How would your adult residential care (ARC) facility’s employment practices stand up to scrutiny? Claims of discrimination can lead to pricey legal battles that threaten both your reputation and your bottom line. In this article, we share details about three recent suits, two involving disability discrimination and one involving pregnancy discrimination. Get the facts so you can take steps to prevent similar situations.
Three ARC Facility Discrimination Lawsuits
So far in 2025, there have been at least three notable jury awards and settlements against adult residential care facilities in cases involving claims of discrimination.
- A federal jury awarded $405,083 to a veteran who filed a disability discrimination lawsuit against a senior living facility. According to Insurance Journal, the veteran disclosed during the application process that she was a veteran with PTSD and that she took medicine to treat the condition. She then took the required drug test and tried repeatedly to provide proof that her medications were legally prescribed, but the facility revoked her job offer.
- An assisted living facility in Minnesota has agreed to pay $73,000 to settle a pregnancy discrimination and retaliation lawsuit. Insurance Journal reports that the facility promoted a female employee, but, after learning that she was pregnant, the manager threated to demote her and began excessive scrutiny of her work. The employee filed a discrimination charge with the EEOC, after which the manager provided negative performance reviews and eventually forced her to quit.
- A Michigan company that provides all-inclusive care for the elderly has agreed to pay $170,000 to settle a disability discrimination lawsuit. According to Insurance Journal, if employees were unable to return to work after FMLA leave ended, they were considered to have given voluntary resignation under company policy. This policy resulted in the termination of two employees who requested extensions of three weeks or less. Replacements were hired, but not until after the employees would have returned to work had they been granted the extension.
The Takeaway for Adult Residential Care Facilities
People often think that employment practices lawsuits involve racial discrimination and sexual harassment. However, race and sex aren’t the only protected classes. Under federal EEOC laws, it’s illegal to discriminate based on:
- Race
- Color
- Religion
- Sex
- Pregnancy
- Sexual Orientation
- Transgender Status
- National Origin
- Age (40 or older)
- Disability
- Genetic Information
As recent lawsuits show, cases involving disability and pregnancy are often complicated because both may impact a person’s ability to perform his or her job effectively. However, the Americans with Disabilities Act requires employers to provide reasonable accommodations to give applicants and employees an equal opportunity to do a job successfully.
According to the EEOC, a reasonable accommodation is any change or adjustment to a job or work environment that permits a qualified applicant or employee to apply for a job, perform a job, or enjoy the benefits and privileges of employment. These accommodations can include part-time or modified work schedules, reassignment, or modifying equipment or devices.
Employers must provide reasonable accommodation for known physical and mental limitations of qualified individuals unless doing so would be an undue hardship. If the accommodation won’t be prohibitively difficult or expensive, employers need to provide it.
Policies and Management Must Be in Line with Anti-Discrimination Laws
Employment practices violations may occur under three types of circumstances. When:
- Company policies are not in line with anti-discrimination laws and managers follow these policies.
- There are no relevant company policies to guide managers and, lacking such guidance, some managers make employment decisions that violate anti-discrimination laws.
- Company policies are in line with federal and state anti-discrimination laws but managers do not follow these policies, possibly because they are unaware of them or their importance.
To guard against such scenarios, adult residential care facilities need two things. First, they need policies that are compliant with all relevant state and federal laws. Since these laws are subject to change, it’s important to review the policies periodically.
Second, they need to train managers on the policies and underlying anti-discrimination laws. If a sticky situation arises and it’s unclear how the law applies, managers should consider consulting with legal counsel before making any employment decisions.
One more thing: it’s important to have employment practices liability coverage. Even if you follow the letter of the law, there’s no guarantee that you won’t face a lawsuit. Tangram provides adult residential care insurance through the Personal Care & Assisted Living Insurance Center (PCALIC). Learn more.
This Article is brought to you by Tangram Insurance Services.
