Each 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.
EEOC
Update on the EEOC’s Fight Against Separation Agreement Language Allegedly Limiting Employee Rights
As 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
These 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
As 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
The 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
Last 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.
Webinar- Back to School: Employment Law Update
As 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
The EEOC Strikes Again
In a suit filed in February, the Chicago District Office of the Equal Employment Opportunity Commission (EEOC) argued that the separation and release agreements used by CVS Pharmacy were “overly broad, misleading, and unenforceable.” Specifically, the EEOC argued that provisions in CVS’ agreements infringed on employees’ rights to file discrimination charges and participate in EEOC investigations. See our February 2014 post, EEOC Files Suit Over Separation Agreement Language for more details on that case.
Now, a different district office of the EEOC has filed a similar suit against another employer. The Phoenix District Office sued CollegeAmerica Denver on April 30, 2014 alleging that CollegeAmerica violated federal age discrimination laws by including various provisions in its form separation and release agreements impeding employee rights. The EEOC objects to CollegeAmerica’s broad release language, provisions limiting an employee’s ability to assist others with claims, and provisions requiring the employee to represent that he or she has not filed administrative claims or lawsuits.
Separation and release agreement language clearly is a “hot button” issue for the EEOC. Employers should review their form release agreements to ensure that they specifically permit an employee to file charges and participate in investigations by governmental authorities and do not place other impermissible limits on employee rights.
EEOC Files Suit Alleging Attendance Policy Failed to Accommodate Disabled Employees
On Friday, the EEOC filed suit against AutoZone, alleging that the car repair company violated the Americans With Disabilities Act by applying its attendance policy in a way that failed to accommodate certain disability-related absences. This is the EEOC’s fourth disability discrimination case against AutoZone in the last 5 years.
Under AutoZone’s policy, employees received points for absences, with 12 points resulting in termination. According to the EEOC, the policy did not make any allowances for disability-related absences (such as early departures by a diabetic employee who had insulin reactions), which the EEOC has alleged constituted a failure to accommodate.
Employers often — wrongly — assume that the fact that an employee doesn’t qualify for (or has exhausted) FMLA leave means that he can be terminated for his absences. However, if the reason for the absence relates to the employee’s medical condition, it’s critical that the absence be considered under an ADA reasonable accommodation analysis as well.
EEOC and FTC Offer Joint Tips on Use of Employment Background Checks
On Monday, the Federal Trade Commission and the Equal Employment Opportunity Commission issued joint publications offering informal guidance on conducting background checks that comply with the Fair Credit Reporting Act and anti-discrimination laws. The overlapping rules and jurisdiction of these two agencies in this area of the law can sometimes be confusing for employers.
The first brochure, Background Checks: What Employers Need to Know, offers nuts-and-bolts guidance for employers to consider when investigating the backgrounds of applicants and employees for use in hiring, retention, promotion, and reassignment decisions. The publication also reminds employers to review local laws regarding background reports and information because some states and municipalities regulate the use of that information for employment purposes in addition to what federal law requires. The brochure also has many helpful links to other EEOC and FTC guidance in this area.
The second brochure, Background Checks: What Job Applicants and Employees Should Know is geared toward job applicants and employees.
The EEOC press release describes the joint guidance as “a unique opportunity for the agencies to work together to provide user-friendly technical assistance to our stakeholders.” Given that the EEOC has not been particularly successful in the cases it has brought against companies for allegedly using background checks improperly, it is likely that the agency also has decided that getting employers to voluntarily alter their practices by providing additional guidance to them may be a better enforcement strategy.
The Employment Lawyers 