The Preclusive Effect of Benefits-Related Admissions on Discrimination Claims is (and should be) the Same for ADA and NJLAD Handicap Claims


Plaintiffs who pursue disability or handicap discrimination claims against their employers frequently apply for disability benefits through Social Security or private insurance. The standards for recovery in the discrimination and benefits contexts, however, can and often do conflict. To prevail in a disability or handicap discrimination lawsuit, an individual must demonstrate, among other things, that he or she can perform the job's essential functions, at least with reasonable accommodation. Applicants for disability benefits, by contrast, must typically affirm that they are "totally disabled" and thus unable to work.

In Cleveland v. Policy Management Services,1 the Supreme Court announced the standard (discussed below) for addressing these inconsistent positions in the context of a claim brought under the Americans with Disabilities Act (ADA). Although courts have treated the ADA and the New Jersey Law Against Discrimination (NJLAD) differently in certain circumstances,2 the ADA and NJLAD should not be treated differently in this context. In other words, Cleveland's standard should be applied in all instances where statements made in pursuit of disability benefits conflict with the essential elements of ADA and/or NJLAD handicap discrimination claims.


Before Cleveland, the courts were divided as to how to handle lawsuits involving these apparent contradictory positions. For example, some courts held that the affirmation of total disability in the benefits context created a presumption that the plaintiff could not pursue a discrimination claim, or that the plaintiff was judicially estopped from doing so, while other courts simply ignored the inconsistent positions and permitted the discrimination claim to proceed without reference to admissions made in the benefits context.

In Cleveland, the Supreme Court ruled, in the context of a claim brought under the ADA, that the receipt or application for private disability benefits did not automatically estop a plaintiff from pursuing a disability discrimination claim, and that the law does not create a strong presumption against the recipient's potential success under the ADA. That notwithstanding, however, the Court admonished that the plaintiff must still be able to explain that the disability benefits contention is consistent with the ADA claim that he or she could "perform the essential functions" of the job, at least with "reasonable accommodation."

As is fully explained in the analysis below of Cleveland and those opinions which followed it in the Third Circuit, District Court of New Jersey and Appellate Division, the standard announced by Cleveland in the ADA context has been appropriately followed in the NJLAD context.3 Although the precise language of the federal and state statutes differ in some respects, they are identical with respect to the critical language at issue here. Specifically, both the ADA and NJLAD protect employees who are capable of performing their jobs "with reasonable accommodation." If an employee cannot meet this requirement — in other words if the disability or handicap is so debilitating that the individual cannot perform the job's essential functions even with a reasonable accommodation — then the termination of that individual's employment does not amount to discrimination under either Title VII or the NJLAD. Given these similarities, it should not be surprising that courts have applied Cleveland's standard for Title VII disability discrimination claims to NJLAD handicap discrimination claims.

Additional language from the NJLAD makes this result even more compelling. Specifically, N.J.S.A. 10:5-4.1 provides that it is an unlawful employment practice, or unlawful discrimination, for an employer to discharge a person because he or she is handicapped "unless the nature and extent of the handicap reasonably precludes the performance of a particular employment." (emphasis added). Similarly, N.J.S.A. 10:5-29.1 provides "unless it can be clearly shown that a person's handicap?...would prevent such person from performing a particular job, it is an unlawful employment practice to deny to an otherwise qualified handicapped person the opportunity to obtain or maintain employment, or to advance in position in his job, solely because such person is handicapped?..." (emphasis added).

As a result, it could hardly be clearer that the NJLAD, like the ADA, requires that claimants provide a reasonable explanation for their inconsistent statements in the benefits context before they can pursue discrimination claims.

Cleveland v. Policy Management Services

On January 7, 1994, Carolyn Cleveland suffered a stroke, which damaged her concentration, memory and language skills. Thereafter, she filed an application for social security disability insurance (SSDI) in which she stated that she was "disabled" and "unable to work." Approximately two months later, her condition improved and she returned to work. The Social Security Administration (SSA) therefore denied the original SSDI application.

