Hospitality Employers: The Future Of Your Wellness Program

Our colleagues Kara Maciel, Adam Solander, and Lindsay Smith have co-authored a Bloomberg BNA article titled, "Future New Year's Resolutions: Will Your Wellness Program Still Be There to Help?"

Following is an excerpt:

With the New Year squarely in the rear view mirror, now is the time when many of our grandiose resolutions to get healthy may run out of steam. For individuals who are relying upon their employer's wellness initiative to provide them with the resources they need to succeed in their resolutions, recent regulatory and legislative changes could jeopardize their ability to rely on their employers in the future.

 I. A New Year Means New Costs

II. Dealing with the 2013 Hangover—Complexities of the Final Rule and Related Regulations

III. Potential Threats to Your Wellness Program

IV. EAPs May Help Keep the Cost of Coverage Lean in 2014

V. Conclusion

Download a PDF of the full article here.

Hospitality Employers Are Ready for Meaningful Guidance on Wellness Programs from EEOC

By:      Kara M. Maciel

The EEOC is holding a public meeting tomorrow, May 8, 2013, to discuss wellness programs and how the EEOC should interpret them under the ADA, GINA and other laws. This is welcome news to the employer community, who has been left without any guidance from the agency since 2000 as to how it will enforce wellness programs. The uncertainty generated by this lack of guidance has hampered businesses from implementing, or expanding, effective wellness programs.   

As we have explained in previous articles, the EEOC regulations, and the EEOC’s Interpretive and Enforcement Guidance permit employers to conduct voluntary medical examinations, including voluntary medical histories, as part of a voluntary employee wellness program. In a formal 2000 Guidance, the EEOC stated that "[a] wellness program is ‘voluntary’ as long as an employer neither requires participation nor penalizes employees who do not participate." 

The employer community has long awaited guidance from the EEOC on the nature and extent of incentives it can offer in wellness plans.  Specifically, key questions that the agency has refused to address are (i) whether and to what extent a reward or incentive mandates participation in the program, or (ii) whether the withholding of the incentive for not participating constitutes a penalty, thereby making the wellness program involuntary. In a letter issued earlier this year, the EEOC did not take a position on this key question, and employers are hopeful the May 8 public meeting will begin the process towards meaningful EEOC guidance.

Wellness programs are becoming increasingly popular with employers as they struggle with rising health care costs and looking for ways to incentivize their workforce to adopt a healthier lifestyle. In recent years, wellness programs have received a renewed focus as a result of the Affordable Care Act which provides new incentives and increased flexibility

There are legal implications, however, if wellness programs are not established correctly that could run afoul of federal discrimination and state privacy issues. Under the ADA, employers are prohibited from asking disability-related questions or conducting medical examinations unless the inquiry is job related and consistent with business necessity. Generally a Health Risk Assessment (HRA) does not meet this standard. The ADA, however, does allow voluntary medical exams or inquiries as part of an employee health program at work. Employers also must provide reasonable accommodations, absent undue hardship, to those individuals who are unable to meet the health outcomes or engage in specific activities due to a disability. Under GINA, wellness programs that provide rewards for completing a HRA requiring disclosure of genetic information (including family medical history) is unlawful, even if the incentives are not based on the outcome of the assessment and regardless of the amount of the incentive. 

To date, the key to the EEOC’s guidance on wellness programs under both the ADA and GINA has been that any participation in the program or disclosure of health information must be voluntary. Hopefully, after tomorrow’s public meeting, the EEOC will provide clarity to employers that incentivize wide participation by individuals in effective workplace wellness programs. 

Illinois Court Gives EEOC a Boost On Controversial Pre-Lawsuit Techniques

By Forrest Read

            In recent years, the Equal Employment Opportunity Commission (EEOC) has taken the aggressive approach of expanding charges it receives from one or a few individuals into larger-scale class actions in federal courts.  Last week, in EEOC v. United Road Towing, Inc., the U.S. District Court for the Northern District of Illinois declined to challenge the adequacy of the EEOC’s administrative practices, thus giving ammunition to the EEOC to continue its approach of widening litigation involving alleged discrimination.

            In that case, the employer, URT, argued that the EEOC had failed to satisfy its pre-lawsuit obligations regarding charges initially brought by two disabled employees under the Americans with Disabilities Act claiming unlawful denial of reasonable accommodation, termination of employment, and refusal to rehire.  Specifically, URT contended that the EEOC added 17 plaintiffs during discovery whose claims it had failed to investigate during its administrative investigation and that its conciliation efforts were deficient because it did not disclose the number or identities of the other purported class members.

            In denying URT’s motion, Judge Castillo took a hands-off approach to judicial review of the EEOC’s administrative practices.  He wrote that the court could not undertake an evaluation of the EEOC’s investigatory practices because doing so would stray from the validity and merit of the actual claims.  As to conciliation, Judge Castillo concluded that the EEOC’s determination letter stating that a class of members had been subjected to violations and its identification of those violations were sufficient triggering of and engagement in conciliation, even without including the specific names and quantity of purported members.

Although other courts have reached different conclusions faced with similar facts, this ruling emboldens the EEOC to continue to decline or neglect to investigate the experiences of each purported class member to the same extent it investigates those of named charging parties.  Moreover, it means the EEOC has authority for continuing its pre-lawsuit practice of pointing to little specificity and vague details in support of requested monetary relief during conciliation.

