EEOC Lawsuits Shine a Spotlight on Wellness Programs

wellnessThese days, many large employers have some form of wellness program, designed to help their employees address medical and lifestyle issues. Many employers reward employees who participate with discounts on insurance premiums or other incentives. Some “punish” employees who do not participate by, for example, adding surcharges to their premiums.

Two lawsuits filed recently by the Equal Employment Opportunity Commission (EEOC) have raised concerns about wellness programs as they relate to workers’ privacy, voluntary and mandatory participation requirements, and incentive rules under the Americans with Disabilities Act (ADA) that forbids employers from requiring medical exams and making disability-related inquiries.

Last August, the EEOC made history when it filed its first-ever suit alleging that a wellness program violated the ADA. In the suit (EEOC v. Orion Energy Systems, Civil Action 1:14-cv-01019) the EEOC claims Orion Energy Systems, Inc. (a Wisconsin-based company) required employees to take medical exams and allegedly fired a worker when she objected to, and refused to participate in, a wellness program that included a health risk assessment, a medical history questionnaire, and activity on range-of-motion machines. Then, in a lawsuit filed last week against Flambeau, Inc., (also a Wisconsin-based company) (EEOC v. Flambeau, Inc., Civil Action No. 3:13-cv-00638), the EEOC alleged an employee’s insurance coverage was canceled because the company shifted the full cost of his health insurance premium to him after he failed to complete biometric testing and a questionnaire about health risks. You can read more about this suit in the EEOC’s Press Release.

Employers with wellness programs are advised to ensure their programs are voluntary and offer reasonable alternatives for people otherwise unable to participate.

Judge in Chicago Dismisses EEOC Suit Challenging CVS Health’s Severance Agreements

EEOC ImageAs we reported earlier this year (EEOC Files Suit Over Separation Agreement Language), the Chicago District Office of the Equal Employment Opportunity Commission (EEOC) filed suit against CVS Pharmacy alleging that the company’s standard separation and release agreements were “overly broad, misleading, and unenforceable.” Specifically, the EEOC argued that provisions in CVS’s agreements infringed on the employees’ rights to file discrimination charges and participate in EEOC investigations.

On October 7, 2014, U.S. District Court Judge John W. Darrah issued a Memorandum Opinion and Order granting CVS’s Motion for Summary Judgment and dismissing the EEOC’s lawsuit against CVS. Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D.Ill.2014).

Judge Darrah did not rule on the issue of whether the terms and conditions of CVS’s Severance Agreement are enforceable.  He dismissed the lawsuit because the EEOC did not fulfill the administrative prerequisite of attempting to conciliate with CVS before filing the lawsuit.  Nevertheless, in a footnote in the opinion, Judge Darrah indicated that the settlement agreement properly carved out employee rights to participate in EEOC investigations and also indicated that any attempt to restrain such participation would be unenforceable in any event.

It is unfortunate that Judge Darrah did not have an opportunity to squarely address the challenge presented by the EEOC, but the opinion is still a setback for the EEOC in its efforts to invalidate private settlement terms.  The EEOC may appeal the dismissal to the 7th Circuit and we will keep you posted on new developments, including the outcome of a similar case filed by the EEOC in a different district court.

 

EEOC’s Transgender Claims Gain Momentum

EEOC LOGOThe Equal Employment Opportunity Commission (EEOC) made history recently by filing its first lawsuits alleging sex discrimination against transgender individuals.

The EEOC says Michigan-based RG & GR Harris Funeral Homes, Inc. and Florida-based Lakeland Eye Clinic discriminated against two transgender workers when they fired them for not conforming to “the employer’s gender-based expectations,” according to statements from the EEOC. Both complaints were brought under Title VII of the Civil Rights Act of 1964, on a gender-stereotyping theory.

Although the suits are the first of their kind to be filed by the EEOC, transgender individuals have been filing suits under state discrimination laws for several years. Earlier this year President Obama made it illegal for federal contractors to discriminate based on gender identity; however, the EEOC’s position that transgender individuals are protected by Title VII’s gender discrimination provisions is not clear on the face of Title VII and, until now, has not been tested in court.

Abercrombie & Fitch Hijab Case Heading To Supreme Court

HijabLast week, the Supreme Court announced that it will decide whether Abercrombie & Fitch’s refusal to hire a woman wearing a Muslim hijab (that they said conflicted with their dress code), constituted religious discrimination.