Three months after returning to work, the company terminated Cleveland because she "could no longer do the job" in light of her "condition." Cleveland, therefore, asked the SSA to reconsider its earlier decision denying her SSDI benefits application. To support that request, she set forth that "I was terminated due to my condition and I have not been able to work since. I continue to be disabled." The SSA ultimately awarded the plaintiff's claim for SSDI benefits retroactive to the day of her stroke, January 7, 1994.

While her claim for SSDI benefits was pending, Cleveland brought an ADA lawsuit. The company moved for summary judgment, which was granted by the district court. It ruled that by applying for and receiving SSDI benefits, the plaintiff had conceded that she was totally disabled. And that fact stopped her from proving an essential element of her ADA claim, namely that she could "perform the essential functions" of her job, at least with "reasonable accommodation."

The plaintiff appealed, and the Fifth Circuit affirmed the district court's grant of summary judgment, but for different reasons. The court ruled that the application for and receipt of Social Security Disability benefits creates a rebuttable presumption that the claimant or recipient of such benefits is judicially estopped from asserting that he or she is a qualified individual with a disability. The Fifth Circuit then ruled that Cleveland could not overcome that rebuttable presumption. Cleveland appealed, the Supreme Court granted certiorari and, ultimately, reversed.

In reaching its decision, the Court cited five factors supporting the position that claims for SSDI benefits and claims to recover for disability discrimination under the ADA can co-exist.4

First, the Court compared the text of the ADA with that of the SSDI The SSDI program provides benefits to a person with a disability so severe that he or she is "unable to do [his or her] previous work" and cannot?...engage in any other kind of substantial, gainful work which exists in the national economy."5 Individuals who pursue disability discrimination claims under the ADA, by contrast, must demonstrate that they could "perform the essential functions" of the job, at least "with?...reasonable accommodation.6 Despite the appearance of a conflict that arises from the language of the two statutes, the Supreme Court reasoned that the SSA, unlike the ADA, does not take the possibility of "reasonable accommodation into account when it determines whether an individual is disabled for SSDI purposes. Moreover, the individual applying for SSDI benefits need not even refer to the possibility of reasonable accommodation.

The result is that an ADA suit claiming that the plaintiff can perform her job with reasonable accommodation may well prove consistent with a SSDI claim that a plaintiff could not perform her job (or other jobs) without it.7

Second, the SSA's administration of SSDI applications follows a somewhat rigid five-step procedure. That procedure can result in an individual qualifying for SSDI benefits under the SSA's administrative rules and, yet, due to special individual circumstances, the individual will remain capable of "performing the essential functions" of his or her job.8

Third, the SSA sometimes grants SSDI benefits to individuals who not only can work, but are working. For example, to facilitate a disabled person's reentry into the workforce, the SSA authorizes a nine-month trial work period during which the SSDI recipient may receive full benefits.9

Fourth, improvement in a totally disabled person's physical condition, while permitting that person to work, will not necessarily or immediately lead the SSA to terminate SSDI benefits.10

Finally, if an individual has merely applied for, but has not been awarded, SSDI benefits, any inconsistency in the theory of the claims is of the sort normally tolerated by our legal system.11

In light of the foregoing, the Court would not rule that individuals who apply for and receive SSDI benefits would be judically estopped from pursuing ADA claims, nor would it rule that a special legal presumption permitting someone who received SSDI benefits to bring an ADA suit only in limited and highly unusual set of circumstances. Nonetheless, the Court admonished that an ADA plaintiff cannot simply ignore the apparent contradiction that arises out of an earlier SSDI total disability claim. Rather, that plaintiff must proffer a sufficient explanation for the inconsistency in the two positions.12

In applying the standard to the facts before it, the Court ruled that the plaintiff had sufficiently explained the consistency of her positions. Specifically, Cleveland explained that the statements in her SSDI benefits application were accurate at the time they were made. Her condition subsequently improved and, at the time she asserted her ADA claim, she could perform the job's essential functions with reasonable accommodation.

Since the Cleveland opinion, the Third Circuit, District Court of New Jersey and, in an unpublished opinion, the Appellate Division of the Superior of New Jersey, have consistently held that the standard created by Cleveland for disability discrimination claims brought under the ADA apply with equal force to claims of handicap discrimination brought under the NJLAD.13

Motley v. New Jersey State Police

In this case, the Third Circuit addressed claims of disability and handicap discrimination under the ADA and NJLAD, respectively, for a person who was denied a promotion because he could not pass a physical examination after suffering injury.

