When an employee takes a leave from work due to a medical issue, certain federal and New Jersey state employment rights kick in. Under the federal Family and Medical Leave Act, for example, most employers are required to provide employees with up to 12 weeks of leave due to illness, pregnancy or adoption, or the need to care for an ill family member. Under the New Jersey Family Leave Act, these medical leaves are generally provided with pay.

Despite clear employment laws, employers often run into dangerous territory with medical leaves. Sometimes, they will fail to provide the leave to which employees are entitled. In other cases, workers are retaliated against for taking leave. And, sometimes, employers violate the Americans with Disabilities Act by forcing employees to disclose personal information about their medical conditions. A national retail chain announced this week that it will settle a class action lawsuit that stemmed from a number of the issues above.

Dillard’s Inc. reportedly held a longstanding sick leave policy that ran contrary to federal employment law. The employer reportedly required workers to provide confidential medical information to the company in order to be approved for sick leave, and then fired workers who declined to disclose the information. Dillard’s also allegedly wrongfully terminated employees who took more sick leave than what the company allowed.

The Equal Employment Opportunity Commission sued the company in 2008 on behalf of employees who were required to disclose medical information in order to be approved for sick leave. The ADA specifically prohibits employers from inquiring into the disabilities of employees, unless it is necessary for the conduct of business.

A district court has found that Dillard’s medical leave policy was in fact discriminatory under the ADA and the EEOC is now working to identify victims across the country that were harmed by this policy from 2005 to 2009.

Dillard’s will pay $2 million to these victims and also establish a fund for those who remain unidentified. The company will also have to hire an ADA consultant who will revise the company’s policies and design related training for supervisors and staff, among other remedies.

Source: U.S. Equal Employment Opportunity Commission, “Dillard’s to Pay $2 Million to Settle Class Action Disability Discrimination Lawsuit By EEOC,” Dec. 18, 2012