Last Call! Third Circuit Court of Appeals Rules That Employer Can Terminate Employee For Violating Strict No Alcohol Return to Work Agreement

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick's Labor & Employment Practice Group in Scranton, Pennsylvania.

The Third Circuit Court of Appeals recently issued a decision holding that an employer's termination of an employee for violating a very broad and restrictive return to work agreement (RWA), which prohibited the employee from all drug and alcohol use during both work and personal time, was lawful.

In that case, Ostrowski v. Con-Way Freight, Inc., the employer maintained strict drug and alcohol screening policies, in compliance with federal motor carrier safety regulations issued by the Department of Labor, as well as an Employee Assistance Program. The employee, a Driver Sales Representative, requested a leave of absence under the Family and Medical Leave Act (FMLA) in order to voluntarily participate in a treatment program for alcoholism, which the employer approved. Following completion of his treatment program, the employee returned to work subject to a strict RWA by which he agreed to remain "free of drugs and alcohol (on company time as well as off company time) for the duration of [his] employment." Within only a month of his return to work, the employee relapsed and resumed drinking alcohol, leading him to once again admit himself into a treatment program. At that time, the employer terminated the employee for violating the RWA.

The employee filed a lawsuit in federal court claiming that his termination violated the Americans with Disabilities Act (ADA), the Pennsylvania Human Relations Act (PHRA) and the FMLA. More specifically, the employee alleged claims of disability discrimination, retaliation and failure to accommodate his disability under the ADA and PHRA and claims of retaliation, interference and unlawful denial of FMLA-protected leave. The District Court granted summary judgment in favor of the employer on all claims; the employee then appealed to the Third Circuit Court of Appeals.

In support of his ADA and PHRA claims, the employee argued that his violation of the RWA could not serve as a legitimate basis for termination because the RWA itself ran afoul of the ADA's prohibition against applying employment qualification standards, tests or other selection criteria that screen out or tend to screen out an individual with a disability. In rejecting this argument, the Third Circuit agreed with court decisions in other jurisdictions, concluding that a return-to-work agreement which imposes employment conditions different from those applied to other employees does not necessarily violate the ADA. While acknowledging that the RWA did impose standards different than those applied to the employee's co-workers, the court observed a nuanced but critical distinction that the difference in treatment resulted from the terms of the agreement rather than disability discrimination.

In addition, the court noted that the employee failed to demonstrate how the RWA subjected him to discrimination based on his alleged disability (alcoholism) as opposed to regulating his conduct (drinking alcohol). In this regard, the court reasoned that the RWA did not restrict or preclude individuals who may suffer from alcoholism from working for the employer, but simply prohibited an employee subject to its terms from drinking alcohol.

The court concluded, therefore, that because the RWA was not invalid under the ADA, the employee's violation of its terms was a legitimate, non-discriminatory reason for the employer to terminate his employment. Moreover, because the employee failed to produce any evidence that his termination based on violation of the RWA was a pretext for disability discrimination, summary judgment dismissal of his ADA and PHRA claims was warranted.

The court also rejected the employee's FMLA claims for similar reasons. More specifically, the court concluded that there was no evidence to suggest that the employee was terminated for requesting medical leave or for any reason other than his violation of the RWA. The court noted that there was no evidence to suggest that the employee would not have been terminated for violating the RWA if he had not requested FMLA leave. Moreover, the court rejected the employee's argument that the RWA's strict no alcohol requirement violated the FMLA because it had the effect of chilling and discouraging his right to request benefits and protections under the FMLA. The Court noted that the employer requested the RWA for a legitimate business reason, namely, pursuant to its obligations under DOT regulations to maintain strict drug and alcohol policies for covered employees. In our opinion, an employer that is not directly subject to DOT regulations presumably would also have the ability to impose a reasonable return to work agreement following an employee's leave for alcohol or drug treatment, particularly if there are clear and established drug and alcohol policies in place prior to requiring such an agreement.

This decision was issued by the Third Circuit as a non-precedential (non-binding) decision. Nonetheless, the decision provides valuable insight and serves as a good indicator of how the Third Court and district courts within our jurisdiction will rule in future cases on this same issue. This case illustrates that carefully drafted and tailored return to work agreements can be used by employers to manage problematic employee conduct. Such conduct, if left unattended, can turn into lengthy and recurring ordeals that become costly, frustrating and drain valuable company resources. A suitable return to work agreement may be a very good option in certain cases. Beware, however, that not all return to work agreements are created equal. It is advisable, therefore, that counsel should be consulted in advance to ensure that any return to work agreement under consideration is properly drafted to protect the employer's interests and legally compliant to the fullest extent possible.
 