Motley was seriously injured in an accident while on duty with the State Police. As a result of the injuries he sustained, Motley was placed on temporary limited duty status, and he did not participate in the annual physical examination, which he was required to pass to obtain a promotion. Sometime thereafter, Motley applied for an accidental disability pension. In that application, he declared that he was qualified for the enhanced disability pension benefits because he was "permanently and totally incapacitated" as a result of his accident. The medical board who reviewed his application concurred and found that Motley was permanently and totally incapacitated. The State Police did not challenge this determination. Motley's application for an accidental disability retirement pension was subsequently granted, and he continued to receive monthly disability payments.

The State Police moved for summary judgment, arguing that Motley's prior assertion that he was totally and permanently disabled judicially estopped him from suing under the ADA and NJLAD because he could not demonstrate that he was otherwise qualified for the job. The district court agreed, and granted the summary judgment motion. The plaintiff appealed, and the Third Circuit affirmed the summary judgment opinion, but for different reasons.

In analyzing the motion, the Third Circuit followed the precedent of the Supreme Court in Cleveland. It ruled that Motley's statements in his disability benefits application and those to support his lawsuit were inconsistent and, more importantly, that Motley had failed to explain that apparent inconsistency. In reaching this conclusion, the court paid particular attention to the detailed description Motley offered of his injuries and their impact on his ability to work. In particular, Motley averred that he was "permanently and totally disabled" as a result of the accident. He claimed that he had sustained several debilitating injuries, including "extremely painful and recurring headaches" and "intense back pain" when he sat for certain periods of time. He further added that he had difficulty sleeping more than two to three hours because of the back pain, and that he had "extreme pain" in his knee and could not stand on it without pain. He further claimed to have "extreme difficulty with running." Moreover, to receive the disability pension, Motley had to undergo an examination by a medical board, which concurred with his assertion that he was totally and permanently incapacitated for State Police duties.

In light of these injuries, it was Motley's responsibility to offer a reasonable explanation for his inconsistent statements in his disability benefits application and that in the present law-suit. The court ruled that Motley's explanation — that the statutory schemes under the disability benefits application and disability/handicap discrimination laws were different — was insufficient. The court noted that Motley failed to bring any additional reasons for his conflicting positions.14

The District Court of New Jersey has followed the lead of the Third Circuit in Motley and the Supreme Court in Cleveland. Indeed, the district court reasserted judicial estoppel as a viable remedy to combat mutually inconsistent statements.

Lincoln v. Momentum Systems Ltd.

In Lincoln v. Momentum Systems Ltd.,15 the plaintiff, Lincoln, was a sales representative who suffered a stroke in June 1997 which left him with residual problems with his enunciation and in his mobility. His condition forced him to take a medical leave. After five months, the company concluded that it could no longer hold Lincoln's job open, and that it must hire a replacement. In the interim, Lincoln had applied for long-term disability benefits with his private insurer. The doctor's form which accompanied that application for long-term disability benefits indicated that Lincoln was "totally disabled" with no estimated return to work date.

The court ruled that under the circumstances presented, the plaintiff was judicially estopped from pursuing his ADA and NJLAD claims of disability and handicap discrimination, respectively. The court found that the plaintiff had made inconsistent statements that simply could not co-exist. The court noted that judicial estoppel remained a viable remedy under Cleveland, and that it was an effective means of preserving judicial integrity.

In reaching this conclusion, the court took particular note of the plaintiff's vigorous pursuit of his application for disability benefits. It noted that the plaintiff "quite actively and knowingly pursued long-term disability benefits well after the lawsuit had been initiated." The court contrasted that with the plaintiff's statement during deposition that his doctor had cleared him in mid-1998 to return to work without condition. The court was skeptical as to whether the "plaintiff was really ready to perform the essential functions of his job in early 1998. If he had been capable of performing the job in 1998, then why did he continue to pursue long-term disability benefits which, by definition, required him to be totally disabled and not able to perform the functions of his job?" In light of the unreconcilable contradiction in his statement, the district court ruled that the plaintiff was judicially estopped from pursuing his discrimination claims, under either the NJLAD or ADA.

