SAN FRANCISCO—An employer can order a fitness-for-duty exam when a worker’s emotional stability is in question, even when job performance has not been affected, a federal appellate court ruled.

The plaintiff in Tuesday’s ruling in Oscar J. Brownfield vs. City of Yakima by the 9th U.S. Circuit of Appeals in San Francisco was a Yakima, Wash., police officer who had “repeatedly exhibited emotionally volatile behavior,” according to the decision.

Incidents cited in the decision included repeated complaints about a fellow police officer, a disruptive argument with another officer; a domestic violence call from Mr. Brownfield’s estranged wife and a report he made comments including, “It’s not important how this ends.” He was terminated by the city from his position in April 2007 after he refused to cooperate in a fitness-for-duty exam.

Mr. Brownfield sued the city, charging the city violated the Americans with Disabilities Act on the basis that an employer may not require a fitness-for-duty exam to determine whether an employee is disabled unless it is “consistent with business necessity.” Mr. Brownfield contended the business necessity standard cannot be met without showing that an employer’s job performance has suffered as a result of health problems.

The 9th Circuit said it agrees with other courts “that prophylactic psychological examinations can sometimes satisfy the business necessity standard, particularly when the employer is engaged in dangerous work. However, we must be keen to guard against the potential for employer abuse of such exams.”

The court said its consideration of the fitness-for-duty exam’s legitimacy in this case “is heavily colored by the nature of Brownfield’s employment. Police officers are likely to encounter extremely stressful and dangerous situations during the course of their work…When a police department has good reason to doubt an officer’s ability to respond to these situations in an appropriate manner (a fitness-for-duty exam) is consistent with the ADA,” said a three-judge panel, in upholding a lower court’s ruling.

The opinion also upheld the lower court’s ruling dismissing Mr. Brownfield’s claims of violation of the Family & Medical Leave Act and for First Amendment retaliation.

Commenting on the decision, employment attorney Dennis Westlind, a partner with Stoel Rives L.L.P. in Portland, Ore., said until now, it has been unclear whether employers can send workers for fitness-for-duty exams when there were questions about the worker’s emotional stability, but job performance had not been affected. “This case gives employers some leeway to do that if an employee’s erratic behavior may indicate they might be unfit for duty,” Mr. Westlind said.