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Employment Law Worldview

When it’s really better not to know – escaping liability for someone else’s discrimination

Posted in Age Discrimination, Recent Cases

Manager A tells manager B that employee C isn’t up to the job.  Believing this to be true, B sacks C. Is B guilty of discrimination if A’s report to him is tainted by improper considerations of C’s age?

This sounds like an examination question but was actually a real issue facing the Court of Appeal last week in CLFIS (UK) Limited – v – Reynolds.  The facts matter little beyond the summary above (save that C was an independent contractor, not an employee) but were complicated by two additional points:

  1. When B told C (aged 72) that her contract would not be renewed he tried to soften the blow of a termination for poor performance, describing it instead as being part of CLFIS’s “succession planning process”. This gallant attempt to do the right thing had the twin disadvantages that (a) it was wholly untrue and so cast a long shadow over much of the rest of B’s evidence; and (b) with unerring precision it turned a legitimate reason for the non-renewal into a discriminatory one.
  2. Part of B’s pleaded reason for choosing to discontinue C’s contract despite her long association with CLFIS was his view that she was very unlikely to be able or willing to make the changes to her working practices which would be necessary to address the performance concerns highlighted by A. So not only did he tell her that it was about succession planning, but also there was a strong whiff of the traditional problems with old dogs facing new tricks in his thought processes even on the (otherwise legitimate) performance front.

C sued CLFIS and understandably concentrated all her fire on the hapless B, seemingly doomed victim of his own good intentions. Significantly, she did not make any allegations that CLFIS was liable for A’s actions.

As the evidence unfolded, it became apparent that B had genuinely and reasonably believed on the back of A’s report that C’s performance warranted not renewing her contract. It was found that he had no reason to consider that A’s input was prejudiced on age grounds.  His explanation to C was therefore misguided and “did him no credit”, said the Tribunal, but did not make discriminatory a reason which was not.  His view that C would not make the necessary changes to her working behaviours was found to be based on his own experience of her and on the abject failure of prior attempts to bring about those shifts.  Therefore although the “old dogs, new tricks” assumption would indeed be discriminatory, B had not actually made it.

As the relieved B staggered out of the Employment Tribunal, ashen-faced but a free man, where did that leave C?  Even if B’s part in it had been totally unwitting, the fact remained that A’s allegedly discriminatory report had led to her losing her position.  Could she succeed against CLFIS on that basis?

The Employment Tribunal, upheld in full by the Court of Appeal, said not.  C’s case had not included allegations against A, and they could not be added later.  If C had pursued the propriety of A’s report in the first place, the position might have been different, though the Court of Appeal admitted in the same breath that she could not be blamed for not doing so initially because B’s conduct had drawn all the flak to him.  However, as the case had developed, B’s reliance on A’s report had become clear, and there had technically been an opportunity to re-frame her case at that time.

A very unfortunate outcome for C, therefore, and a clear pointer to employees to keep prospective sources of discriminatory input into dismissal decisions firmly in mind as the case progresses, and to take steps to amend their claim if need be.

Poland – new laws on garden leave and fixed term contracts

Posted in Contracts, Legislation, Terms of Employment

A draft Bill was filed by the Government with the Polish Parliament on 10 April. The Bill proposes changes to the Polish Labour Code and related laws, mainly as regards 1) fixed term contracts and their termination, and 2) for the first time, the introduction of the concept of garden leave into the Labour Code.

Fixed term contracts 

Current regulations 

  • There are no statutory limits on the duration of fixed term contracts, though certain restrictions have been imposed via caselaw.
  • There are no limits on the number of fixed term contracts; however, entering into a third successive fixed term contract is considered akin to entering a permanent contract.
  • The notice period for a fixed term contract is 2 weeks, if 1) the contract is for at least 6 months and 2) the contract provides for termination part way through (other than for summary dismissal).

Proposed regulations 

  • A fixed term contract may be concluded for a maximum of 33 months (whether as one or multiple contracts between the same parties). Any longer contract will convert into a permanent contract after that time.
  • If more than 3 fixed term contracts are concluded the 4th shall count as a permanent contract. Bizarrely, that appears to be the position even if there is a break, perhaps of many years, between the 3rd and 4th contracts.
  • The notice periods for fixed term contracts will be the same as for permanent contracts i.e. should depend on the length of service with the employer and be at least (i) 2 weeks – if employed for less than 6 months, (ii) 1 month – if employed for at least 6 months, (iii) 3 months – if employed for more than 3 years.

