The post below is a guest blog from Robin Shea who serves as Partner for Constangy, Brooks & Smith, LLP, CAI’s Partner for the 2014 Triad Employment Law Update. This post originally appeared on her blog Employment and Labor Insider.
Robin Shea, Partner at Constangy, Brooks & Smith
The Equal Employment Opportunity Commission filed suit against Wisconsin-based Orion Energy Systems, Inc., over its wellness program and its treatment of ex-employee Wendy Schobert, who was not a fan of the program. The lawsuit contends that the program’s health risk assessment is an unlawful “medical examination” and that the company retaliated against Ms. Schobert for failing to have a positive attitude about it. Both the medical examination and the retaliation, says the EEOC, violate the Americans with Disabilities Act.
If you’ve been keeping an eye on this wellness/ADA issue — as I have here, here, here, and here — you know that the EEOC has not been as forthcoming with guidance as we’d ideally like, although in May it promised that we’d be getting something soon. That having been said, if the EEOC’s allegations in this lawsuit are correct,* then Orion may have a problem.
*All we have now is the lawsuit and the EEOC’s press release. We have not heard Orion’s side of the story.
According to the lawsuit, participants in Orion’s wellness program had to use a range-of-motion machine, provide their medical histories, and have blood work done. As we discussed last week, the ADA says that this kind of information can be requested of current employees only if it is “job-related and consistent with business necessity” or if the information is requested in connection with a voluntary wellness program.
Because Orion obtained the information for “preventive” reasons, it was not JRACWBN (Job-Related and Consistent With Business Necessity) in the least. But it was clearly obtained in connection with a wellness program.
And Orion’s wellness program was “voluntary” . . . technically speaking. Employees didn’t really have to participate — as long as they were willing to pay 100 percent of their health insurance premiums out of pocket. If an employee participated in the program, the company paid 100 percent of the premiums. If an employee did not participate, the company paid zero percent of the premiums. The EEOC says that the cost of health insurance premiums at the times relevant to the lawsuit was $413.43 a month for individual coverage and a whopping $744.16 a month for family coverage. And on top of that, Orion assessed a $50 a month penalty to non-participating employees.
So, yeah, you could decline to participate if you were Donald Trump. But most people presumably went with the program because they couldn’t afford not to. And that is why the EEOC says Orion violated the ADA’s “medical examination” provisions — it was asking for medical information that was not JRACWBN, and even though the information was obtained in connection with a wellness program, the program wasn’t truly “voluntary” because of these draconian penalties.
The “retaliation” part of the lawsuit is more routine. Ms. Schobert didn’t like the wellness program, and she not only refused to participate, but she also allegedly tried to get other employees to resist, I’m guessing like the Penn State wellness debacle that got so much publicity last year. According to the EEOC’s lawsuit, HR called her in and asked her to adjust her attitude. When she didn’t, they fired her.
This Orion suit will be one to watch, and employers should be looking forward to getting some concrete preventive guidance from the EEOC about wellness programs and the ADA — particularly the “voluntariness” issue. My ultra-conservative view has been that rewards are probably all right, but that penalties are dangerous. And an employee can always argue that an employer’s refusal to give a non-participant a “reward” is, in effect, a “penalty” for non-participation. Especially when we’re talking about monthly health insurance premiums of $400-700 a month.
It appears that I am not the only one on the employers’ side who is wary about aggressive wellness programs and the ADA.
Finally, it’s worth keeping in mind that Ms. Schobert was terminated in 2009, and so the Affordable Care Act was not at issue. The ACA wellness provisions do not address the issue of voluntariness. But they do specifically authorize employers to grant significant economic “rewards” to employees who achieve results (for example, by reducing their Body Mass Index) in so-called “health-contingent” wellness plans.
All the more reason that employers need help from the EEOC in knowing the agency’s position on the interplay of the ADA wellness restrictions (as well as those that apply under the Genetic Information Nondiscrimination Act) and the ACA.
Robin Shea is presenting at the 2014 Triad Employment Law Update on November14th at the Grandover Resort in Greensboro. In addition to receiving information on new decisions from the EEOC and DOL, attorneys from Constangy, Brooks and Smith, LLP will provide you with the most recent updates in state and federal employment law. Register today at www.capital.org/triadlaw.