EEOC

EEOC Issues New Rules for Corporate Wellness Programs

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EEOC LOGOOver the last few years the Equal Employment Opportunity Commission has increasingly taken the position that corporate wellness programs — and in particular, the testing they require, the information they collect, and the benefits they provide — can violate discrimination laws. On Monday, the EEOC issued two final rules establishing the standards under which wellness programs will be reviewed.  (See our previous post regarding the proposed rules here.)

One of the rules specifically applies to Title I of the Americans with Disabilities Act (ADA), while the other applies to Title II of the Genetic Information Nondiscrimination Act (GINA).

The Final ADA Rule. The final ADA rule provides that “wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage.” The rule requires employers to give participating employees notice that tells them “what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential.”

The Final GINA Rule. The final GINA rule provides “that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, the same incentive allowed for the employee… No incentives are allowed in exchange for the current or past health status information of employees’ children or in exchange for specified genetic information … of an employee, an employee’s spouse, and an employee’s children.”

A few notes about the new rules directly from the EEOC:

  • Both rules will be effective beginning on January 1, 2017.
  • Both rules apply to all workplace wellness programs, including programs in which employees or their family members may participate without also enrolling in a particular health plan.
  • Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information to participate in a wellness program or to receive an incentive.
  • Employers should ensure confidentiality by adopting and communicating clear policies, training employees who handle confidential information, encrypting health information, and providing notification to employees and their family members if breaches occur.

In light of these new rules, we suggest that you carefully review your wellness programs and corresponding financial incentives to ensure compliance. Also, note that under existing laws – even before the introduction of these new rules – you cannot:

  • Require employees to participate in a wellness program;
  • Deny health insurance to employees who do not participate in the program;
  • Take any adverse employment action or retaliate against, interfere with, coerce, or intimidate employees who do not participate in the program; or
  • Deny employees with disabilities reasonable accommodations that allow them to participate in a wellness program and receive any related incentives.

 

 

EEOC Provides Guidance on Leave as a Reasonable Accommodation under the ADA

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EEOC LOGOEarlier this week, the Equal Employment Opportunity Commission (EEOC) issued a new resource document on when leave constitutes a reasonable accommodation under the Americans with Disabilities Act (ADA).  Although the EEOC has always taken the position that employer-provided leave can be a reasonable accommodation, the new document highlights some of the standards for when and how leave must be granted.  At its core, the EEOC resource clarifies that unpaid leave is a reasonable accommodation unless the employer can show that the leave causes an undue burden.

The new EEOC document covers the following topics and provides specific examples of each:

  • Equal Access To Leave.  Employees with disabilities must be afforded access to leave on the same basis as all other similarly-situated employees.  In other words, if an employer receives a request for leave from a qualified disabled employee, and the leave would be covered  under the employer’s existing leave policy, the employer must treat the individual the same as an employee who requests leave for reasons unrelated to a disability.  The EEOC notes here that “employers are entitled to have policies that require all employees to provide a doctor’s note or other documentation to substantiate the need for leave,” but employers can’t apply that requirement discriminatorily.
  • Unpaid Leave.  Employers must consider providing unpaid leave as a reasonable accommodation to an employee with a disability if the employee requires it to return to work, as long as the leave would not create an undue hardship on the employer’s operations or finances.  This is required even if: “the employer does not offer leave as an employee benefit; …the employee is not eligible for leave under the employer’s policy; or … the employee has exhausted the leave the employer provides as a benefit …”
  • Interactive Process.  The employer is required to engage in an “interactive process” with the employee once the employee requests leave and the employer determines that the leave is not permitted under another program (such as PTO, FMLA or Worker’s Compensation).  As the EEOC acknowledges, the interactive process will likely continue during the employee’s leave, with the employer checking in on the employee’s progress and/or need for additional leave. When a leave is at issue, the EEOC recommends that the  process focus on the following questions:
    • “the specific reason(s) the employee needs leave …
    • whether the leave will be a block of time…, or intermittent …; and
    • when the need for leave will end
  • Maximum Leave Policies.  Employers may have leave policies that establish a maximum amount of leave allowed, but more time above the maximum would be a reasonable accommodation, unless the employer can show that allowing such leave would cause an undue hardship.
  • Return to Work.  An employer cannot require an employee to be “100% healed or recovered” to return to work — it must provide the employee a reasonable accommodation (including reassignment, for example) as long as the accommodation does not create an undue hardship.  An employer can refuse to allow an employee to come back to work with a medical restrictions only if the employee would pose a “direct threat” of substantial harm to him/her self or to others.
  • Undue Hardship.  When considering whether a leave would cause an undue hardship, the EEOC considers the following factors:
    • “the amount and/or length of leave required…;
    • the frequency of the leave…;
    • whether there is any flexibility with respect to the days on which leave is taken…;
    • whether the need for intermittent leave on specific dates is predictable or unpredictable…;
    • the impact of the employee’s absence on coworkers and on whether specific job duties are being performed in an appropriate and timely manner…; and
    • the impact on the employer’s operations and its ability to serve customers/clients appropriately and in a timely manner, which takes into account, for example, the size of the employer.”

We encourage all employers to read this new EEOC resource document in full.  Although “nothing new” per se, it serves as a great reminder for ADA compliance and offers many specific examples that may be pertinent to your own employee leave issues.

 

 

EEOC Affirms: Sexual Orientation Is Prohibited Under Title VII

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EEOC LOGOThe EEOC has confirmed its position that Title VII prohibits discrimination against employees based on sexual orientation.  The EEOC’s statement followed on its prior determination that Title VII protects individuals against discrimination based on transgender status, gender identity, and an employee’s transitioning between genders. According to the EEOC, sexual orientation bias is “associational discrimination on the basis of sex.” Thus, employees who work for an employer with 15 or more employees can file a charge of sex discrimination with the EEOC if the employee has been discriminated against because of sexual orientation or gender identity or expression.

