Monthly Archives: October 2014

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.