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Advocacy & Compliance News

Legal Watch - September 18, 2014
September 18, 2014

By Ira Michael Shepard, CUPA-HR general counsel and partner with Saul Ewing LLP

EEOC Says Mandatory Participation in Employer’s Wellness Program Violates ADA

The Equal Employment Opportunity Commission recently filed a lawsuit against an employer who allegedly retaliated against an employee who refused to participate in a wellness program by requiring her to pay her entire healthcare premium and ultimately terminating her employment (EEOC v. Orian Energy Systems Inc. (E.D. Wis., No. 14-1019, complaint filed 8/20/14)).

The EEOC emphasized publicly that it does not believe voluntary wellness programs violate the ADA. However, it said, when the program becomes mandatory and involves health risk assessments and mandatory general health inquiries, it crosses the line. Requiring mandatory medical testing violates the ADA unless it can be shown that the testing is specifically job related and required by business necessity. In this case, the EEOC alleged that the employer violated the ADA because the medical exam and disability-related inquiries connected with the wellness program were not voluntary. As a result of her refusal to participate, the employee was subjected to $463 a month in financial penalties (the amount of her monthly healthcare premiums which she was required to pay). In addition, the EEOC claimed she was terminated as a result of her refusal to participate in the wellness program.

The EEOC also alleged that after the employee in question raised the question whether participation in the wellness program would be voluntary and also inquired about the confidentiality of the medical tests, she was told not to share her concerns with coworkers and to stop any potential negative “attitude” about the wellness program. The agency concluded that any employer who requires an employee to choose between responding to a wellness program’s medical exams and inquiries, which are not job related, or being fired on the other hand is no choice at all, and therefore makes the program mandatory and a violation of the ADA.

Community College Loses Summary Judgment Argument That “Red Circled” Salary Is a Defense to Equal Pay Act Claim

A federal district court in Alabama ordered a community college to proceed to a jury trial on a complaint filed by an employee that she was paid less than a male counterpart employee and therefore stated a claim for relief under the Equal Pay Act. The college defended, stating that the male employee’s salary resulted from a legitimate “red circling” because he was transferred into the position because of health reasons. The Equal Pay Act allows legitimate “red circling” of salaries as an exception to the statute if it is done pursuant to a valid seniority system or for transfers into lower paying positions because of health reasons.

The court rejected the college’s defense based on pretrial evidence that the male stated that his transfer was not a result of health reasons. The court ordered that the case proceed to a jury trial over the issue of whether or not the salary differential is based on legitimate reasons other than gender, as both employees performed similar jobs (Youngblood v. George Wallace Community College (2014BL183122, M.D. Ala. No. 1:13-cv-00033, 7/1/14)).

The community college also claimed it had a general policy of not reducing an employee’s salary as a result of a transfer to a lower paying position. While this defense is sufficient under the Equal Pay Act, the court noted that the college did not produce any written documents confirming this alleged school-wide policy.

Mandatory Sex Counseling After Workplace Affair May Violate ADA

The Sixth Circuit Court of Appeals reversed a trial court decision dismissing on summary judgment an ADA claim by an emergency medical technician who was required to proceed to “sex counseling” following her “tumultuous” affair with a married coworker and two emotional outbursts outside the presence of patients. Her supervisor considered her conduct “immoral” and considered her life to be a “mess.”

The court of appeals ruled that the supervisor’s decision was based on two isolated outburst incidents, outside the patient context, and therefore was not based on “reasonable medical judgment.” The court also concluded that the supervisor’s decision to order sex counseling was admittedly based on his moralistic condemnation of the plaintiff and was therefore troubling. The court ruled a jury should decide whether there was an ADA violation (Kroll v. White Lake Ambulance Authority (2014 BL 228963, 6th Cir., no. 13-1774, 8/19/14)).

The appeals court emphasized that the plaintiff’s supervisor did not have a reasonable basis for concluding that the plaintiff was unable to perform her essential job functions when he ordered the counseling. The court also concluded that the plaintiff’s emotional outbursts were outside of normal business hours and also outside of the presence of patients, and therefore did not evidence the plaintiff’s impaired ability to perform her job.

Court of Appeals Rejects College’s Reliance on “Mailbox Rule” to Prove FMLA Notification to Employee

The United States Court of Appeals for the Third Circuit reversed a federal trial court dismissal of an FMLA retaliation on summary judgment in favor of a college, holding that the standard “mailbox rule” which presumes that notices placed in the U.S. mail are received in three days, is rebuttable and the plaintiff who claimed she did not receive the FMLA notice of her 12-week FMLA leave limit is entitled to a jury trial over her claims of retaliatory discharge (Lupyan v. Corinthian College (3rd Cir., No. 13-1843, 8/5/14)).

The appeals court reversed the trial court’s dismissal and ordered a jury trial on the FMLA retaliation claim, holding that the plaintiff’s claim that she never received the letter from the college notifying her that she was on time-restricted FMLA leave, which expired after 12 weeks, raised a jury issue over whether the college ever provided the notice. The court of appeals concluded that the college could have notified the plaintiff by certified or registered mail or by electronic means that requires acknowledgement of receipt, but did not do so.

The court held, “In this age of computerized communications and handheld devices it is certainly not expecting too much to require businesses that wish to avoid a material dispute about the receipt of a letter to use some form of mailing that includes a verifiable receipt when mailing something as important as a legally mandated notice.”