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Legal E-Bulletin - December 2007

Undue Hardship

When a reasonable accommodation is requested by an employee with a disability, the employer is required to provide the accommodation unless it can prove that doing so would be an undue hardship. This basic premise is found in the Americans with Disabilities Act (ADA) 1and is considered to be a strict standard to meet.2  There are many factors to be considered even before considering undue hardship. The employer must be covered by the ADA; the employee must be a qualified individual with a disability under the ADA; and the accommodation must be both reasonable and needed in order to perform the essential functions of the job. For purposes of this paper, we will assume that those hurdles have already been cleared, that the employer and employee agree that an accommodation is needed, and that the only remaining question is whether providing the accommodation would be an undue burden on the employer.3

Undue hardship may be claimed by an employer only if the claim is based on an individualized assessment of the circumstances that show that the requested accommodation would cause significant difficulty or expense.4 Several factors must be considered in making a determination of undue hardship, including:

• the nature and cost of the accommodation needed;
• the overall financial resources of the facility making the reasonable accommodation; the number of persons employed at this facility; the effect on expenses and resources of the facility;
• the overall financial resources, size, number of employees, and type and location of facilities of the employer (if the facility involved in the reasonable accommodation is part of a larger entity);
• the type of operation of the employer, including the structure and functions of the workforce, the geographic separateness, and the administrative or fiscal relationship of the facility involved in making the accommodation to the employer; and
• the impact of the accommodation on the operation of the facility.5

Congress, when it enacted the ADA, wanted employers to consider all possible sources of outside funding before making a determination of undue hardship.6  The employer must consider only the net cost of the accommodation, after other funding sources are considered7, as well as what costs might be offset by tax credits or deductions.8

The determination of undue hardship does not end there, however. The Equal Employment Opportunity Commission (EEOC) emphasizes that, if the total cost of the accommodation is an undue burden, then the employer may ask the individual with a disability to pay the difference between the cost that would not be an undue burden and the cost that would be an undue burden. Also, if an employer determines that one particular reasonable accommodation will cause undue hardship, but a second type of reasonable accommodation will be effective and will not cause an undue hardship, then the employer must provide the second accommodation.9
Undue hardship determination cannot be based on employees' or customers' fears or prejudices toward the individual's disability.10  They can not be based on assumptions or opinions based on hypothetical facts either.11Nor can undue hardship be based on the fact that provision of a reasonable accommodation might have a negative impact on the morale of other employees.12 Employers, however, may be able to show undue hardship where provision of a reasonable accommodation would be unduly disruptive to other employees' ability to work.

The EEOC offers the following examples:

Example A: An employee with breast cancer is undergoing chemotherapy. As a consequence of the treatment, the employee is subject to fatigue and finds it difficult to keep up with her regular workload. So that she may focus her reduced energy on performing her essential functions, the employer transfers three of her marginal functions to another employee for the duration of the chemotherapy treatments. The second employee is unhappy at being given extra assignments, but the employer determines that the employee can absorb the new assignments with little effect on his ability to perform his own assignments in a timely manner. Since the employer cannot show significant disruption to its operation, there is no undue hardship.13

Example B: A convenience store clerk with multiple sclerosis requests that he be allowed to go from working full-time to part- time as a reasonable accommodation because of his disability. The store assigns two clerks per shift, and if the first clerk's hours are reduced, the second clerk's workload will increase significantly beyond his ability to handle his responsibilities. The store determines that such an arrangement will result in inadequate coverage to serve customers in a timely manner, keep the shelves stocked, and maintain store security. Thus, the employer can show undue hardship based on the significant disruption to its operations and, therefore, can refuse to reduce the employee's hours. The employer, however, should explore whether any other reasonable accommodation will assist the store clerk without causing undue hardship.

Employers sometimes engage in a cost-benefit analysis that looks at the cost of a reasonable accommodation in relation to the benefit to the employer and the employee. The cost-benefit analysis is not supported by the law itself or the legislative history.14 It is important to remember that the determination of undue hardship has to do with factors related to the employer’s overall resources, and not on the employee’s salary or position.

The cost-benefit analysis is, however, often used by courts and has essentially become a part of case law even though it is not explicitly mentioned in the statute. In evaluating the desirability of a particular accommodation, employers may consider the consequences that the accommodation will produce. This requires an inquiry not only into the benefits of the accommodation, but into its costs, as well.15 Undue hardships are not limited to financial impacts; they also include accommodations that are unduly extensive, substantially disruptive, or that would fundamentally alter the nature or operation of the business.16 For example, an employer may consider the impact of operating the facility beyond normal business hours in allowing an employee to have a flexible schedule in the office.17

An employer is not expected to make a multi-million dollar modification for the benefit of a single individual with a disability, even if the proposed modification would allow the individual to perform the essential functions of a job that she sought.  In spite of its effectiveness, the proposed modification would be unreasonable because of its excessive costs. In short, an accommodation is reasonable only if its costs are not clearly disproportionate to the benefits that it will produce.18

In evaluating the costs and benefits of a proposed accommodation, it is important to remember that the ADA does not require that the employer receive a benefit commensurate with the cost of the accommodation. The concept of reasonable accommodation permits the employer to expect the same level of performance from individuals with disabilities as it expects from the rest of its workforce.19   But the requirement of reasonable accommodation anticipates that it may cost more to obtain that level of performance from an employee with a disability than it would to obtain the same level of performance from an employee who does not have a disability. And Congress fully expected that the duty of reasonable accommodation would require employers to assume more than a de minimis cost.20 It follows that an accommodation is not unreasonable simply because it would be more efficient, in the narrow sense of less costly, for a given level of performance, to hire an employee without a disability rather than an employee with a disability.21

The claim of “undue hardship” is available to both private and public employers; although it is significantly more difficult to make the case that a reasonable accommodation causes an undue hardship on a public employer because the financial resources of a public employer are generally too substantial to assert an undue hardship defense.22 For example, in Nelson v. Thornburgh 567 F. Supp. 369 (E.D. Pa. 1983) a group of state employees with visual impairments had requested several accommodations which were costly. These accommodations included the use of readers, Braille forms, and a computer which stores and retrieves information in Braille, the cost of all of the accommodations was together was high.  However, the district court found that the additional dollar burden imposed by these accommodations was only a small fraction of the state agency’s personnel budget and were not hardships. 

Employers should be careful to look at all of the applicable factors when making an undue hardship determination. These determinations are often difficult, fact intensive, case-by-case analyses (even for the courts).23 It will not be enough to simply say, “Our budget does not allow for that expense.” Courts will look at the overall resources available to the business or agency, including the entity as a whole, as well as outside resources and tax incentives.