The EEOC is appealing the Tenth Circuit Court of Appeals’ ruling that the retailer could not be found liable for discrimination against the job applicant because she didn’t say she needed a religious accommodation during her interview.

The Court will hear arguments next year, and we will keep you posted as the case develops.

New Illinois Laws: Payroll Cards and Protection for Pregnant Employees

Governor Quinn signed two laws in August that impact Illinois employers — one that expands protections for pregnant applicants and employees and one that sets new requirements for payroll debit cards.

First, under amendments to the Illinois Human Rights Act, employers will be required to provide reasonable accommodations to pregnant applicants and employees who request them. Examples of pregnancy accommodations that are listed in the amendment include time-off, more frequent or longer breaks, seating, transfer to a less strenuous position or light duty, acquisition or modification of equipment, job restructuring and assistance with manual labor. Under the amendment, it is the employer’s burden to establish that the accommodation would be an undue hardship. Also important, the amendment expands the prohibition on pregnancy discrimination so that it will apply to any employer with one or more employees (rather than only those with 15 or more employees) and prohibits employers from requiring pregnant employees to use an accommodation they didn’t request. Finally, the amendment requires employers to post a notice regarding pregnancy accommodation rights. These new provisions take effect on January 1, 2015.

Second, under an amendment to the Illinois Wage Payment and Collection Act, employers are explicitly permitted use payroll debit cards – often termed “paycards” – but must meet certain requirements. The requirements for paycards set out in the amendment include clearly communicating in writing that use of the paycard is voluntary, obtaining the employee’s voluntary written or electronic consent to use a paycard, providing at least one alternative method of payment to employees, providing employees with an itemized list of paycard fees, and providing employees with a way to obtain all of their wages without fees (and a description of how to do so). The amendment also prohibits paycards that assess certain fees or are linked to any form of credit. These new paycard provisions take effect on January 1, 2015. Employers that use paycards should carefully review the terms of their current paycards to ensure they meet the new Illinois standards and prepare the documents required by the amendment so that they may be issued before year end.

Webinar- Back to School: Employment Law Update

school-suppliesAs fall approaches and students head back to school, The Employment Lawyers are taking a look back and a look ahead at issues in labor and employment law. Join us for an informational webinar to review developments over the past year and discuss tips to keep your workplace practices current in the coming year.

Tuesday, September 9, 2014
12:00 pm – 1:30 pm (CDT)
CLICK HERE TO REGISTER

TOPICS

• Supreme Court developments, including the important decisions in Noel Canning and Hobby Lobby
• The EEOC’s new challenges to release agreements and steps you should take to ensure enforceability
• What Illinois and New Jersey employers need to know about new laws limiting questions about an applicant’s criminal record
• Developments under the Americans with Disabilities Act, including working at a home as a reasonable accommodation
• New guidance on how far employers need to go in accommodating religious beliefs and practices
• The Supreme Court and IRS weigh in on taxability of severance payments and health insurance reimbursements
• What to expect from the DOL’s fresh look at overtime requirements
• Continued rollout of the Affordable Care Act in the coming year
• Key changes to requirements for federal contractors

And more…

CLE Credit Available | This program has been submitted to the HR Certification Institute for review.

QUESTIONS

Contact Annie Darmofal at 312.476.7626 or adarmofal@lplegal.com

Illinois Joins Push to “Ban the Box”

btbEffective January 1, 2015, most Illinois employment agencies and private employers will be prohibited from asking about applicants’ criminal background until the applicant reaches the interview stage of the hiring process, or, if there is no interview, until the applicant has been given a conditional offer of employment.  The Job Opportunities for Qualified Applicants Act (House Bill 5701) provides very limited exceptions.  For most Illinois employers, the Act will require changes to the application process.

The Illinois Job Opportunities for Qualified Applicants Act is the latest in a surge of “Ban the Box” legislation around the country.   Illinois becomes the 5th state to enact such “Ban the Box” legislation that covers private employers, joining Hawaii, Massachusetts, Minnesota and Rhode Island.  Seven cities (Baltimore, Buffalo, Newark, Philadelphia, Rochester, Seattle, San Francisco) also have similar provisions.  

Illinois employers and employment agencies should review application materials to remove questions about criminal history by the end of the year.

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