DOL Issues Guidance on Definition of "Son or Daughter" under FMLA

This post was contributed by Tony D. Dick, Esq., an Associate in McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

The Department of Labor (DOL) recently issued additional guidance to employers regarding the definition of “son or daughter” under the Family Medical Leave Act (FMLA) as it relates to an adult child. Under the FMLA, an eligible employee may take leave to care for a son or daughter who is 18 years old or older if the following four conditions are met: (1) the adult child has a disability as defined by the Americans with Disabilities Act (ADA); (2) he or she is incapable of self-care as a result of the disability; (3) he or she has a serious health condition; and (4) the adult child is in need of care due to the serious health condition.

A lingering question has been whether the onset of the child’s disability had to occur prior to the child turning 18 in order for the adult child’s parent to be eligible for FMLA leave. DOL has now clarified that it is irrelevant whether the onset of the disabling condition occurred before or after the child turned 18. DOL’s interpretation falls in line with the majority of courts that have decided the issue.

In addition, in light of the broader definition of “disability” under the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), DOL has offered further guidance on the impact of those changes on the FMLA. Among other things, the ADAAA broadened the definition of “major life activities” and expanded the definition of “disability” to include episodic conditions that periodically flair up and substantially limit a major life activity. Since the FMLA’s inception, DOL has utilized the definition of disability under the ADA in defining a “son or daughter” who has reached the age of 18. DOL has now explicitly taken the position that the expanded definition of disability under the ADAAA should apply to the definition of “son or daughter” under the FMLA.  It remains to be seen whether courts will adopt DOL’s position.

Finally, DOL has issued guidance concerning FMLA leave used to care for an adult child who has become disabled during military service. Under the FMLA’s military caregiver provision, a parent of a covered service member who sustained a serious injury or illness is entitled to up to 26 weeks of FMLA leave in a single 12-month period. Acknowledging that the servicemember’s injury or illness could have an impact that lasts beyond the single 12-month period covered by the military caregiver leave entitlement, DOL clarified that the servicemember’s parent may take FMLA leave to care for a son or daughter in subsequent years because of the adult child’s serious health condition. 

DOL’s recent guidance is just the latest example of it construing the FMLA generously in favor of employees. Employers should train managers and HR personnel who handle leave requests on these new changes to ensure compliance with the law.

EEOC Issues Guidance on Potential Application of Title VII and ADA to Employees Who Have Experienced Domestic Violence, Sexual Assault, or Stalking

This post was contributed by Tony D. Dick, an Associate in McNees Wallace and Nurick LLC's Labor and Employment Group in Columbus, Ohio.

The Equal Employment Opportunity Commission (EEOC) recently issued a “Questions and Answers” sheet emphasizing that although Title VII and the Americans with Disabilities Act (ADA) do not expressly prohibit employers from discriminating against the victims of domestic violence, sexual assault, or stalking, these laws may create liability for employers in certain circumstances. For instance, employers may be liable under Title VII for treating such victims less favorably based on sex or sex stereotypes or for permitting sexual harassment against these individuals. Likewise, denying a reasonable accommodation to an employee with a violence-related disability or permitting different treatment of an employee with a disability stemming from an incident of domestic violence or sexual assault may violate the ADA. The document provides a number of illustrative examples of these potential pitfalls facing employers:

 

 

Title VII – Disparate Treatment Based on Sex

  • An employer terminates an employee after learning she has been subjected to domestic violence, saying he fears the potential “drama battered women bring to the workplace.”
  • An employer allows a male employee to use unpaid leave for a court appearance in the criminal prosecution of an assault, but does not allow a similarly-situated female employee to use equivalent leave to testify in the criminal prosecution of domestic violence she experiences. The employer says the assault by a stranger is a “real crime,” whereas domestic violence is “just a marital problem” and “women think everything is domestic violence.”

Title VII – Sexual Harassment

  • An employee's co-worker sits uncomfortably close to her in meetings, and has made suggestive comments. He waits for her in the dark outside the women's bathroom and in the parking lot outside of work, and blocks her passage in the hallway in a threatening manner. He also repeatedly telephones her after hours, sends personal e-mails, and shows up outside her apartment building at night. She reports these incidents to management and complains that she feels unsafe and afraid working nearby him. In response, management transfers him to another area of the building, but he continues to subject her to sexual advances and stalking. She notifies management but no further action is taken.

