ADA: Key Concepts for Risk Management

The Americans with Disabilities Act (ADA) requires banks to make "reasonable accommodations" to disabled persons where doing so is "readily achievable." "Reasonable accommodation" means making adjustments for the known physical or mental limitations of a disabled person unless the bank can demonstrate that such adjustments are "unreasonable" or impose an "undue burden."

"Undue burden" means that making the adjustment presents "significant difficulty or expense." Whether an adjustment entails significant difficulty or expense ties to the concept of changes that are readily achievable.

"Readily achievable" means an adjustment is "easily accomplished" and can be carried out without much difficulty or expense. Factors considered in determining whether an adjustment is readily achievable include: 1) nature and cost of the accommodation; 2) financial resources of the provider company (including its parent company); 3) the number of employees of the provider company (including its parent company); 4) geographic separateness and fiscal relationship between the provider company and its parent company; and 5) operations, composition, structure and functions of the workforce of the parent company. Items 3), 4), and 5) are probably more relevant when dealing with the employment, as opposed to the accommodation, provisions of ADA.

The language of ADA is broad and open to interpretation. The non-specificity of this language can be both a blessing and a curse. With vague language, it's difficult to know how much is enough to comply and any decision can be second-guessed. By contrast, very definitive language would leave little room for situational judgment and might necessitate great expense to meet standards that make little or no sense in a given set of circumstances. In any event, the above referenced language from the law is what a court would use as its guide in deciding an ADA case.

As court cases are decided, the precedent offered in those decisions also offers interpretation of the concepts of ADA. To date, there have not been many court cases involving the accommodation provisions of ADA but there have been a few settlements. The media "frenzy" and costs of litigation that can accompany ADA matters tend to promote quick settlements to avoid protracted litigation and harmful publicity.

How should we approach ADA from a risk management perspective? First, assess the likelihood of ADA complaints or court actions. Start by asking some key questions: How many customers or prospects have need for the accommodation? Has a customer complained or asked specifically for the accommodation? How likely is that customer to file a formal complaint?

Next, consider how the bank would present its case if the bank opted not to make the accommodation and, to the extent possible, consider how that decision would be viewed by the public or a court.

Finally, project a rough cost estimate of not making the accommodation: "anticipated chance of action times anticipated chance of adverse decision times the projected costs of penalties and adverse publicity." Compare this cost figure to the cost of making the accommodation(s).

This comparison is clearcut. It is generally possible to estimate the cost of making an accommodation much more accurately than to estimate those of not making the accommodation because the latter involves assumptions. This approach can only serve as a loose guide but would be evidence that the worked through the principles of ADA.Some organizations opt not

to actively make accommodation unless and until there is a complaint or a request for that accommodation. At that time, possibly after some negotiation, a commitment is made to make the accommodation as soon as possible, thereby warding off any action. This can also be an acceptable approach to managing ADA risk and can be defended under the theory that the provider did not know of a need for the accommodation until the request was made.

A Compliance Action advisor, Mike Maher manages the development and delivery of the compliance program for First Bank System, Inc.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 9, 6/96