In August of this past year, the Equal Employment Opportunity Commission (EEOC) began what many are calling a “crusade” against company wellness programs.
The First Lawsuit
According to the EEOC, Wisconsin-based Orion Energy Systems violated federal law by requiring an employee to submit to medical exams and inquiries that were not job-related and consistent with business necessity as part of a so-called “wellness program,” which was not voluntary, and then by firing the employee when she objected to the program.
In a lawsuit filed on August 20, 2014, the EEOC claimed that Orion instituted a wellness program that required medical examinations and made disability-related inquiries. When an employee declined to participate in the program, Orion shifted responsibility for payment of the entire premium for the employee health benefits from Orion to the employee. Shortly thereafter, Orion fired the employee.
The EEOC maintained that Orion's wellness program violated the Americans with Disabilities Act (ADA) as it was applied to the employee, and that Orion retaliated against the employee because of her good-faith objections to the wellness program. The EEOC further asserted that Orion interfered with the employee's exercise of her federally protected right to not be subjected to unlawful medical exams and disability-related inquiries.
The EEOC brought the suit under Title I of the ADA, which prohibits disability discrimination in employment, after first attempting to reach a pre-litigation settlement through its conciliation process.
The Orion lawsuit is the EEOC's first to directly challenge a wellness program under the ADA.
The Second Lawsuit
Flambeau, Inc., a Wisconsin-based plastics manufacturing company, is alleged to have violated federal law by requiring an employee to submit to medical testing and assessment in connection with a “wellness program” or face dire consequences. That violated the Americans with Disabilities Act the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed on October 1, 2014. The “wellness program” required that employees submit to biometric testing and a “health risk assessment,” or face cancellation of medical insurance, unspecified “disciplinary action” for failing to attend the scheduled testing, and a requirement to pay the full premium in order to stay covered, according to the EEOC.
The EEOC contends that the biometric testing and health risk assessment constituted “disability-related inquiries and medical examinations” that were not job-related and consistent with business necessity as defined by the Americans With Disabilities Act (ADA). These alleged actions and severe consequences for not providing prohibited information as part of its “wellness program” violate Title I of the ADA, which prohibits disability discrimination in employment, including making disability-related inquiries.
The Third Lawsuit
The U.S. Equal Employment Opportunity Commission (EEOC) sued a third employer-sponsored wellness program on October 27, 2014. The EEOC's petition in EEOC v. Honeywell International Inc. originally sought to enjoin Honeywell from implementing its wellness program, charging violations of both the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
Although on Nov. 3 the district court denied the EEOC's request for a temporary restraining order and preliminary injunction, based on a finding that Honeywell's program did not pose “irreparable harm” to participants, the judge did not address the EEOC's likelihood of success in the litigation and the suit is poised to go forward.
Starting in 2015, the biometric testing for Honeywell's employees and their spouses will be part of a screening to help identify health risks. It will include checks for blood pressure, HDL and total cholesterol, nonfasting glucose levels, body mass index (BMI) and waist circumference. Blood will also be screened to determine whether the employee or spouse smokes tobacco. Employees will be penalized (or lose incentives) if they or their spouses do not take the biometric tests, including the blood draw.
Honeywell says its financial incentives fall within the range specified as allowable under the Affordable Care Act (ACA). But the EEOC claims that Honeywell's incentives violate the ADA because employees are penalized in order to induce them to go through medical examinations that are not job-related or consistent with business necessity. Although there is an exception to this rule for “voluntary” health exams, the EEOC claims that these exams are not voluntary because Honeywell imposes a penalty on employees who decline to participate.
Call for Guidance
As these wellness-based lawsuits by the EEOC increase, you can expect greater resistance and more vocal criticism from the Benefits industry about the agency's actions.
And that all stems from a lack of guidance by the EEOC on the specific types of wellness-based activities it considers illegal.
American Benefits Council President James A. Klein summed up the main issue by saying:
“Unfortunately, the EEOC decided to pursue litigation before issuing guidance on this matter. This is very frustrating for employers who care about the well-being of their employees and take seriously their compliance obligations. It is impossible for employers to abide by rules that do not exist.”
Although the EEOC hasn't issued formal guidance on wellness programs, the agency's flurry of lawsuits focus on the idea of “voluntary” wellness programs.
In each of the EEOC suits, the agency alleges the wellness programs aren't truly voluntary either because of “dire consequences” the program imposes on workers who choose not to participate or because of health assessments which are not “job-related and consistent with business necessity” (because they were preventive in nature) and violate the ADA's rules regarding employee medical exams and inquiries.
The employment lawyers at Kingsley & Kingsley will continue to monitor EEOC developments as it issues guidance regarding wellness programs. In the meantime, if you have any questions concerning your rights and employment laws in California, don't hesitate to contact us by calling us toll-free at (888) 500-8469 or by clicking here to contact us via email.