Title VII - Retaliation

  • An employee files a complaint with her employer's human resources department alleging that she was raped by a prominent company manager while on a business trip. In response, other company managers reassign her to less favorable projects, stop including her in meetings, and tell co-workers not to speak with her.


ADA – Disparate Treatment Based on Disability

  • An employer searches an applicant's name online and learns that she was a complaining witness in a rape prosecution and received counseling for depression. The employer decides not to hire her based on a concern that she may require future time off for continuing symptoms or further treatment of depression.

ADA – Failure to Accommodate Disability

  • An employee who has no accrued sick leave and whose employer is not covered by the FMLA requests a schedule change or unpaid leave to get treatment for depression and anxiety following a sexual assault by an intruder in her home. The employer denies the request because it "applies leave and attendance policies the same way to all employees."
  • In the aftermath of stalking by an ex-boyfriend who works in the same building, an employee develops major depression that her doctor states is exacerbated by continuing to work in the same location as the ex-boyfriend. As a reasonable accommodation for her disability, the employee requests reassignment to an available vacant position for which she is qualified at a different location operated by the employer. The employer denies the request, citing its "no transfer" policy.

Additional examples are provided in the document. It is worth the read. Employers should make their supervisors and managers aware of these potential issues so that they can identify them and take appropriate action when they arise.
 

Federal Appeals Court Gives Wellness Program a Clean Bill of Health

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Law Group.

Employers and wellness advocates have long been confounded by the complex gauntlet of federal laws and regulations that must be considered when structuring wellness programs. HIPAA's non-discrimination requirements, the Genetic Information Nondiscrimination Act ("GINA") and, perhaps most daunting, the Americans with Disabilities Act ("ADA") are among the laws that come into play when an employer is considering its wellness plan options.

Perhaps the most closely watched legal issue concerning wellness programs is this: May an employer offer a health coverage premium discount to those employees who complete a "health risk assessment" ("HRA")? Or, put another way, may employees who choose not to complete an HRA be subject to a premium surcharge? HIPAA regulations clearly allow employers to offer "bona fide wellness programs" with limited premium discounts; however, tying a discount to completion of an HRA presents a potential rub under the ADA. 

Under the ADA, an employer may only require current employees to submit to medical inquiries or examinations that are "job-related and consistent with business necessity." Accordingly, an employer may not ask a current employee to provide medical information unless there is a legitimate basis to suspect that the employee's medical condition may prevent him from safely performing his job. In light of this restriction, employee advocates have argued that tying a premium discount to completion of an HRA is an impermissible inquiry under this standard. To date, the Equal Employment Opportunity Commission has not taken a clear position on this issue. However, Commission representatives have stated that GINA would prohibit any financial incentive that is tied to a participant's disclosure of genetic information (e.g. family medical history).

Lacking any guidance from the EEOC on the issue, employers have carefully watched one well-publicized federal court case that was filed in Florida in 2010. In Seff v. Broward County, the County implemented a wellness program that consisted of four components: 1) a biometric screening (i.e. finger stick for glucose and cholesterol); 2) disease management for five specified conditions; 3) an online HRA; and 4) a $20 bi-weekly charge for employees who participated in the health plan but who did not participate in the wellness program.

Bradley Seff and a group of County employees filed a class action suit alleging that the County's $20 charge to non-participants violated the ADA's prohibition against non-job related medical examinations and inquiries. After the case was dismissed by the trial court, Seff and his cohorts appealed to the U.S. Court of Appeals for the Eleventh Circuit.

In a decision dated August 20, 2012, the Eleventh Circuit upheld the trial court's dismissal of the case. The court observed that the ADA contains a “safe harbor” provision exempting certain insurance plans from the ADA's restrictions on medical examinations and inquiries. The safe harbor provides that the ADA shall not be interpreted to prohibit an employer from "establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks" so long as the terms are consistent with state law. Agreeing with the trial court, the Eleventh Circuit found that Broward County's wellness program qualified as a "term of a bona fide benefit plan" under the safe harbor provision. Accordingly, the limitations on medical examinations and inquiries did not apply to the wellness program.

Although the Eleventh Circuit's decision should come as welcome news for employers and wellness advocates, there are several reasons not to overstate the importance of the decision. First, the Eleventh Circuit has jurisdiction over only Alabama, Florida and Georgia; courts in other states may rule differently. Secondly, the Court based its decision on the fact that the County offered its wellness program as a term of its health plan; the County's carrier sponsored the wellness program as part of its contract to provide coverage, and the program was only available to plan enrollees. The Court may have ruled differently if the County's wellness program was offered independent of its group health plan. Finally, the EEOC may or may not agree with the Seff decision– employers outside of the Eleventh Circuit should continue to monitor the Commission's position on this issue.

