EEOC Alleges Orion Energy Violated the ADA By Firing Worker Who Declined Wellness Plan

By Kevin McGowan

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.

Alleged Retaliation by Employer

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.

‘Voluntary' Programs Permitted

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 kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick in Washington at smcgolrick@bna.com

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.