The War on Sheltered Workshops: Will Ada Title Ii Discrimination Lawsuits Terminate an Employment Option for Adults With Disabilities

JurisdictionUnited States,Federal
Publication year2015
CitationVol. 31 No. 2

The War on Sheltered Workshops: Will ADA Title II Discrimination Lawsuits Terminate an Employment Option for Adults with Disabilities

J. Gardner Armsby

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J. Gardner Armsby*


V.J. Trombley is an adult woman with a developmental disability who lives in the North Country of New York, a region where employment can be scarce.1 But work has not been a problem for V.J., who has worked a job that she loves for the last twenty years.2 V.J. works at Essex Industries alongside others with disabilities, building seats and other parts for canoes sold by retailers such as L.L. Bean.3 In 2011, there were 52,7594 adults with disabilities employed in sheltered workshops, defined as "facility-based day programs attended by adults with disabilities as an alternative to working in the open labor market."5 However, the jobs that have provided gainful employment for V.J. and her coworkers for so many years may soon disappear entirely.6 Though this sounds like the usual story of outsourcing, these jobs are actually under attack by a campaign to eliminate sheltered workshops led by disability rights advocates and the federal government.7

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The National Disability Rights Network (NDRN) issued reports in 2011 and 2012 calling for an end to sheltered workshops under the premise that adults with disabilities are "segregated and exploited."8 NDRN and other opponents call for replacing sheltered workshops with integrated employment options such as supported employment.9 The Civil Rights Division of the United States Department of Justice (DOJ) also favors moving toward supported employment.10 However, supported employment is not a panacea because a substantial percentage of adults with disabilities are not able to maintain competitive employment through supported employment programs.11 A complete elimination of sheltered workshops could have the unintended consequence of leaving many of the 52,75912 adults in sheltered workshops with no work options.

The attack on sheltered workshops has already resulted in some states eliminating or beginning to phase out funding.13 In two

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separate cases, plaintiffs are challenging sheltered workshop placements, alleging discrimination under Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (Rehabilitation Act).14 The DOJ Civil Rights Division is involved in both cases.15

In light of the above mentioned difficulties, this article analyzes the legal challenges against sheltered workshops under Title II of ADA and the Rehabilitation Act, particularly Lane v. Kitzhaber, to determine whether placement in sheltered workshops constitutes discrimination in violation of these statutes. A key consideration is the application of the Supreme Court's interpretation of ADA Title II in Olmstead v. L.C. ex rel. Zimring.16 This article also evaluates whether states' decisions to eliminate funding for sheltered workshops could result in Title II discrimination against individuals not suited for supported employment.


A. Overview of Sheltered Workshops

Sheltered workshops rose to prominence in the United States in the decades following World War II.17 As of 2011 the number of adults in sheltered workshops was an estimated 52,759.18 Individuals may be "patients" under long-term arrangements or they may be short-

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term trainees transitioning into community employment.19 Those employed in sheltered workshops perform relatively simple tasks such as assembling and packaging20 and may receive compensation at rates below minimum wage.21

Proponents offer several arguments in favor of sheltered workshops.22 First, sheltered workshops are safer than outside employment, protecting adults with disabilities against crime and harassment.23 Second, they are also less demanding because they are able "to provide work commensurate with [disabled individuals'] capabilities."24 Proponents cite sheltered workshops' social environment and opportunities for fostering friendships as some of sheltered workshops' most important benefits.25 Other advantages include the sense of structure and routine provided as well as the consistency of providing assistance throughout the week and the individual's life span.26

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Opponents have advanced several arguments against sheltered workshops.27 First, they argue that "[s]egregated work facilitates feelings of isolation."28 Second, opponents argue that sheltered workshops reinforce a life of poverty and reliance on public assistance.29 Third, that sheltered workshops are a "dead end" and fail to lead to successful outcomes.30