Hospitality employers should understand that class actions – whether privately or agency-initiated, whether in the discrimination or wage-hour context – continue to be an epidemic from which they should protect themselves to the fullest extent possible.  While it is not possible for employers to ensure that disabled employees will never file charges, developing and following policies that engage in the interactive process and constructively discuss the possibility of reasonable accommodations is vital to minimizing the possibility of having to defend against would-be class actions.  Similarly, in order to reduce the possibility of facing class action lawsuits on other bases, hospitality employers should regularly monitor their policies, pay rates, benefits, and other company practices to ensure that they are consistently and uniformly applied to similarly situated employees.

EEOC Propounds Guidance on Use of Arrest and Conviction Records in Employment Decisions

By Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman, with Teiko Shigezumi

On April 25, 2012, the U.S. Equal Employment Opportunity Commission ("EEOC") issued an enforcement guidance document titled "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et. seq." (the "Guidance"), with respect to employers' use of arrest and conviction information in connection with employment decisions.

Disparate Treatment v. Disparate Impact

Although Title VII of the Civil Rights Act of 1964 ("Title VII") does not prohibit employers' use of criminal background checks, the Guidance reaffirms the EEOC's longstanding position that employers may violate Title VII if they use criminal background information improperly. The Guidance, which updates and consolidates existing EEOC guidance documents on the subject that have previously been left unchanged since 1990, focuses on employment discrimination based on race and national origin.

According to the EEOC, there are two ways in which an employer's use of criminal history information may violate Title VII. First, Title VII prohibits employers from engaging in "disparate treatment" discrimination – that is, treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin. Second, even where employers apply a criminal record exclusion under a neutral policy (e.g., uniformly excluding applicants based on certain criminal conduct), the exclusion may still operate to disproportionately and unjustifiably keep out people of a particular race or national origin. This is referred to as "disparate impact" discrimination. If the employer does not show that such an exclusion is "job related and consistent with business necessity" for the position in question, the exclusion is unlawful under Title VII.

Read the full advisory online

EEOC's Amended ADEA Regulation Raises the Bar for Employers' RFOA Defense

by Carrie Corcoran, Matthew T. Miklave, and Susan Gross Sholinsky

 The U.S. Equal Employment Opportunity Commission ("EEOC") has issued a long-awaited final rule ("Final Rule"), which amends the regulation on the "reasonable factors other than age" ("RFOA") defense available under the Age Discrimination in Employment Act ("ADEA"). The Final Rule is available at 29 C.F.R. Part 1625. The EEOC previously published proposed rules regarding the RFOA defense on March 31, 2008, and then on February 18, 2010. The Final Rule takes into account public comments received on those proposals.

Unfortunately for employers, the Final Rule was not worth the wait. The revised regulation, which takes effect on April 29, 2012, imposes rigorous procedural and factual requirements for employers when attempting to establish the reasonableness of a policy or practice that causes an age-based adverse impact.

Read the full advisory online

EEOC Continues to Challenge "Inflexible Leave" Policies and Reaches a $1.3 Million Settlement with Denny's

By:  Kara M. Maciel and Casey Cosentino

The U.S. Equal Employment Opportunity Commission (EEOC) continues its aggressive quest to challenge “inflexible” medical leave policies, as Denny’s Inc. agreed earlier this month to pay $1.3 million to settle a nationwide class action lawsuit. Denny’s also entered into an injunction barring its restaurants from future violations of the Americans with Disabilities Act (ADA), including denying disabled employees reasonable medical leave and retaliating against employees for bringing disability discrimination claims.

The EEOC filed the class action in 2009 in federal court in Maryland alleging, among other things, that Denny’s violated the ADA by enforcing a leave policy that automatically denied additional medical leave beyond a predetermined limit, even when the employee requested additional leave as a reasonable accommodation. This “inflexible” leave policy, common to many employers, led to the termination of the employees.

The Denny’s case represents the latest in the growing number of class action lawsuits brought by the EEOC against employers maintaining inflexible leave policies. For example, in January 2011, the EEOC settled a class action lawsuit for $3.2 million with the supermarket chain, Jewel-Osco. In 2009, the EEOC settled its largest ADA settlement to date of $6.2 million with a national retailer over similar claims. Several other cases remain pending with the EEOC. The EEOC believes that these policies prevent the employer and employee from engaging in an interactive process to determine the existence of reasonable accommodation as required by the ADA. Employers, therefore, face almost certain scrutiny from the EEOC for discharging an employee who cannot return to work after exhausting a predetermined period of leave and for failing to consider extending the leave as a reasonable accommodation.

In light of the Denny’s settlement and the EEOC’s unwavering position against inflexible leave policies, hospitality employers take the following steps:

  • Amend fixed leave policies that rigidly adhere to automatic medical or disability leave limits;
  • Evaluate each employee’s leave request on a case-by-case basis;
  • Train managers on the importance of the interactive process under the ADA and the need for a reasonable accommodation; and
  • Document all requests for reasonable accommodations and steps taken during the interactive process. 

Prudent hospitality employers will not wait for a charge or lawsuit to review their policies in light of the aggressive EEOC enforcement efforts.