Notably, the court did not even discuss the possibility that the NJLAD handicap discrimination claim should be analyzed differently than the ADA claim. In essence, the court assumed that there was no difference between the federal and state statutes. And given the identical language of the statue with respect to requiring job performance "with reasonable accommodation," that assumption was (and is) correct. The Appellate Division reached the same conclusion a few months later, which is briefly discussed below.

Barrueto v. The Club at Woodbridge Racket and Fitness Center

In Barrueto v. The Club at Woodbridge Racket and Fitness Center, the Appellate Division, in an unpublished opinion, addressed a similar lawsuit. Barrueto was injured during a physical altercation he had with a coworker. As a result of his injuries, he missed approximately two months of work. After he returned to work, the company deemed his performance unacceptable, and he was terminated. Thereafter, Barrueto filed an employee claim petition with the Division of Workers' Compensation which set forth that "[s]ince the assault I have been totally disabled and unable to work because of multiple injuries to my ribs, back, head and legs and I have been under the care of [a physician]". The plaintiff's treating physician also confirmed that the plaintiff was unable to work. During the lawsuit, however, the plaintiff signed a certification setting forth that the information contained in his earlier petition concerning his total disability was incorrect.

The court rejected the arguments advanced by the plaintiff. It ruled that he could not satisfy his prima facie case because the evidence plainly established that he was simply unable to do the work assigned to him, which he had performed prior to the assault. Because he was incapable of performing the essential functions of the job, he could not satisfy an essential element of his prima facie case.

Like the Lincoln court, the Appellate Division did not even address the argument that NJLAD handicap discrimination claims should be analyzed differently than ADA discrimination claims. The Appellate Division's silence on this issue clearly signals its agreement with federal courts that NJLAD handicap discrimination claims and ADA discrimination claims should be analyzed in the same manner.


The admissions made by plaintiffs in the benefits context either on applications or in connection with the continued receipt of benefit payments have and should continue to receive the same treatment under federal and state law. The identical standards of the ADA and NJLAD requiring the plaintiff to show that he or she can perform the job's essential functions "with reasonable accommodation" warrants the same analysis. Accordingly, if a plaintiff proffers that he or she is unable to work in connection with the pursuit of disability benefits, then that individual should be required to explain how that position is consistent with his or her pursuit of a disability or handicap discrimination claim.


1 526 U.S. 795 (1996).

2 See e.g., Olson v. General Electric Astrospace, 101 F.3d 947 (3d Cir. 1996) (distinguishing the definitions of "handicap" under the NJLAD and "disability" under the ADA).

3 See Motley v. New Jersey State Police, 196 F.3d 160 (3d Cir. 1999); Lincoln v. Momentum Systems Ltd., 86 F. Supp. 2d 421 (D.N.J. 2000); Barrueto v. The Club at Woodbridge Racket and Fitness Center, et al., Docket No. A-I 711-98TI, June 9, 2000.

4 526 U.S. at 302-3

5 42 U.S.C. § 423(d)(2)(A).

6 42 U.S.C. § 12111(8).

7 Id. At 803.

8 Id. At 804.

9 See, 32 U.S.C. § 422(c), 423(e)(1). See also, 20 C.F.R. § 404.1592(a) (benefits available for an additional 15-month period dependent upon earnings).

10 Id. at 805.

11 Id.

12 Id. at 801-3.

13 See Motley v. New Jersey State Police, 196 F3d 160 (3d Cir. 1999); Lincoln v. Momentum Systems Ltd., 86 F. Supp. 2d 421 (D. N.J. 2000); Barrueto v. The Club at Woodbridge Racket and Fitness Center, et. al., Docket No. A-1711-98T1, June 9, 2000.

14 196 F.3d at 166.

15 86 F. Supp. 2d 421 (D.N.J. 2000).

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This article was previously published in the Vol. 24, No. 2, Spring 2001, of the Labor and Employment Law Quarterly, a publication of the New Jersey State Bar Association, and is reprinted here with permission.