B. Applicable Statutes and Case Law

1. Federal Statutes and Regulations Prohibiting Discrimination

ADA's Title II broadly requires that no qualified individual with a disability shall "by reason of such disability" be excluded from the services of a public entity.31 Section 504 of the Rehabilitation Act of 1973 has a provision, nearly identical to the ADA's, prohibiting discrimination on basis of disability with regard to "any program . . . receiving federal financial assistance."32 Although most sheltered workshops are private entities,33 ostensibly exempt from challenge under the ADA, most sheltered workshops are heavily reliant on government funding.34 Thus, the state agencies that administer employment services are susceptible to discrimination

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challenges under ADA Title II as well as Section 504 of the Rehabilitation Act.35

One funding source is Vocational Rehabilitation, a program created by the Rehabilitation Act of 1973.36 Medicaid also provides funding through the Home & Community Based Services (HCBS) waiver for "prevocational . . . and supported employment services" that are not available to an individual through vocational rehabilitation.37

The provisions in ADA Title II and the Rehabilitation Act each have a corresponding regulation requiring the provision of services "in the most integrated setting appropriate."38 The appendix to the ADA's regulations defines this as "a setting that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible" and further requires "persons with disabilities [to] be provided the option of declining to accept a particular accommodation."39

Another ADA regulation requires a public entity to make "reasonable modifications . . . necessary to avoid discrimination on the basis of disability" unless it can demonstrate that "making the modifications would fundamentally alter the nature of the service . . . ."40 The Rehabilitation Act has similar regulations requiring recipients to make "reasonable accommodation," unless the accommodation would impose an "undue hardship" on the program or activity.41

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B. Olmstead And Other Applicable Case Law

In 1999, the Supreme Court addressed Title II of ADA in Olmstead v. L.C. ex rel. Zimring in the context of a state's provision of residential services.42 The plaintiffs in Olmstead were adults with disabilities challenging their confinement in mental hospitals.43 In an opinion by Justice Ginsberg, the Court recognized that such "unjustified institutional isolation" qualifies as discrimination under ADA,44 and states are thus required to provide community-based treatment where: (1) such placement is appropriate for the individual,45 (2) the individual does not oppose such treatment,46 and (3) placement can reasonably be accommodated, taking into account the resources available to the state and the needs of others with mental disabilities.47 A caveat in Justice Ginsberg's opinion emphasized that "nothing in the ADA or its implementing regulations condones termination of institutional settings for persons unable to handle or benefit from community settings."48

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Courts have applied Olmstead to Title II discrimination challenges beyond mental institutions, expanding the scope to include intermediate care facilities and other residential settings.49 In the Olmstead cases, the fundamental inquiry is whether the services are provided in the most integrated setting appropriate.50 A relevant consideration in this determination is "[w]hether [the] particular setting is an institution."51

C. Lane v. Kitzhaber

In Lane v. Kitzhaber, eight individuals with disabilities filed a class action suit against Oregon, alleging they and thousands of others are "unnecessarily segregated in sheltered workshops."52 Plaintiffs' original complaint argued that Oregon violates ADA's Title II and Section 504 of the Rehabilitation Act through its unnecessary segregation of persons in sheltered workshops and failure to provide "an adequate array of integrated . . . and supported employment services."53

In May 2012, the district court in Lane v. Kitzhaber ruled that the ADA and Rehabilitation Act mandates applied to these services and that the risk of institutionalization addressed in Olmstead applies to

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segregation in an employment setting.54 The court, however, granted a motion to dismiss with leave to amend because of a defect in plaintiffs' demand for relief.55 Plaintiffs subsequently filed an amended complaint56 and in August 2012 the judge certified as a class "'all individuals in Oregon with intellectual or developmental disabilities who are in, or who have been referred to, sheltered workshops' and 'who are qualified for supported employment.'"57

Several important developments followed. In March 2013, the DOJ Civil Rights Division filed a motion to intervene on plaintiffs' behalf.58 In April 2013, Oregon Governor John Kitzhaber responded with an executive order that eliminated funding for any new placements in sheltered workshops and committed to increased funding for supported employment services.59 The district court allowed the DOJ to intervene in May 2013.60

In April 2014...

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