice Department announced that an agreement with Blockbuster Inc. to settle a complaint (DOJ Complaint #202-35-231) that charged Blockbuster Inc with violating Title III of the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. §§ 12181-12189.

Retail stores like those owned and operated by Blockbuster generally are places of public accommodation covered by Title III of the ADA. The ADA generally prohibits places of public accommodation, including those operating retail stores, from discriminating against an individual on the basis of disability in the full and equal enjoyment of its goods, services, facilities, and accommodations.  Furthermore, the ADA specifically requires public accommodations to make reasonable changes in policies, practices, and procedures to permit the use of service animals by persons with disabilities.

The settlement resolves a complaint filed by a disabled individual who complained Blockbuster denied her an equal opportunity to enjoy its goods, services, and facilities at several stores because the complainant was accompanied by her service animal. According to the complaint, Blockbuster Inc. employees refused to allow her to access the store with her service animal even after she had contacted Blockbuster management to ensure that she and her service animal would be allowed in Blockbuster stores and had been assured that such access problems would be properly addressed.

Although Blockbuster contended in the course of the investigation of the complaint that it already had policies and training in place about Title III of the ADA, the Justice Department and the complainant contended that these steps failed to adequately achieve the necessary ADA compliance.

While Blockbuster Inc. did not admit wrongdoing, it agreed under the settlement agreement:

  • Consistent with the requirements of Title III of the ADA, not discriminate against any individual on the basis of disability in the full and equal enjoyment of any of its goods, services, facilities, privileges, advantages, or accommodations;
  • Not to refuse to make reasonable modifications to policies, practices, and procedures to afford equal access to the goods, services, facilities, privileges, advantages, and accommodations of its Blockbuster stores by persons with disabilities or when otherwise necessary to avoid discrimination against individuals with disabilities, including but not limited to persons who use service animals;
  • To pay $12,000.00 to the complainant and $10,000.00 to the United States;
  • To distribute to employees with contact with the public and conspicuously where employees can read an-agreed upon  Service Animal Policy that will ensure equal access for persons with disabilities who use service animals to all facilities that it operates;
  • To keep on hand in all stores for any store customers who wish to, upon request, read the Policy and post under the “Stores” link on its website ( in an accessible format (e.g., HTML) the terms of the Service Animal Policy consistent with the requirements of Title III of the ADA;
  • To conduct Justice Department-approved employee training as specified in the settlement agreement;
  • To post in a conspicuous location in the public entryways of all Blockbuster stores a “Service Animals Welcome” sign with information about how to access a required ADA Complaint Line and other agreed upon content; and
  • To establish and administer a grievance program through which it will receive and investigate customer complaints of alleged ADA Title III violations.

Rising Employment Discrimination Exposures

The Blockbuster Inc. settlement is one of many signs of the rising discrimination exposures businesses face under federal discrimination public accommodation and employment laws.  The Justice Department under the Obama Administration is devoting significant resources to the investigation and prosecution of claims that businesses are violating the public accommodation provisions of the ADA.  This heightened enforcement emphasis has resulted in the Justice Department’s announcement of more than 20 ADA public accommodation claims since January 1, 2010. See here.

Meanwhile, Equal Employment Opportunity Commission (EEOC) also continues to vigorously pursue disability and other discrimination charges.  On July 9, 2010, for example, the EEOC announced that Health Delivery, Inc. had agreed to pay $45,000 to settle charges that engaged in prohibited disability based employment discrimination by refusing to hire an employee with a record of a disability.  Health Delivery, Inc., a Saginaw, Mich.-based health services provider had been charged with violating the ADA by unlawfully refusing to return to work an employee with a record of depression even though she had completed a course of treatment and had been approved to return to work.  In addition to the paying the required settlement, Health Delivery, Inc. also agreed to make disability discrimination policy changes and to provide training to all of its management and supervisory employees regarding the ADA.

Businesses Must Act To Manage Risks

In light of this continuing emphasis on investigation and prosecution of disabilities claims, businesses should review and update their existing policies and practices prohibiting unlawful discrimination in employment and the provision of services based on race, color, religion, sex, familial status, national origin, disability, veteran status or other basis prohibited by law and other steps to be prepared to demonstrate their compliance in operation as well as form. While adopting and communicating appropriate policies prohibiting unlawful discrimination in the provisions of goods, services, and employment is an important element of compliance, businesses also need to take necessary steps to ensure that their customers, workforce and operations comply with these policies in practice.  Businesses should not assume that the usual recital of their equal employment and services policies alone will suffice.  Businesses also need to have and administer well-documented practices and procedures governing the report, investigation and disposition of complaints.  These procedures should include clearly written and well communicated procedures to be used to report suspected violations.  Businesses also must take appropriate, well-documented steps to communicate and train workforce members regarding the policy, establish and communicate clear procedures requiring employees both to comply with these rules and to report known or suspected violations.  Businesses also should consider establishing compliance hotlines and using other compliance audit processes to monitor and address possible violations.  They should be prepared to demonstrate they take seriously and take appropriate action to investigate suspected violations, to rectify confirmed violations, and to appropriately discipline employees or others that participate in prohibited violations.   

About the Author

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer has more than 23 years experience working with employers, professional employment organizations, employee benefit plan sponsors and administrators and others on a wide range of labor and employment, employee benefits, and other management matters.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, the editor of Solutions Law Press HR & Benefits Update and, Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. She regularly speaks and conducts training for the ABA, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations.  Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others.  You can review other highlights of Ms. Stamer’s experience here. 

If you need help with human resources or other management, concerns, wish to ask about compliance, risk management or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer here or (469)767-8872. 

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