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The EEOC and Wagner Equipment $200K Deal could close a federal disability discrimination lawsuit alleging that a Colorado heavy machinery dealer fired an employee after knee surgery instead of allowing her to return to work with a reasonable accommodation.

Wagner Equipment Co. has agreed to pay $200,000 to settle the allegations brought by the U.S. Equal Employment Opportunity Commission on behalf of former employee Michelle Nixon. Under a proposed consent decree submitted Thursday in Colorado federal court, the company would provide Nixon with back pay and compensatory damages, issue a letter of apology and offer to rehire her as a painter.

The proposed agreement also requires changes to company policies, employee training and fitness-for-duty procedures. The EEOC and Wagner have asked the court to approve the decree, which would resolve the lawsuit brought under the Americans with Disabilities Act.

Settlement Requires Policy Changes and Mandatory Training

The proposed resolution extends beyond financial compensation, placing Wagner's workplace practices under scrutiny. The agreement requires the company to review its employment policies to ensure they prohibit disability discrimination and retaliation and clearly explain how workers can request and receive reasonable accommodations.

Wagner must also ensure that fitness-for-duty examinations measure employees against their actual job responsibilities rather than imposing requirements unrelated to their work.

Under the decree, employees and job applicants must be allowed to request accommodations during fitness testing. The company also agreed not to disqualify workers solely on the basis of test results without conducting an individualized evaluation.

Employees, Managers and HR Staff Face Different Training Requirements

The settlement outlines a tiered training program designed to reinforce disability protections across the company.

Wagner must provide at least one hour of Americans with Disabilities Act training to all employees. Managers and supervisors must receive three hours of instruction, while human resources personnel must complete four hours.

The sessions will address disability discrimination, employees' rights to reasonable accommodations, company policies and related workplace obligations.

These requirements aim to ensure that decisions about an employee's ability to work account for individual circumstances instead of allowing a single test result to dictate someone's employment future.

Knee Surgery Led to Dispute Over Return to Work

According to the EEOC's Sept. 28 complaint, Nixon joined Wagner's Grand Junction, Colorado, location in February 2011, working as a painter.

Her employment took a difficult turn in May 2021, when she fell and injured her knee. The injury required medical leave and surgery, according to the commission.

Nixon received clearance to return to work in November 2021. However, Wagner required her to pass a fitness-for-duty examination, a procedure the company required of new hires and employees returning after an injury or illness.

During the examination, Nixon declined to lift a 100-pound sack because she believed the task could reinjure her knee. She also told the examiner that heavy lifting was not part of her regular duties as a painter, the complaint said.

The examiner recommended that Nixon return to her painting position with a 50-pound lifting restriction. But her supervisors allegedly refused to let her resume the job.

Warehouse Position Came With a Pay Cut

The EEOC alleged that Wagner subsequently told Nixon she would be fired in early December 2021 unless she applied for long-term disability benefits, with the possibility of taking the fitness test again, or secured a different position.

The company offered her a warehouse job that paid less than her painting position. However, that role also required heavy lifting, which Nixon believed could put her recovering knee at risk.

After she failed to complete the fitness test for the warehouse position, Wagner terminated her employment, according to the commission.

The lawsuit centers on whether the company should have considered an accommodation that would have allowed Nixon to continue working, rather than denying her return based on the physical testing requirements.

The proposed settlement would provide a financial remedy while requiring Wagner to revise the policies governing similar situations in the future.

Colorado Machinery Dealer Faces Federal Scrutiny

Headquartered in Aurora, Colorado, Wagner Equipment sells and rents heavy machinery, including excavators, compactors, bulldozers, trucks and other equipment. Its products serve industries such as construction, mining, waste handling, paving and forestry.

The EEOC is represented by agency attorney Lauren Duke. Wagner Equipment is represented by Ryan P. Lessmann of Jackson Lewis PC.

An EEOC spokesperson declined to comment Friday. Representatives for Wagner Equipment did not immediately respond to requests for comment.

The proposed EEOC and Wagner Equipment $200K Deal now awaits the court's approval. If approved, it would resolve the allegations against the company while establishing requirements for accommodations, fitness testing and disability-related training.

For Nixon, the agreement includes compensation, an apology and an offer to return to her former role. For Wagner, it would require a broader reassessment of how the company evaluates workers recovering from injuries and determines whether they can safely perform their jobs.