Garden Leave  

Currently “garden leave” is not expressly regulated in the Polish Labour Code but it is nonetheless widely accepted in practice. In general garden leave requires the employee’s consent.   The proposed regulations authorise the employer to unilaterally release the employee from the obligation to perform work, i.e. send him on garden leave upon payment of his salary and any benefits regardless of his own views on the matter.

Offensive tattoos in the UK workplace? Come on, be reasonable

Posted in Discrimination, Dismissal, Employment Tribunal, Harassment, Religions

I am quite confident that a great many of us have considered the possibility of getting a tattoo.  It may have been during the heady days of youth and only a fleeting fantasy, but a consideration nonetheless.  I will freely admit toying with the idea right up to the moment I realised that ‘inking’ myself would be the equivalent of taking a Toyota Prius and giving it a flame paintjob.  I would essentially still be a Prius.

People have all sorts of words, symbols or pictures permanently etched onto their skin usually voluntarily and often but not invariably with deep personal meaning to the recipient, (at the time, anyway).  I once worked with a man who had his own name tattooed onto his calf.  As far as I could fathom, he did so for those days when he drank himself to the stage that he forgot it, but even though this turned out to be quite common, he never took up my suggestion that his address might be more useful.

However, the prompt for this musing is something a little more serious, the potential for a tattoo to generate ill-will in the workplace.  We have seen cases about inappropriate dress and the “right” to wear/display religious symbols, but how do they translate to tattoos?  Take as an obvious example, an employee who in days gone by chose to have a swastika tattooed somewhere visible on his person. The swastika is a symbol that generates strong feeling around the world, an association with an ideology which still rightly lives raw in the minds of many Europeans.  It generates the same inward flinch which usually stopped us abbreviating the name of this firm to initials when we were called Squire Sanders.

A potentially tricky scenario can then arise.  What happens if you have an employee who has a swastika tattoo which cannot easily be covered up at all times during work?  What happens if another employee finds that symbol particularly offensive and complains that the tattoo creates a hostile working environment?  What solution can the employer suggest that is fair for all parties?

Firstly, it should not be assumed that the tattooed employee is necessarily a neo-Nazi gang member.  The swastika had a very long and varied symbolic history well before any fascist association.  In fact, it originates from the Sanskrit for “lucky or auspicious” and is a very sacred symbol in Hinduism, Buddhism and Jainism.  In addition, the Finnish Air Force also used it on its aircraft (in blue) during World War Two.

I accept that this hypothetical tattooed employee is unlikely to be a Finnish war veteran, but equally it does not mean that he did, still less does, actually hold Nazi views.  If you want to look tough, a rebel, someone to be scared of, what else are you going to pick as your tattoo?  For those who miss out on the Prius moment, the heady combination of drink, youth, peer pressure and rank stupidity can lead a chap to do foolish things quite without regard to what they could mean or will look like in later years.

We would therefore suggest that employers apply a test of that old lawyers’ friend, reasonableness.  Question whether the tattooed employee exhibits any other behaviours or attitudes that add to the offensiveness or the hostile environment complained of.  Ask if it reflects his actual views and if not, how he came to have the tattoo despite knowing (presumably) of its hideous connotations.  Do you doubt his explanation (“I was young, drunk and incredibly stupid”)?  Does he have anything else in the work environment which displays a swastika, or glorifies Nazi beliefs?

If the answer is no, a Tribunal is likely to find that it is unreasonable for the offended employee to claim that the tattoo alone creates a (legally) hostile environment.  Therefore, dismissing the tattooed employee simply for that reason will be unreasonable.  To reduce the risk of its even being suggested, however, it may be helpful to hold a meeting where the tattooed employee can explain the circumstances behind the tattoo to the offended individual.  A reasonable explanation could largely defuse the offence.

This may be slightly more difficult in the case where the offended employee has a very particular reason to be especially offended.  Regarding the swastika, an employee could have a family background heavily affected by Nazi crimes.  In such a situation, more care might need to be taken and adjustments may be suggested, such as seeking methods of covering the tattoo or even moving one of the employees to a different part of the office or different shift.  These actions could be seen as reasonable depending on the circumstances, but the dismissal of the tattooed employee is still very unlikely to be deemed reasonable unless there is much more to the giving of offence than merely the tattoo.

