SDNY Holds That Lost Wages Were Not Precluded, and Should Not Be Offset, by Disability Benefits

In Tse v. New York University, No. 10-CV-7207 (DAB), 2016 WL 3281045 (S.D.N.Y. June 6, 2016), the court, per SDNY Judge Batts, held that plaintiff’s receipt of long-term disability and social security disability insurance benefits did not preclude her from receiving back pay or front pay as a matter of law, and that those benefits should not offset her lost wages.

Although defendant cited cases for the “principle that back pay is not available where it is the plaintiff’s disability, rather than the defendant’s discrimination, that causes the alleged harm to plaintiff”, those cases were distinguishable:

[Plaintiff here] argues that she was indeed able to work with reasonable accommodations, and that it was only after NYU stopped providing such accommodations that she became unable to work. Thus, the alleged discrimination – NYU’s failure to provide reasonable accommodation – rather than Dr. Tse’s disability caused her harm. If true, then it would only be through the award of back pay that Dr. Tse could be fully compensated for NYU’s discrimination.

As to the offset issue, the court explained:

[M]any Courts in this Circuit have exercised their discretion to decline to deduct collateral source payments from calculations of back pay. [Citing cases] … This Court sees no reason to depart from this trend, nor any reason why the discretion afforded to judges in the context of offsetting unemployment benefits should not extend to disability benefits. Furthermore, the clear holding of Cleveland [v. Policy Mgmt. Sys. Corp., 526 U.S. 795 (1999)] and its progeny, which permits ADA claims to move forward despite a finding that a plaintiff is disabled and thus eligible for SSDI benefits, would be rendered meaningless if a major source of potential damages, lost wages, were precluded or offset once a plaintiff applied for and received disability benefits. This is especially true in cases like this one, where the Plaintiff asserts that the Defendant demanded that she go on one hundred percent long-term disability rather than providing her with the reasonable accommodations she needed to remain in her job. Offsetting damages awards based on a plaintiff’s receipt of disability benefits in such situations would create more than a windfall to employers; it would enable employers to shift the burden of their discriminatory conduct onto public and private insurance systems created to serve larger public purposes.

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