Until the EEOC issues guidance or other courts rule on the issue, the practice of tying premium discounts to HRAs will continue to be debated. However, the Seff decision is certainly a favorable development for employers. We will keep you apprised of further developments through our blog.

EEOC Targets Employers' Leave of Absence and Attendance Policies

Does your company’s leave policy call for an employee’s termination following the expiration of his or her leave entitlement?  Does your company charge “attendance points” against employees regardless of the reason for the absence?  Does your company require employees to be released to work without restrictions before they are permitted to return from a medical leave?  If so, beware: “inflexible” leave of absence and attendance policies are being targeted by the Equal Employment Opportunity Commission (“EEOC”) and plaintiffs under the Americans with Disabilities Act (“ADA”). 

Recently, McNees Wallace & Nurick LLC's Labor and Employment Group developed and distributed an Employer Alert warning employers about the risks in these areas and providing valuable guidance.  To read the Employer Alert click here

EEOC Issues Final Regulations Implementing the ADAAA

On March 24, 2011, the Equal Employment Opportunity Commission (EEOC) issued the final version of the regulations (pdf) implementing the Americans with Disabilities Act Amendments Act (ADAAA).  The final regulations were modified as compared to the EEOC's initial proposed regulations, and the changes to the regulations made will likely be welcomed by employers.  For more information from the EEOC on the ADAAA please click here.

Even with the changes, the regulations make clear that the ADAAA broadened the definition of disability under the Americans with Disabilities Act (ADA).  Under the ADAAA that far more impairments will now meet the definition of disability.  Importantly however, the regulations state that whether or not an individual has a disability will still be determined on a case-by-case basis. 

The ADAAA and the regulations attempt to shift the focus in ADA claims from whether or not an individual has a disability to whether or not prohibited discrimination has occurred.  As a practical matter for employers, this approach will shift the focus to the interactive process and the information exchanged during that process. 

The Internet - The Next Frontier for the ADA: Will Your Website Comply?

Members of McNees Wallace & Nurick LLC's Litigation Group published a Litigation Newsletter that contains an article that may be of interest to readers of our blog. The article, "The Internet – The Next Frontier for the ADA: Will Your Website Comply?" discusses a recent notice issued by the Department of Justice, which indicates that the Department is considering adopting accessibility guidelines for websites under the Americans with Disabilities Act.

Please click here to view the Litigation Newsletter.
 

New ADA Public Accommodation Regulations Provide a Good Opportunity for Businesses to Review Their Policies and Procedures

This post was contributed by Anthony D. Dick, Esq., an Associate and a member of McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

Most employers have at least some basic understanding of the Americans with Disabilities Act’s (ADA) prohibition against discrimination on the basis of an employee’s disability. Fewer are aware that the ADA contains separate provisions concerning public accommodation requirements for businesses open to the public. In its most basic form, Title III of the ADA requires virtually all facilities open to the public - including restaurants, hotels, motels, retailers, medical facilities, health clubs, museums, libraries, parks, day care facilities and entertainment venues - to remove architectural and communications barriers from their facilities to ensure access to persons with disabilities. The driving force behind the statute is to allow persons with disabilities to participate equally in the goods and services offered by places of public accommodation.

In conjunction with the 20th anniversary of the ADA’s enactment, the Department of Justice recently rolled out several new revisions to the ADA public accommodation regulations. In implementing the new regulations, the Department of Justice has made clear that the new standards should be viewed as “more than incremental changes” to the previously applicable 1991 standards. To that end, in many ways, the new regulations create heightened accessibility requirements for public accommodations.

It is important to note that the new rules contain a “safe harbor” provision. Covered entities that were built or altered in compliance with the 1991 standard will not be required to comply with the 2010 standards unless or until existing facilities are altered in the future. However, new requirements that were not a part of the 1991 standards are not subject to the safe harbor provision. Businesses should begin planning now to achieve compliance with the 2010 standards with regard to these new elements.

The new regulations modify the 1991 standards with respect to single toilet user rooms, reach ranges, assembly areas, common use circulation paths in employee work areas, fitting rooms, disbursement of accessible guest rooms in places of public lodging, accessible parking, urinals, and sales and service counters – just to name a few. Additionally, the new regulations address a number of brand new accommodation requirements for golf and miniature golf courses, amusement park rides, playgrounds, swimming pools, exercise equipment and other public accommodations.