Notwithstanding the EEOC’s position, there is still no federal law that explicitly protects individuals from employment discrimination based on sexual orientation and gender identity. However, 22 states (including Illinois), Washington, D.C., and Puerto Rico, have state-based employment nondiscrimination laws that cover sexual orientation and/or gender identity that apply to both private and public sector employers.

With so much recent attention, employers should be particularly attentive to issues relating to sexual orientation and gender identity. We suggest updating any employment policies and practices to include prohibitions on discrimination and harassment based on sexual orientation and gender identity to help protect employers against EEOC and state-law challenges.

Reminder: Review Your Record-Keeping Procedures

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laptop-file-cabinet (2)Employment laws regularly include record keeping requirements.  And while these requirements are rarely front and center, they can rear their head and open companies to legal action.  This month the EEOC filed suit in Philadelphia against a nationwide provider of janitorial and facilities management services for failing to maintain records and other information relating to how its employee selection procedures impact equal employment opportunities.

Under Title VII, covered employers must maintain records that disclose the impact that their selection procedures have on employment opportunities of individuals identifiable by race, sex, or ethnic group. In this lawsuit, EEOC claims that the company failed to make and keep records of applicants’ criminal background checks and criminal history assessments, information that they use to make ultimate hiring decisions.  According to the EEOC, these records are necessary to show the impact that the company’s selection procedures have on individuals identifiable by race, sex, or ethnic group.  The EEOC is seeking an injunction requiring the company to make and keep these records.  This case is an important reminder for employers to ensure that they are properly making and keeping the records required by applicable federal, state, and local statutes and regulations.

Given the EEOC’s focus on records regarding criminal history and background checks, companies should also confirm compliance with federal, state and local laws regarding background checks, and how and when they are conducted and used.  As we have previously discussed in this blog, a growing number of state and local governments have enacted “Ban-the-Box” legislation, putting restrictions on when criminal history information may be gathered.  Companies that haven’t recently reviewed policies and procedures relating to retention of employee and applicant information, or that haven’t carefully considered whether their use of background checks is legally compliant, should do so.

EEOC Issues Proposed Regulations on Employer Wellness Programs

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EEOC ImageCan your employees participate in a wellness program through work? Do you offer financial incentives for participating in the program? If so, listen up.

In April, the U.S. Equal Employment Opportunity Commission issued proposed regulations focusing on how the American with Disabilities Act applies to corporate wellness programs. The proposed regulations give some guidance on how to legally use financial incentives to encourage workers to participate in such programs.

Although Title I of the ADA generally prohibits employers from obtaining medical information from employees, it allows employers to give medical examinations to employees and ask about their health if they are part of a voluntary “employee health program.” Before the proposed regulations, the EEOC had not yet determined whether employers could offer financial incentives to encourage employees to participate in such programs or whether offering incentives would make participation involuntary. The new proposed regulations answer these questions — according to the EEOC, employers may offer incentives up to 30% of the cost of the employee-only coverage to employees who participate in a wellness program and/or achieve certain health outcomes.

The proposed regulations (http://www.regulations.gov), in most pertinent part:

  • Define an “employee health program;”
  • Set forth the requirements that must be met for a program to be considered “voluntary;”
  • Detail the 30% of cost incentive limit; and
  • Set forth additional confidentiality requirements of information gathered during participation in wellness programs.

Although these regulations are only proposed and may or may not go into effect as written in the near future, we suggest that you review your wellness programs and corresponding financial incentives in light of the regulations. Please note that under existing laws – even before the introduction of the proposed regulations – you cannot:

  • Require employees to participate in a wellness program;
  • Deny health insurance to employees who do not participate in the program;
  • Take any adverse employment action or retaliate against, interfere with, coerce, or intimidate employees who do not participate in the program; or
  • Deny employees with disabilities reasonable accommodations that allow them to participate in a wellness program and receive any related incentives.

Are You Ready for 2015?

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checkEach year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope that you find this 2015 Labor and Employment Law Checklist a helpful guide to best practices for the year ahead.

2015 Labor and Employment Law Compliance Checklist

Update on the EEOC’s Fight Against Separation Agreement Language Allegedly Limiting Employee Rights

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EEOC LOGOAs we have blogged about before (see related post links below), the EEOC has said one of its priorities is to challenge separation agreements that, in its view, interfere with the ability of employees to file charges with the EEOC or participate in investigations.

On December 2, the EEOC’s efforts in this area took another hit. A Colorado judge tossed out the EEOC’s claims against CollegeAmerica Denver Inc. relating to the company’s separation agreements, although the judge permitted the EEOC’s claims of retaliation to move forward. EEOC v. CollegeAmerica Denver Inc. The court ruled that the EEOC had not made an adequate effort to conciliate the claims relating to the separation agreements.

Earlier this year, a similar case against CVS also was dismissed on other grounds before the court addressed the separation agreement issue. The EEOC recently appealed the CVS decision to the 7th Circuit.

And it’s not just about separation agreements anymore either; in September, the EEOC sued Doherty Enterprises for using pre-employment arbitration agreements that allegedly interfered with the rights of employees to file charges and participate in investigations. EEOC v. Doherty Enterprises Inc.

Though the EEOC hasn’t had much success in court to date, companies should review their separation and arbitration agreements to ensure that they carve out employee rights relating to the EEOC process. Otherwise, they risk ending up in the EEOC’s cross hairs.

EEOC Lawsuits Shine a Spotlight on Wellness Programs

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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

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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

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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.