Unexpected Back Pay Costs: Appeals Court Sides With Employee in ADA Case

Back pay probably isn’t the first thing that comes to mind when you think of ADA violations, especially if the employee never claimed to have a disability. 

But a recent federal appeals court decision shows how back pay liability can arise from procedural missteps alone.

For finance leaders, it’s a reminder to work closely with HR to make sure compliance processes are followed correctly — since even small missteps can lead to unexpected costs.

Workplace Behavior Triggers Fitness-for-Duty Exam

In 1998, John Nawara started working for the Cook County Sheriff’s Office in Illinois. By 2016, he was serving as a correctional officer.

Nawara didn’t always get along with his work colleagues. He had multiple run-ins with a superior officer and engaged in angry exchanges with an HR manager and an occupational health nurse. These altercations raised concerns, prompting HR to request that he undergo a fitness-for-duty medical examination.

Nawara was placed on paid leave and asked to submit two signed medical authorization forms. However, he refused to comply until he was placed on unpaid leave. He eventually complied in August 2017.

While still on leave, Nawara sued the county under the Americans with Disabilities Act (ADA). He argued that requiring his medical records and a fitness-for-duty exam violated the ADA’s restrictions on medical inquiries and examinations.

After the suit was filed, Nawara underwent the exam, was deemed fit for duty and returned to work in late September 2017.

ADA Violation Found, But No Damages Awarded – at First

After a trial, a jury found the county violated the ADA but awarded no damages. 

Nawara then asked the trial court to award him back pay and restore his seniority.

The trial court restored his seniority but denied back pay, reasoning that Nawara neither had nor was perceived to have a disability.

ADA Back Pay Debate Moves to Appeals Court

Both parties appealed. Nawara sought back pay, while the employer challenged the restoration of his seniority. 

Nawara, supported by an EEOC brief, argued that the violation of ADA’s medical examination provision constitutes discrimination regardless of whether the employee has a disability.

The appeals court agreed. It ruled that an employer’s violation of ADA medical inquiry rules can trigger back pay liability, regardless of whether the employee has an actual or perceived disability. The court also upheld the restoration of Nawara’s seniority and remanded the case for further proceedings to determine appropriate back pay.

Compliance Missteps Can Lead to Unexpected Back Pay

This case highlights a financial blind spot: ADA compliance failures can quietly escalate into budget-impacting payouts.

Violating the ADA’s medical exam rules – even unintentionally – can lead to hidden costs like back pay, legal fees and reinstated benefits. This case wasn’t about overt discrimination but a procedural misstep, and it still resulted in financial liability.

For CFOs, it’s a reminder that compliance risk doesn’t exist in a silo. It can affect payroll liabilities, benefit tracking and forecasting accuracy. Even a single ADA misstep can trigger back pay liabilities and force adjustments to compensation history, seniority-based benefits or planned workforce costs.

Looking Ahead: Action Steps for Finance

To help mitigate financial risk tied to ADA compliance, finance leaders can take the following steps:

• Ensure finance is involved early in compliance decisions that may lead to paid leave, back pay or legal exposure.
• Track and analyze costs tied to compliance issues to understand financial impact and support informed decision-making.
• Incorporate compliance risk into financial planning, as unexpected costs like back pay can impact budgets and reserves.
• Work with HR and legal to ensure medical inquiry and fitness-for-duty policies are compliant with ADA requirements.

Nawara v. Cook County, No. 22-1393 (7th Cir. 4/1/25).