Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...
Aug. 22 — A Wisconsin energy company violated the Americans with Disabilities Act by financially penalizing and then firing an employee because she declined to participate in a company wellness program, the Equal Employment Opportunity Commission alleged in a lawsuit filed Aug. 20 that marks its first direct ADA challenge to such a program.
Wellness programs have become a popular means for employers to try to control health-care costs, and the Affordable Care Act lets employers offer financial incentives for participation.
The EEOC in May 2013 held a public meeting on wellness programs and their potential infringement of employee protections under the ADA, the Genetic Information Nondiscrimination Act, and other federal anti-discrimination laws.
Responding to calls from employers and other stakeholders for clearer guidance, the EEOC said in its latest regulatory agenda that it's currently working to develop a proposed rule that would address the ADA's effect on wellness programs.
In its lawsuit against Orion Energy Systems Inc., filed in the U.S. District Court for the Eastern District of Wisconsin, the EEOC alleged Orion penalized Wendy Schobert in 2009 after she declined to participate in the company's wellness program by requiring her to pay her entire health-care insurance premium plus a $50-a-month fee for nonparticipation.
Orion fired Schobert in May 2009, just a month after she declined to participate, in retaliation for her refusal to submit to medical inquiries and exams that weren't job-related and consistent with business necessity, the EEOC said.
Orion's plan required participating employees to complete a health risk assessment and submit a blood sample for analysis, the EEOC said. After Schobert questioned whether the health risk assessment was voluntary and whether the medical information obtained would be kept confidential, Orion managers told Schobert not to share her qualms with co-workers and to quash any potential “attitude” about the wellness program, the EEOC alleged.
Orion violated the ADA because the medical exam and disability-related inquiries connected with its wellness program weren't “voluntary,” the EEOC alleged. By subjecting Schobert to about $463 per month in financial penalties and subsequently firing her, Orion rendered the wellness program involuntary and therefore not compliant with the ADA, the EEOC alleged.
In a January 2013 informal agency discussion letter, the EEOC said medical inquiries and exams connected to voluntary wellness programs are permissible under the ADA, and that “voluntary” means the employer neither requires participation nor penalizes employees who don't participate. But the EEOC cautioned that its letter wasn't an official agency opinion.
“Employers certainly may have voluntary wellness programs,” said John Hendrickson, EEOC's regional attorney in Chicago. “But they actually have to be voluntary. They can't compel participation by imposing enormous penalties such as shifting 100 percent of the premium cost for health benefits onto the back of the employee or by just firing the employee who chooses not to participate.”
In its 2010 final regulations under GINA, the EEOC said a wellness program can be voluntary even if employers offer limited financial incentives or rewards for participation provided they don't penalize employees who opt not to participate.
“Employers certainly may have voluntary wellness programs—there's no dispute about that—and many see such programs as a positive development,” said John Hendrickson, the EEOC regional attorney in Chicago.
“But they actually have to be voluntary. They can't compel participation by imposing enormous penalties such as shifting 100 percent of the premium cost for health benefits onto the back of the employee or by just firing the employee who chooses not to participate.”
“Having to choose between responding to medical exams and inquiries—which are not job-related—in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all,” Hendrickson said in an Aug. 20 statement.
Orion didn't respond to Bloomberg BNA's Aug. 22 request for comment on the suit.
The case has been assigned to Judge William C. Griesbach.
Laurie A. Vasichek of the EEOC's Minneapolis office represents the agency. No attorney entered a court appearance for Orion as of Aug. 22.
To contact the reporter on this story: Kevin McGowan in Washington at email@example.com
To contact the editor responsible for this story: Susan J. McGolrick in Washington at firstname.lastname@example.org
Text of the complaint is available at http://www.bloomberglaw.com/public/document/EEOC_v_Orion_Energy_Systems_Inc_Docket_No_114cv01019_ED_Wis_Aug_2.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)