The latest regulations targeting barriers to places of public accommodation specifically include the following:

Service Animals
The new ADA regulations now make clear that only dogs (and in limited circumstances miniature horses) can act as service animals. To qualify as a service animal, the dog must be individually trained to do work or perform tasks for the benefit of a disabled individual. Under the new rules, animals that merely provide emotional support and comfort to their owners do not qualify as service animals. The new rules also contain provisions regarding what questions a provider of a public accommodation may ask a person purporting to be with a service animal.

Wheelchair and Other Mobility Device Accessibility
The regulations mandate that public accommodations allow the use of wheelchairs and manually powered mobility aids in all areas open to the public. According to the new rules, public accommodations must also permit the use of “other power-driven mobility devices” (e.g. golf carts, Segways, etc.) unless they can show the use of such devices would create a safety hazard to others. The burden is on the provider of the public accommodation to show that the mobility device creates a safety hazard if it wishes to limit or exclude their use on the business’ premises.

Lodging Reservations
The regulations also contain new provisions that will have a significant impact on how hotels and other places of lodging do business. Key provisions include a requirement that hotels and other places of public lodging hold back accessible rooms until they are the last to sell. Additionally, handicap accessible rooms may no longer be double booked by hotel staff. Further, hotel reservation systems must identify the accessible features of the hotel and its guest rooms so that disabled persons may make an informed decision when choosing where to seek lodging.

Conclusion
The new regulations implementing the above-described changes are tedious and contain a multitude of caveats and intricacies. Business owners should sit down with legal counsel, designers and key personnel to develop a full understanding of the new regulations so that policies and practices can be appropriately modified to ensure ADA compliance. A failure to do so could lead to substantial expense in the form of avoidable lawsuits and civil penalties to the business.
 

 

Civil Rights Division Announces Plan to Target Public Employers

During his recent State of the Union Address, President Barack Obama confirmed the news that some employers feared. During his address, President Obama stated that the Civil Rights Division (CRD) of the Department of Justice (DOJ) will begin aggressively pursuing employment discrimination claims. The President's statement reiterated the CRD's December 2009 message to Congress that they will be increasing prosecution and litigation efforts in this area.

In December 2009, Thomas E. Perez, assistant attorney general for civil rights, announced the CRD's intention to file more class action "pattern or practice" discrimination suits against state and local governments. Class action suits involve large groups of plaintiffs, and the term "pattern or practice" refers to alleged widespread discrimination, typically when dealing with decisions involving new hires or promotions. In a typical case, the CRD will allege that an employment practice, such as a test or physical ability requirement, unlawfully discriminates against a certain protected class of individuals because fewer members of that class are selected. This makes public employers who hire large numbers of employees each year, for example prison guards or police officers, susceptible to discrimination claims based on latent defects in their selection methods or tests.

In addition to seeking a variety of remedial damages in these cases, such as priority hiring and reforming an organization's hiring and promotion procedures, the CRD also will pursue monetary damages. Mr. Perez also announced his intention to pursue other types of claims against employers, such as those arising Uniformed Services Employment and Reemployment Rights Act (USERRA), which protects reemployment rights of employees serving in the military. Mr. Perez also mentioned Project Civic Access, which seeks to enforce compliance with the public accommodation provisions of the Americans with Disabilities Act by sending investigators to evaluate state and local government facilities. The heightened focus on enforcement efforts already has begun to increase investigation, prosecution and litigation in each of these areas.

The CRD's renewed focus on vigorous enforcement and prosecution of cases, without any testimony regarding an actual increase in the number of violations, is consistent with the renewed focus on enforcement within the Department of Labor, the Equal Employment Opportunity Commission, and other federal agencies under the Obama Administration. State and local governments that come under investigation by the Department of Justice, the CRD, or any other federal government agency should seek legal counsel early in the process to ensure the investigation proceeds in a lawful manner and the potential damages available, if any, are limited.
 

Employment Law implications of Obesity and BMI after the ADA Amendments Act

The ADA Amendments Act re-wrote the definition of disability so that it will likely include obesity-related health conditions and perhaps obesity itself as a protected disability. Before the ADA Amendments, being overweight and even obese was not generally considered a "disability". For example in EEOC v. Watkins Motor Lines, Inc., a court determined that non-physiological morbid obesity was not a protected disability.

The EEOC is considering regulations regarding the equal employment provisions of the ADAAA.  In December 2008, the EEOC commissioners deadlocked along party lines on whether to approve former Chair Naomi Earp’s proposed regulations. According to the EEOC’s agenda, a notice of proposed rulemaking will be issued by August of this year.  I predict that obesity will become a protected disability requiring employers to reasonably accommodate the condition.  I also expect that the correlation between BMI and obesity will be challenged by agruing that disqualifying an employee based on a high BMI consistitutes "regarded as" disability discrimination.