Of course the position may be different if the employee acquires the tattoo while grown-up, sober and superficially rational.  If you associate yourself with the symbolism of Nazism without any mitigating circumstances it becomes harder for anyone, employer or offended employee, to believe that it does not reflect your actual views. In such a case there must be a good argument that the employee getting the tattoo disqualifies himself from remaining in the role if it cannot be hidden and there is (as there must be) a reasonable prospect of offence to others.

ECJ Restores Order in UK Collective Redundancy Dismissals

Posted in Legislation, Recent Cases, Redundancy

So that turned out to be a lot of fuss about not very much, didn’t it?

USDAW – v – Ethel Austin, better known as the Woolworths case, was a challenge by trade union USDAW to the established reading of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.  This requires collective information and consultation when at least 20 redundancies are proposed at any one establishment.  Historically, “establishment” had been read as “site”, but USDAW argued that it should mean the whole employer.  That would require multi-sited employers to consider the number of redundancies being proposed across their entire network, not just per location.  This was not solely an exercise in academic one-uppery – the union was seeking failure-to-consult protective awards for several thousand employees made redundant on the 2008 collapse of retailers Woolworths and Ethel Austin who had worked at sites with less than 20 staff.

USDAW’s European adventure ended in the European Court of Justice this morning, where the Court found that “establishment” in the collective redundancy legislation means the site where the employee works, and not the employer as a whole.  Whether you get to the 20 redundancy trigger point is therefore to be determined by reference to that site alone.

What this decision does not do is alter the considerations taken into account in determining whether a work location is an establishment in the first place.  Not all are.  It will still be necessary for the employer to show that the site has the necessary degree of autonomy and permanence to qualify. Are staff contractually assigned there?  Does it have its own customers, equipment, P&L? Does it have its own management (even if they then report up to HQ), or its own Legal or HR or IT support staff?  A small branch of a retail chain will easily satisfy this test, but a company’s presence on a building site, a pop-up store, a site which is no more than a mail-drop, etc., may well not do so.

No doubt some politician is even now trying feverishly to work out whether this reflects well or badly upon our EU membership (common sense is now restored, but on the other hand the issue would not have arisen at all were it not for the EU Collective Redundancies Directive).  Employers by contrast, need not spend any more time on this beyond noting that the approach which they had taken to collective redundancy consultation before Woolworths (and in many cases since it, the alternative being too administratively hideous to contemplate) is now again approved practice.  While there remains the hurdle of a formal domestic ruling on this by the Court of Appeal, it is almost impossible to conceive that their Lordships will look this particular gift horse in the mouth.  A return to the pre-Woolworths days seems inevitable.

Supreme Court Rules EEOC Conciliation Efforts Are Subject to Oversight

Posted in Age Discrimination, Conciliation, Disability Discrimination, Discrimination, EEOC, Harassment, Mediation, Race discrimination, Recent Cases, Religious Discrimination, Sex Discrimination

On April 29, the US Supreme Court held unanimously that courts may review the Equal Employment Opportunity Commission’s (EEOC) efforts to informally resolve disputes between employers and employees.

The EEOC, which is charged with policing compliance with employment discrimination laws, is required by statute to first try informal mediation methods to resolve disputes between employers and employees. When those efforts fail, the agency may sue the employer. The decision in Mach Mining v. EEOC makes clear that courts have the authority to examine whether the EEOC’s conciliation efforts were sufficient.

In Mach Mining, an employee filed a charge with the EEOC alleging that Mach had refused to hire her because of her sex. After an investigation, the agency concluded there was enough evidence to suggest discrimination. It wrote to both the company and the woman inviting their participation in informal dispute resolution efforts. A year later, the EEOC sent Mach a letter indicating that any further conciliation efforts would be “futile.” It is not clear what happened in the interim that led the agency to its conclusion.

The agency sued Mach, and in response, and the company alleged the EEOC had not attempted to resolve the matter in good faith before filing its lawsuit. The EEOC argued its conciliation efforts are not subject to judicial review, and that even if they were, the two letters to Mach were sufficient evidence to proceed to litigation.

The Supreme Court found that Title VII – one of the anti-discrimination laws the EEOC enforces – did not specifically exempt the agency’s conciliation efforts from judicial review and that, in fact, courts routinely enforce the statute’s prerequisites to litigation.

“Congress has not left everything to the Commission,” the Court found. “Absent [court] review, the Commission’s compliance with the law would rest in the Commission’s hands alone. We need not doubt the EEOC’s trustworthiness, or its fidelity to law, to shy away from that result. We need only know—and know that Congress knows—that legal lapses and violations occur, and especially so when they have no consequence.”

