Beverage Distributors Company pays $ 160,000 to settle EEOC disability suit

The Beverage Distributors Company has reportedly agreed to pay $160,000 to settle a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission. EEOC v. Beverage Distributors Company, LLC, Civil Action No. 11-cv-02557-CMA-CBS.


Michael (Mike) Sungaila was working with Beverage Distributors Company as a driver’s helper for over four years. In the meanwhile, the company decided to eliminate Sungaila and use contract laborers. He then applied for the post of night warehouse associate. The position involved among other things, loading of liquor and kegs of beer into the back of trucks. The position offered to him was subject to a pre-employment medical examination. Subsequent to the examination, Beverage upon learning of Sungaila’s legal blindness withdrew the offer. A case was filed by EEOC on Sungaila’s behalf against Beverage.


Judgment was delivered after a four-day trial in April 2014, when an eight-person Denver jury unanimously awarded the decision in the favor of Sungaila and agreed with EEOC that Beverage intentionally violated the Americans with Disabilities Act (ADA) when it withdrew the offer made to Sungaila because of his impaired eyesight. Initially, $132,347 was awarded in back pay to Sungaila but later reduced since it was believed that he could have mitigated the damages by finding a comparable position.


Later, the jury’s decision was vacated by the U.S. District Court Judge Christine Arguello on the ground that Sungaila could not have mitigated his damages since Beverages failed to prove that any comparable positions were available that he could have carried out. Judge Arguello then ordered that Sungaila should be paid his entire back pay inclusive of the interest on the award and also be compensated for any tax consequence he would suffer due to being paid the judgment in one year. The relief in total amounted to $ 186,295.


The jury verdict was then appealed by Beverage to the U.S. Court of Appeals for the Tenth Circuit, arguing that the direct threat jury instruction was erroneous; evidence presented during the trial paved a way for the jury for not mitigating damages; and, district court breached its discretion in awarding a tax penalty offset.


However, the Tenth Circuit concluded that the district court didn’t err in awarding a tax offset of $ 18,805 and declined to address the mitigation evidence issue. It also ruled that the direct threat instruction failed to completely reflect the standard and remanded the case back to the district court for retrial scheduled to begin in February 2016.


However, prior to the retrial, the parties entered into a settlement in the form of a court-approved public consent decree according to which Beverage agreed to pay $ 160,000 to Sungaila and resolve the case. Beverage shall also conduct ADA training for all its employees and managers on ADA requirements, including limitations on post-offer/pre-employment medical screening and the need to provide reasonable accommodation to qualified individuals with disabilities; revise and distribute its ADA policy and procedures, including those related to providing reasonable accommodations to employees; and report to EEOC if there are any complaints of disability discrimination. The settlement has been approved by the district court and it shall retain the jurisdiction for two years for purposes of compliance.



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