The ADA changes have important implications for businesses including employment discrimination claims, health plan design, and wellness program administration. There are several issues that merit discussion when examining obesity such as following. 

What is Body Mass Index (BMI)? BMI has become the unofficial scientific measure for assessing obesity. BMI is a function of height and weight (BMI calculator). The Center for Disease Control classifies a person who has a BMI of less than 18.5 as underweight; normal is 18.5-24.9; overweight is 25-29.9; obese is over 30; and extremely obese is over 40.

What is the BMI analysis telling us about our weight? A Report by the Trust for America's Health recently disclosed statistics about obesity trends. In the Report, Pennsylvania had the 24th highest rate of adult obesity with 25.7 percent of its population having a BMI over 30. The Report correlated obesity figures with other factors like Diabetes and Hypertension rates. It also noted levels of admitted physical activity (or inactivity). Twenty-Four percent of Pennsylvanians admit no physical activity.

How good is BMI as a measure of obesity? Martica Heaner points out the limitations of BMI in her posts BMI Blues and Is Body Mass Index a Bad Measure?:

The BMI works well for research purposes, but doesn’t necessarily translate precisely to the individual. Unfortunately, it tends to convey that people that exercise regularly, for example, are overweight, when they are not actually overfat. A fit person tends to have more muscle, so their body weight is a reflection of body fat as well as muscle and other lean tissue.

Since the problem with being overfat is that health risks are increased, a BMI in the overweight range is probably not a negative indicator for a fit person. Regular exercise, low body fat and increased muscle mass are all factors that tend to outweigh any health risks suggested by a higher BMI.

Is there correlation between high BMI and bad health? According to the CDC, the BMI ranges were established based on the health consequences associated with obesity as determined by different BMIs. Some, like Paul Campos in his book, The Obesity Myth, challenge this conclusion. However, the correlation between high BMI and bad health is quickly becoming an assumption.

Other than being incorrectly labeled "overweight" or "obese", why should we care whether BMI is a accurate health status predictor? BMI is fast becoming the legal standard for determining whether someone is "obese" and therefore a "health risk". Those with high BMIs can face increase cost and eligibility barriers for certain employee benefits.

Individual insurance policies for life, disability and medical insurance almost universally use underwriting procedures that take into account BMI as a basis for determining insurability and premium. A survey by the Texas Office of Public Insurance Counsel found that insurance company individual health plan underwriting guidelines used BMI as a basis to deny coverage, charge a higher premium, and offer less coverage. The California Insurance Commission has made comments alerting consumers about BMI as a basis for insurance denial.

Some group health plans are community rated and not subject to medical underwriting. These plans calculate premium based on the expected claims of the community not the individual employer group. Other group health insurance programs can be subject to medical underwriting in which BMI analysis and other factors will be used to price the coverage for the group. An employer with a compliment of employees with potential for high claims (including high BMI) will face higher premiums or denial. Likewise, self-insured medical plans that utilize stop loss coverage may undergo medical underwriting where BMI will be factored into the rate for reinsurance.

Group health plan wellness program incentives may be keyed to BMI targets for premium discounts and other incentives. The availability of incentives to those with high BMI is subject to limitations including situations when it is "unreasonably difficult" or "medically inadvisable" for a participant to attempt to achieve the BMI standard.

Arbitration of Discrimination Claims upheld by U.S. Supreme Court

The United States Supreme Court upheld a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Accordingly, there is no legal basis for the Court to strike down an arbitration clause in a collective bargaining agreement, which was freely negotiated by a union and company, and which clearly and unmistakably requires employees to arbitrate the age-discrimination claims. However, the Court declined to rule on specific factual issued related to whether the waiver of discrimination claims under the contract by employees' in this case was clear and unmistakable. It also would not rule on whether the contract waived substantive rights protected by federal law which could not be vindicated in an arbitration. These issues were not properly before the Court.

The decision in 14 Penn Plaza LLC v. Pyett has important implications for unionized employers who face employment discrimination charges and lawsuits. These claims may be forced into the arbitration forum and out of court depending on the language in the contract. The scope of the arbitration clause including any limitations will be an important focus of future litigation.

Ledbetter Fair Pay Act passed by Senate and awaiting Obama Signature

The Senate passed the Lilly Ledbetter Fair Pay Act of 2009 by a vote of 61 to 36 with both Pennsylvania Senators supporting the legislation.   President Obama has previously stated he will sign the law.

