When a Leave Vendor Fails, the Employer Still Pays

Butterball will pay $230,000 to settle a federal disability discrimination lawsuit after the EEOC found the poultry processor fired a long-term employee for attendance violations that were actually unapproved cancer-treatment leave, because the company’s third-party benefits administrator never processed her accommodation request.

According to the EEOC’s lawsuit, the employee told Butterball about her cancer diagnosis and her need for intermittent leave for chemotherapy. The company routed the request to its outside benefits administrator, but the leave was never granted. She accumulated attendance points for the cancer-related absences and was fired for violating Butterball’s attendance policy. The case, filed in the U.S. District Court for the Eastern District of North Carolina, was resolved through a two-year consent decree.

“An employer cannot delegate its responsibility for complying with the ADA,” said Melinda C. Dugas, regional attorney for the EEOC’s Charlotte District.

The settlement’s terms are as instructive as the violation. Beyond the payment, Butterball must designate an internal liaison to help employees navigate third-party leave requests, translate its leave policies into English, Spanish, and Haitian Creole, and train HR and benefits staff on ADA obligations directly, rather than treating the vendor relationship as a compliance handoff.

The original insight for HR leaders: outsourcing leave administration does not outsource legal liability. As more employers route ADA and FMLA requests through third-party administrators and leave-management software to cut headcount, this case sets a marker that the employer, not the vendor, owns the outcome when a request falls through the cracks. A vendor contract is not a compliance shield, and HR teams that have not audited how their leave administrator actually processes accommodation requests are carrying risk they may not know about.

Source: U.S. Equal Employment Opportunity Commission