As to the scope of a court’s review, though, the Supreme Court rejected both the EEOC’s claim that the bookend letters were sufficient evidence of its settlement efforts, and Mach’s strategy of requiring the EEOC to meet a “good faith” standard. The EEOC’s standard would not hold the agency accountable enough, the Court said. And Mach’s standard would violate the flexible spirit of Title VII, while also jeopardizing the confidentiality of the conciliation process.

The Supreme Court indicated that the EEOC will need to provide sworn affidavits that it gave the employer the required information about the charges and engaged in discussion about conciliation. That will be sufficient to proceed with the lawsuit unless the employer submits evidence that the EEOC affidavit is false.

In all likelihood, this decision will not have a particularly big impact on most EEOC lawsuits. Unless an employer has real evidence that the EEOC did not discuss conciliation or informal resolution of the dispute, then an EEOC lawsuit will be allowed to proceed. Only in the rare case where an employer can prove the EEOC either did not give notice of the charges or did not attempt to discuss alternative resolution methods will a court dismiss the case. Even if an employer wins a dismissal, that simply means the EEOC must go back and try conciliation before suing again.

A warning point on bad faith for UK employers

Posted in Recent Cases

It has long been assumed that once a warning is given it becomes pretty much fact, and therefore that later decisions, such as redundancy selection or next-stage disciplinary dismissals, can safely be built on top of it. After all, runs the argument, if the employee thought that the warning was not legitimate, he had the protection of his right of appeal at that time.

The principal exception to the rule about not going back to old warnings is where they are not given in good faith, a Tribunal-designed measure to prevent employers creating a procedural basis for a redundancy or a disciplinary dismissal by imposing spurious reprimands in the run-up to it. But again, surely any bad faith argument should have got a decent airing at the appeal stage, so when would this ever actually come up?

One example is obviously the case where the appeal itself is also conducted in bad faith by the employer. Another will be where the employee is prevented from appealing at all. In  Way –v– Spectrum Property Care Limited, Mr Way was given a final warning by his manager, Mr Brooks, for hiring a relative without disclosing the fact as required by company procedures. However, Mr Brooks was alleged to have known full well of Mr Way’s relationship with the new hire and to have agreed to the recruitment nonetheless. Against that background, Mr Way said that his warning was an attempt by Mr Brooks to cover up his own involvement in the hire, i.e. was given in bad faith. When he asked about appealing, however, Mr Way was wrongly told (as Spectrum ultimately admitted) that if he did so there was a risk that the sanction would be escalated to dismissal, and that he would be much better off by just letting the matter lie.

So Mr Way did not appeal and the warning was consequently still live when he sent an inappropriate email in breach of Spectrum’s rules several months later and was dismissed. It was accepted that had that prior warning not been there, he would have got only a warning for the email and would not have lost his job.

The Employment Tribunal ruled his dismissal fair – the prior warning was there and had not been appealed against, so tough luck. The EAT agreed. However, the Court of Appeal decided that Mr Way had done enough at the Tribunal to raise the bad faith argument, that the Tribunal should therefore have considered it, and that it had not done so. The Court has sent the matter back to the Tribunal to look at that point. If it agrees that the warning was not given in good faith, then it will effectively disappear and Mr Way’s dismissal will become unfair.

But how does an employer assess “bad faith” for this purpose? The Way case does not much help us in this, but it is still potentially a crucial part of determining the fairness of a termination, so here goes:

A warning will still count as issued in good faith even though:

(i)      the employer’s genuine belief that there were grounds for it was objectively mistaken;

(ii)      the warning was at a higher level than the Tribunal itself would have imposed;

(iii)     there were procedural defects in the disciplinary process; or

(iv)    the employee did not think that it was fair.

On the other hand, a warning may be held issued in bad faith if:

(i)      the employer knows that grounds for it do not exist;

(ii)      it is driven by consideration of the employee’s race or sex or other protected characteristic;

(iii)     it is designed to cover up someone else’s misconduct or poor performance;

(iv)    it is imposed specifically to make it easier to dismiss the employee at a later date;

(v)     there is unarguable evidence of pre-determination of guilt; or

(vi)    the employee is deliberately misled or blocked in relation to his rights of appeal.