The Ledbetter Fair Pay Act redefines the "accrual" of a compensation discrimination claim as follows:

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

Violations of the law entitle employees to recover compensatory and punitive damages including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.

The law is retroactive to the May 28, 2007 (the date of the Supreme Court's Ledbetter decision) effectively reviving all claims that are pending or after that date.

Forces employers to modify their pay practices and evaluation procedures including the following:

  • Better justify and document their compensation decisions.
  • Review promotion procedures which may fall under the law because of the attendant compensation adjustment.
  • Create an institutional memory that captures the basis for compensation and promotion decisions.
  • Design a record retention system that allows for the defense of claims.

Next on the Senate Agenda will likely be the Paycheck Fairness Act (S. 182).

Thanks to the Connecticut Employment Law Blog for insights.

ADA Amendments Act Compliance Tips

The ADAAA was effective January 1, 2009 requiring employers to focus their approach to disability accommodation. The Job Accommodation Network (JAN) of the Office of Disability Employment Policy recently published a compliance resource identifying four Practical Tips which can be expanded upon as follows:

Review Job Descriptions, Qualification Standards and Accommodation Procedures

Developing job descriptions is a daunting task for employer and many don't know where to start. JAN has a good resource explaining the role and function of job descriptions. The resource also gives some basic parameters on what should be included.

Job descriptions provide a written record of the qualification standards and essential functions of a position for the purpose of assessing whether and employee or applicant is "qualified" and for evaluating reasonable accommodations or establishing undue hardship. From a legal perspective, a well-written job description is essential to defending an ADA claim.

Written accommodation procedures promote communication and uniformity. The federal government has developed a lengthy process that may be a reference for employers developing a procedure. The government's procedures are extremely detailed and employers should be careful to develop a process which they can follow or they risk claims based on procedural missteps.

 

Focus Job Actions of Performance and Conduct

The ADAAA refocuses compliance from determining whether a disability exists to evaluating reasonable accommodations. Employers need to assess what an employee (i) can and cannot do in light of the job's essential functions or (ii) has or hasn't done under its work rules. The EEOC has issued Guidance on Applying Performance and Conduct Standards to Employees with Disabilities.

 

Train Frontline Supervisors and Managers

Many disability compliance problems start with a frontline supervisor's reaction to a performance problem. Dealing with the employee's disability, managing coworker reactions, and keeping medical information confidential are only some of the issues which confront managers. Comments made by supervisors can create claims based on retaliation or being "regarded as" disabled.

 

Document Actions and Decisions

A written record of an employers actions and decisions has many benefits in terms of both clear communication with employees and defense of ADA claims. The transitory nature of many workplaces make tangible records more important than ever to establish an institutional memory of important events.

 

Thanks to the Delaware Employment Law Blog for the pointing out the JAN resources.

Human Resources Legal Compliance Checklist for 2009

Human Resource Professionals face a demanding legal compliance year in 2009. The following five items should be added to your "To Do" list for the first quarter of '09:

ADA Amendments Act Compliance (effective 1/1/2009):  The amendments greatly expand the definition of disability refocusing compliance on determining whether the employee is "qualified" and evaluating reasonable accommodations. Employers should consider the following:

  • Revising job descriptions to define essential job functions and minimum qualifications.
  • Formalizing the interactive process for assessing disability issues.
  • Educating supervisors on the expanded ADA coverage.

E-Verify Registration and Immigration Compliance (effective 1/15/2009):  Government contractors and subcontracts may need to register for and use the E-Verify System for new and existing government contracts. Employers who may be covered should inventory their existing contracts and review prospective contracts and subcontracts to determine whether they are covered by the regulations.

U.S. Citizenship and Immigration Services (USCIS) has amended regulations governing the types of acceptable identity and employment authorization documents that employees may present to their employers for completion of the Form I-9, Employment Eligibility Verification. Under the interim rule, employers will no longer be able to accept expired documents to verify employment authorization on the Form I-9. There are other changes to the types of acceptable documents. Employers must use the revised Form I-9 (not yet issued) for all new hires and to re-verify any employee with expiring employment authorization beginning January 31, 2009. The current version of the Form I-9 will no longer be valid as of February 2, 2009.

