In the latest Weekly Wright Report:
Fourth Circuit Reminds Employers To Treat Workplace Depression With Care
by Paul Evelius
For employers, it’s often a confounding riddle: how to comply with the ADA when an employee’s diagnosed depression causes performance problems. The issue recently split a three-judge panel of our federal appellate court.
While the case happened to involve the Office of the Director of National Intelligence, or “ODNI,” the scenario is familiar. In March 2011, ODNI hired “Hannah P.” for a five-year stint as an operations analyst. A few months later, Hannah told ODNI that she suffered from depression, but didn’t request any accommodation, instead treating her illness with therapy and medication.
That approach worked well for several years and in late 2013 Hannah was tasked with coordinating ODNI’s response to Edward Snowden’s notorious top-secret-document disclosure. For more than a year, she indisputably performed that high-pressure project superbly, but in the spring of 2015, as that assignment and her five-year term were winding down, Hannah racked up numerous unplanned absences and late arrivals. After several scheduling accommodations apparently failed to resolve her erratic attendance, she took an approved four-week leave of absence in May 2015.
Weeks later, an interview panel recommended Hannah for a permanent cyber-management position she was seeking. But then a senior ODNI officer, apparently aware of both her attendance issues and illness, torpedoed her bid, stating that “her recent performance is not consistent with a potential good employee.”
Hannah sued ODNI, alleging that it violated the ADA by denying her the management position. In her appeal to the Fourth Circuit from a federal district court’s dismissal of her claim, Hannah argued that ODNI could not lawfully deny her the job based on depression-induced attendance problems. In their majority opinion, two judges vetoed that argument, stating that while there was no doubt that Hannah’s struggle with depression caused her attendance problems and they were “sympathetic to the toll this condition took on a highly talented employee,” ODNI was nevertheless permitted to consider those attendance problems in deciding whether to give her the management job. In support, they cited two prior Fourth Circuit decisions for the proposition that the ADA “does not require an employer to simply ignore an employee’s blatant and persistent misconduct, even where that behavior is potentially tied to a medical condition.”
Lest they squeeze too much solace from those words, employers should be aware that, in a passionate dissent, Judge Roger Gregory forcefully criticized the majority’s conclusion, insisting that a jury should decide the case, partly because Hannah’s attendance problems were a far cry from the misconduct involved in those two prior cases.
The Fourth Circuit’s divided opinion signals that slightly different facts could trigger a jury trial and a far different result. Its clearest message is that employers must treat depression with delicacy.
When Opportunity Knocks, Answer The Door – New Opportunity Zones
Well, we have all just gone through our first round of taxes under the new tax laws that were enacted in December 2017, known as the Tax Cuts and Jobs Act (the “Act”). I am sure that we all know someone who was happy, sad and/or mad about the impact of the Act on their personal taxes. But the Act did more than change personal income taxes, it also created “Opportunity Zones.” An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they are a low-income census tract with an individual poverty rate of at least 20 percent and median family income no greater than 80 percent of the area median. Opportunity Zones were created as an economic development tool, designed to spur development and job creation in distressed communities. The plan is to spur economic development by providing tax benefits and incentives to investors.
On April 20, 2019, the Maryland Department of Housing and Community Development held a press conference to identify Maryland’s Opportunity Zones. Secretary Kenneth C. Holt said “The Opportunity Zone program allows Maryland to attract capital to energize the development of communities that have not traditionally seen private sector investment, and they will be a game-changer for Maryland.” Mr. Holt further stated “I’m excited to establish these zones and further leverage private, nonprofit and public sector funds, providing new opportunities for housing, retail and business growth to fuel the state’s economic engine and create jobs.” To see the Maryland Opportunity Zones – click here.
There are three types of incentives available:
- Temporary Deferral: A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.
- Step-Up in Basis: For capital gains reinvested in an Opportunity Fund the basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
- Permanent Exclusion: a permanent exclusion from taxable income of capital gains from sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.
In October 2018, the Treasury Department and the Internal Revenue Service released proposed regulations for Opportunity Zones. To see the 2018 proposed regulations – click here. On April 17, 2019, the Treasury Department issued the latest proposed regulations for Opportunity Zones. To see the 2019 proposed regulations – click here. Perhaps opportunity is knocking on your door in an Opportunity Zone.
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