The lessons for employers from the potential over-turning of the fairness finding in the Way case are therefore these:

(i)      keep records of your disciplinary process and, in particular, of the facts which led you to believe that there were grounds for taking disciplinary action;

(ii)      don’t create disclosable correspondence, internal or external, which points to pre-determination of the disciplinary decision;

(iii)     be seen to investigate pre-decision any allegations of bad faith or discriminatory intent on the part of the disciplining manager; and

(iv)    be seen to notify the employee of his right to appeal and don’t act so as to discourage him from pursuing it.

Employers of District of Columbia Employees Have One Month Left To Provide Wage Notices To Current Employees

Posted in Hiring, Wage and Hour

The District of Columbia’s Wage Theft Prevention Amendment Act of 2014, which became effective on February 26, 2015, requires in part that employers provide written wage notices to their D.C.-based employees.  Employers have until May 27, 2015 to satisfy this requirement with respect to their employees who were employed as of the Act’s effective date of February 26, 2015.

Specifically, the law requires written wage notices as follows:

  1. New Employees:  Employers are required to provide a written wage notice, both in English and in the employee’s primary language, to all new employees at the time of hiring (with receipt of the notice to be acknowledged in writing by the employee and a copy retained by the employer);
  2. Current Employees:  Employers are required to provide a written wage notice, both in English and in the employee’s primary language, to all current employees (who were employed as of February 26, 2015) by May 27, 2015 (with receipt of the notice to be acknowledged in writing by the employee and a copy retained by the employer);
  3. Upon Change:  Employers are required to provide a written wage notice, both in English and in the employee’s primary language, whenever there is a change to any information on the wage notice (with the notice to be acknowledged by the employee and a copy retained by the employer).

The D.C. Mayor released a wage notice template [pdf] in English and a wage notice template [pdf] in Spanish, which employers may use, but are not required to use as long as they include all of the required information in their own self-prepared wage notice.  The D.C. Mayor released a different wage notice template [pdf] in English and a wage notice template [pdf] in Spanish for use by temporary staffing firms.  Also, the D.C. Mayor released a notice [pdf] that D.C. employers must post in their workplaces in a conspicuous and accessible location, usually where other required legal notices are posted.

If you are an employer of D.C.-based employees and if you have not yet provided written wage notices to your current employees as required by the Wage Theft Prevention Amendment Act, then you will want to take action soon in order to have sufficient time before the May 27, 2015 compliance date to prepare, distribute, and obtain signed copies from your employees, which you will need to retain.  Further, self‑prepared notices should be reviewed to confirm full compliance with the requirements of the Act.

Yes, but what if they stay? – the aftermath of covertly recording your colleagues

Posted in Discrimination, Harassment, Mediation

Some thorny issues for employers arise from the reported settlement last week of a sexual discrimination and harassment claim brought against Goldman Sachs by Sonia Pereiro-Mendez.

This case hit the news not because of the nature of her allegations (big City house treats pregnant woman as suddenly of much less value – all relatively usual stuff) or even the £2m+ size of her claim (again, not unheard-of in the Square Mile) but because she had covertly filmed a number of her colleagues to gain evidence of their allegedly discriminatory behaviours towards her.

We cannot know what that film showed, but there is an obvious inference to be taken from reports that the settlement was for around £1 million.  This might or might not be true, but it does highlight the risk faced by any employer that its confidential settlement will somehow find its way into the news anyway.  Does anyone else remember the member of Princess Di’s domestic staff who emerged blinking onto a South Croydon pavement to explain guilelessly to the world’s press that a settlement of her Tribunal claim had been reached, and that whilst she could obviously not disclose its terms, it was “like winning the lottery“.  Employers beware – it is realistically impossible to prevent this.

Goldman’s much bigger prospective problem, how to deal with Ms Pereiro-Mendez after the claim had run its course, was clearly averted by her agreement to leave.  It is hard to avoid the view that Goldman must have paid a high price for this, but I suspect that they will consider it worth the money.  This is not a comment on the merits of her claim nor on the contents of her covert recordings, but on the fact of those recordings being made and the difficulties which they would pose for any continuing relationship with her.

