Supreme Court: ADA Does Not Apply to Post-Employment Benefit Changes

When does the Americans with Disabilities Act (ADA) stop offering protection to an employee? According to a recent ruling from the U.S. Supreme Court, that protection ends at retirement—at least under Title I of the ADA, which governs employment practices.

On June 20, 2025, in Stanley v. City of Sanford, Florida, the Court ruled 8–1 that the ADA does not apply to post-employment decisions regarding retiree benefits. This decision provides clarity for employers, especially municipalities and public entities managing long-term disability retirement programs.

The case involved Karyn Stanley, a former firefighter for the City of Sanford who developed Parkinson’s disease while employed. She retired early under the city’s disability retirement plan. Initially, the city provided her with health insurance coverage that would continue indefinitely as part of her retirement package. However, in 2019, the City amended its benefits policy, capping disability-related retiree healthcare benefits at 24 months. As a result, Stanley's health coverage terminated two years after retirement, even though her disability persisted.

Stanley sued under the ADA, arguing that the city's new time limit disproportionately impacted individuals with disabilities and unlawfully discriminated against her by eliminating a benefit that she had received specifically because of her disability. The lower courts dismissed the case, and the Eleventh Circuit affirmed, holding that the ADA's employment protections do not extend to former employees who are no longer engaged in any ongoing employment relationship.

The Supreme Court agreed. Writing for the majority, Justice Gorsuch held that only current employees or job applicants fall within the protections of Title I. Since Stanley had already retired and was not seeking reemployment, she was not a “qualified individual” under the ADA’s definition. The Court acknowledged that while benefit changes might feel unfair to former employees, Congress wrote the ADA to cover employment, not retirement or post-employment benefit decisions.

Justice Sotomayor dissented, arguing that this interpretation limits the ADA’s reach and allows employers to target disabled former employees for disparate treatment. Still, the majority emphasized that such policy questions are best addressed through legislation, not judicial reinterpretation.

This ruling resolves a circuit split on whether retirees can use the ADA to challenge post-employment benefit changes. The Court's decision aligns with rulings from the 6th, 7th, 9th, and 11th Circuits and rejects broader readings by the 2nd and 3rd Circuits.

✅ What Employers Should Know Now:

• Under Stanley, the ADA does not apply to changes made to retiree benefits after employment has ended. Once an employee retires, their ADA Title I protections cease.

• Employers remain bound by the ADA in managing active employee benefits, hiring, termination, and workplace accommodations.

• Changes to retiree healthcare or disability-related benefits may still raise issues under other legal doctrines (e.g., breach of contract, ERISA, or state law), so employers should not view this ruling as a blanket shield against liability.

• Public employers and those with structured disability retirement benefits should review their policies for consistency, fairness, and legal defensibility, and consider communicating clearly with affected retirees.

As AI, automation, and evolving benefit models reshape the workplace, courts will continue to

refine the boundaries of anti-discrimination statutes like the ADA. The Stanley decision confirms that Title I protections end when the employment relationship does; that said, employers still have legal and ethical responsibilities in how they treat their retirees.