An employer’s return-to-work policy resulted in a historic ADA verdict. What can HR learn from it?

Summary

A Union Pacific train conductor dislocated his shoulder, was cleared by his medical providers to return to work with no restrictions, but was barred from safety-sensitive duties under the company’s automatic “1% rule” (which prohibits employees with a 1% annual chance of sudden incapacitation from safety-sensitive roles). The worker sued under the Americans with Disabilities Act (ADA) and Oregon state law. A jury awarded roughly $26.95 million in total damages: $952,863 in front and back pay, $1 million in noneconomic damages and $25 million in punitive damages. The U.S. District Court for the District of Oregon upheld the verdict, holding that the ADA damages cap applies only to compensatory and punitive damages (not to back/front pay) and allocating damages above the federal cap to the state-law claim so the jury’s full award stood.

Key Points

Union Pacific applied a blanket “1% rule” and permanent restrictions for anterior shoulder dislocation rather than conducting an individual assessment.
The employee had medical clearance without restrictions but was nonetheless denied return to safety-sensitive work.
A jury awarded $952,863 in front/back pay, $1 million in noneconomic damages and $25 million in punitive damages (total $26,952,863).
The court held the ADA statutory cap (applicable to compensatory and punitive damages) does not limit back pay or front pay, so the pay award remained intact.
Punitive damages were upheld because the court found intentional discrimination based on the company’s facially discriminatory policy; the court said egregious conduct is not required for punitive damages.
The court allocated damages that exceeded the federal cap to the state-law claim, preserving the full jury verdict.
Practical HR takeaway: blanket, categorical rules that bypass individualised assessments create major legal risk — document assessments, consider reasonable adjustments and involve medical and legal advisers where appropriate.

Context and relevance

This decision matters for employers managing return-to-work, absence and accommodation policies — especially in safety-sensitive industries. Post-pandemic, return-to-work scrutiny has increased and courts are attentive to whether employers make case-by-case determinations or rely on categorical exclusions. The ruling also highlights how plaintiffs can use parallel state-law claims to bypass federal caps and preserve large awards.

Why should I read this?

Short and blunt: if you write, enforce or defend return-to-work or safety policies, this is essential reading. The case shows a single blanket rule — applied without individual assessment — can trigger a multimillion-pound verdict that survives appeal by reallocating excess damages to state claims. We’ve done the slog for you: read this to spot where your policies might be brittle, what to fix fast (individual assessments, clear documentation, legal sign-off), and how to train managers to handle medical returns properly.