You have to have some sympathy with any discrimination Claimant in this position – they need hard evidence to support their claim, only start filming once the behaviours objected to have started and are obviously not to blame if the employer chooses, however unwittingly, to behave inappropriately in front of them.  On the other hand, who would easily agree to manage or work with such a Claimant post-case?  The outcome would not matter – win or lose, they would still be perceived by their colleagues as someone who would use covert means to gain evidence if they felt in any way disadvantaged, even through the ordinary reversals of office life such as performance management procedures, etc.  You could ask them at each meeting whether they were recording you, but best not, as you would then run the risk that (a) their answer might not be true – this would not stop the Tribunal from considering the film anyway – and (b) the degree of mistrust evidenced by the repeated question would probably amount to grounds for a victimisation claim in any case.

Where there has been press coverage of the sort seen in the Goldman’s case, you could not even resolve the issue by shuffling the employee discreetly into a separate department.  You wouldn’t have to have worked with them in the past to fear a repetition going forward.

You might want the employee to leave and your thoughts might turn to the protected conversations regime – can’t we just have a grown-up chat about your pushing off since no one here really trusts you any more?  But whether or not the sub-text is that we are angry mainly with ourselves for being trapped on film doing something stupid, that avenue doesn’t work – that regime specifically excludes conduct which is discriminatory.

So you could try to draw a line between the making of the discrimination allegation on the one hand (irritating, but you have no choice but to live with it), and the manner of doing so on the other (covert and immensely destructive of the necessary trust and confidence of other colleagues).  The distinction is legitimate at law but very difficult in practice, especially where the recordings do show inappropriate conduct, and doubly especially if that conduct was initially denied.  The line would be much easier to define and more easily crossed, however, if the employee were found to be recording at random or without reasonable grounds to believe that he/she was being treated unlawfully.

So you are left with what?  A faint hope that relations will have been so comprehensively destroyed by the claim that the employee him/herself will realise that the time has come to move on, or (more constructively) proposing very gently a form of mediation “to address the trust issues”, which might equally gently then be steered towards a parting on terms.  Once inside the mediation “bubble”, the possibility of a parting could be raised with far less risk than outside it.

Of course, there is nothing in the rules which says that any complainant using covert recordings of colleagues as evidence necessarily has to leave.  Perhaps there are means of restoring the necessary trust and confidence through explanation, time, patience and trust.  It would be foolish, though, to have no options for the occasion when they fail.

Sixth Circuit clarifies: Demanding a supervisor cease harassment is a protected activity

Posted in Conduct, EEOC, Employment Policies, Harassment, Misconduct, Recent Cases, Retaliation, Sex Discrimination

On April 22, the Sixth Circuit Court of Appeals issued a decision that clarifies that, for purposes of Title VII retaliation cases, an employee’s demand that a supervisor stop his or her harassing conduct constitutes protected activity under the statute. Affirming the findings of several district courts in the circuit, the appeals court held that an employee need not file a formal complaint with their employer to be protected under Title VII.

In EEOC v. New Breed Logistics, three female former employees sued New Breed when they were fired after complaining about sexual harassment by their supervisor. A fourth former employee, a male who witnessed the harassment, was fired after he spoke with an investigator about the supervisor’s conduct. At the trial level, a jury awarded the four employees $1.5 million in damages.   New Breed, a supply-chain logistics company, appealed the verdict, arguing that the employees had not engaged in protected activity, that the people who decided to fire the plaintiffs were not aware of the protected activity, and that the protected activity was not the actual reason the employees were fired.

According to the Sixth Circuit, the “opposition clause” of Title VII, which prohibits retaliation against an employee who opposes an unlawful practice, requires an “expansive definition.”  “Sexual harassment is without question an ‘unlawful employment practice,’” the court wrote. “If an employee demands that his/her supervisor stop engaging in this unlawful practice . . . the opposition clause’s broad language confers protection to this conduct.” In addition to determining that the employees’ complaints to the harassing supervisor were sufficient, the Sixth Circuit found that one employee was terminated by the harassing supervisor after she complained. The others were terminated by other supervisors acting under the harassing supervisor’s influence.

Employers in the Sixth Circuit should note now that an employee’s complaints to anyone at the company about a supervisor’s harassment could constitute protected activity for the purposes of a Title VII claim. Whether the company knows about the protected activity will require more in-depth analysis in each case, but employees now have a fairly low bar to proving they engaged in protected activity.

EEOC Proposes Amendments to ADA Regulations Relating To Employer Wellness Programs

Posted in Disability Discrimination, EEOC, Employment Policies, GINA, Healthcare, Legislation, Wellness Programs

The EEOC has proposed amendments to its regulations under the Americans with Disabilities Act (“ADA”) as they relate to employer wellness programs.  These proposed amendments were published on Monday, April 20, triggering a 60-day public notice and comment period.  The proposed amendments aim to define which employer wellness programs are valid under the ADA, which is much needed.

The Need for Amendments

Although the ADA generally restricts employers from making disability-related inquiries and requiring medical examinations, it makes an exception for “voluntary medical examinations, including voluntary medical histories, which are part of an employee health program,” such as a workplace wellness program.  Previously, the EEOC provided that an employer wellness program is “voluntary” as long as an employer “neither requires participation nor penalizes employees who do not participate.”  It has remained unclear, however, to what extent financial incentives used in an employer wellness program (either rewards or penalties, such as prizes, cash, or a reduction or increase in health care premiums or cost sharing) might undermine the “voluntary” nature of the program and result in a violation of the ADA.

Due to this lack of clarity, some employers have shied away from implementing employer wellness programs or have even landed in hot water with the EEOC.  Indeed, as reported here, the EEOC filed three lawsuits in late 2014 alleging that certain employer-sponsored wellness plans, which imposed financial penalties on employees for non-participation in health risk assessments and medical exams (such as requiring them to pay the full amount of their health care premiums), rendered the plans involuntary and thus violated the ADA.  In an attempt to provide much-needed guidance, the proposed amendments are designed to allow “certain incentives” related to wellness programs, “while limiting them to prevent economic coercion that could render provision of medical information involuntary.”

The Proposed Amendments

Specifically, the EEOC-proposed amendments would:

  • Continue to permit an employer to conduct voluntary medical examinations and inquiries as part of voluntary employer wellness program.
  • Require an employer wellness program, along with any disability-related inquiries or medical examinations included in the program, to be “reasonably designed to promote health or prevent disease.”  This means the program must (1) have a reasonable chance of improving health or preventing disease; (2) not be overly burdensome; (3) not be a subterfuge for violating the ADA or other anti‑discrimination law; and (4) not be “highly suspect” in its methods of promoting health or preventing disease.
  • Deem as “voluntary” an employer wellness program, which includes disability‑related inquiries or medical examinations, in which the employer (1) does not require employees to participate; (2) does not deny group health coverage or limit benefits for non-participation; (3) does not take any adverse employment action or other unlawful action (e.g., retaliation, coercion, etc.) under the ADA; and (4) if the program is part of a group health plan, provides a written notice to employees that describes the type of medical information that will be obtained, the specific purposes for which this information will be used, the restrictions on disclosure, and the methods used to ensure non-disclosure of this information.
  • Limit incentives used in connection with an employer wellness program that is part of a group health plan so that the maximum allowable incentive available under the program does not exceed 30 percent of the total cost of employee-only coverage.
  • Generally restrict the disclosure made to an employer of obtained employee medical information or history to information in aggregate terms that does not disclose the identity of any employee, with certain limited exceptions.

Noteworthy is that the “30 percent” limit on incentives is in large part consistent with a 2013 joint agency regulation that permits incentives in health-contingent employer wellness programs up to 30 percent of the total cost of employee-only coverage without violating HIPPA.  The proposed ADA amendment, however, limits this incentive for all employer wellness programs that are part of a group health plan (participatory and health-contingent programs) rather than just health-contingent programs.  (“Participatory” programs do not provide a reward or include any condition for obtaining a reward based on satisfying a health standard.  “Health-contingent” programs require individuals to satisfy a standard related to a health factor to obtain a reward or to undertake more than another individual based on a health standard to obtain the same reward.)

Also noteworthy is that the proposed amendments place additional restrictions on employer wellness programs that include disability‑related inquiries or medical examinations and that are part of a group health plan, such as a written notice requirement and the limitation on incentives.  The proposed amendments do not contain any restriction on incentives for employer wellness programs that do not require disability‑related inquiries or medical examinations (such as a program that requires only class attendance).  They also do not contain any restriction on incentives for employer wellness programs that are not part of a group health plan.

Finally, these proposed amendments address employer wellness plans only under the ADA and not under other non-discrimination laws, with the EEOC suggesting that there will be further rulemaking with respect to employer wellness programs under the Genetic Information Nondiscrimination Act (GINA).

Stay Tuned

After the public comment period, the EEOC will review received comments and ultimately publish a final rule.  At that time, employers with established employer wellness programs will need to review them for compliance with the final regulations.  Employers without established employer wellness programs may decide at that time, after it becomes clear which programs violate the ADA, to implement such a program.