 

FMLA Regulations Implementation (effective 1/16/2009):  Amendments to the FMLA's regulations require action by employers in the following areas:

EFCA and RESPECT Act Planning:  This pending legislation has enormous potential consequences for employers. Developing an action plan should include the following items:

Wage & Hour Self-Audit:  As evidenced by Wal-Marts recent record settlement, wage and hour lawsuits will play prominently in 2009. A self-audit of compliance practices can mitigate these claims particularly in the following areas;

  • Employee classification (exempt vs. non-exempt)
  • Off the clock work (starting times, breaks and meal periods)
  • Donning and Doffing
  • Child labor

ADA Amendments Act Webinar: December 4, 2008

Webinar Registration

Congress recently passed legislation amending the Americans with Disabilities Act, which will greatly expand the coverage of the Act.  On Thursday December 4, 2008, McNees Wallace & Nurick will host a 45 minute webinar to discuss these new changes to the ADA and what employers should know before the amendments take effect on January 1, 2009.  Please join Samuel N. Lillard and Michael A. Moore, attorneys with McNees Wallace & Nurick’s Labor & Employment Law Practice Group, as they tell you exactly what the new legislation means for employers and what your business should do to comply with the new amendments and avoid costly litigation.

Thursday, December 4, 2008 12:00 PM - 1:00 PM EST : Online Registration link here.

ADA Amendments may Open the Door for Nicotine Addiction Claims

Today’s smokers [are] more addicted to nicotine according to a new study, which notes that 73% of those trying to quit are “highly dependent”. The Center for Disease Control and Prevention estimates that 20.2% of Americans are smokers. Pennsylvania has a slightly higher rate of smoking at 21.5 % with 51.9% attempting to quit. Many of these smokers are also employees.

Smokers are feeling the heat in the workplace through smoke-free workplace policies. Jon Hyman at the Ohio Employer’s Law Blog has a post asking Are there legal risks with smoking bans?  He notes that pushing back on these employer initiatives are  29 states which have enacted laws protecting employees who smoke from discrimination.

Pennsylvania has no law protecting smokers from discrimination. To the contrary, Pennsylvania’s new Clean Indoor Air Act mandates smoke-free workplaces and precludes employees from smoking indoors. However, the law allows employers to prohibit smoking anywhere on company property; it does not prevent the continuation of outdoor smoking areas. Employers are left with the sometimes delicate task of crafting a policy concerning outdoor smoking and monitoring the break schedules of employees who wish to smoke. In addition, many wellness programs have targeted smoking with cessation programs coupled with both financial incentives and penalties.

The Americans with Disabilities Act was recently amended to expand the definition of “disability” to the point that it may encompass nicotine addiction. The few ADA cases on “smoking” as a disability have not recognized a claim based on the pre-amendment definition of disability. However, the rationale for denying disability status to “smoking” or “nicotine addiction” is squarely predicated on the remedial nature of the condition exempting it from coverage of the ADA as expounded in Sutton v. United Airlines, Inc. The ADA Amendments expressly abrogated Sutton.  In the only published case of which I am aware, the court in Brashear v. Simms set forth the following rationale in dismissing a smoker’s ADA claim:

…[E]ven assuming that the ADA fully applies in this case, common sense compels the conclusion that smoking, whether denominated as “nicotine addiction” or not, is not a “disability” within the meaning of the ADA. Congress could not possibly have intended the absurd result of including smoking within the definition of “disability,” which would render somewhere between 25% and 30% of the American public disabled under federal law because they smoke. In any event, both smoking and “nicotine addiction” are readily remediable, either by quitting smoking outright through an act of willpower (albeit easier for some than others), or by the use of such items as nicotine patches or nicotine chewing gum. If the smokers' nicotine addiction is thus remediable, neither such addiction nor smoking itself qualifies as a disability within the coverage of the ADA, under well-settled Supreme Court precedent.

Pennsylvania employers can and must adopt policies prohibiting smoking in the workplace. However, employers may well be required to reasonably accommodate nicotine-addicted employees much as they would need to do so with other addictions, like drugs and alcohol. The scope of such accommodations must be explored. Section G of the EEOC’s Guidance on Applying Performance Standards to Employees with Disabilities may prove helpful.

 

UPDATE:  How will this new wrinkle weigh in the mix: Under Obama will smoking become  "cool" again?

ADA Amendments expand Disability Coverage

President Bush will sign legislation amending the Americans with Disabilities Act, which overwhelmingly passed through Congress. The ADA Amendments Act is designed to convey Congressional intent that “the primary object of attention in cases brought under the ADA should be whether entities covered under the ADA have complied with their obligations, and to convey that the question of whether an individual’s impairment is a disability under the ADA should not demand extensive analysis.”

The goal of expanding the coverage of the ADA is achieved by changing the definition of “disability” to:

  • Prohibit the consideration of measures that reduce or mitigate the impact of impairment—such as medication, prosthetics and assistive technology—in determining whether an individual has a disability under the law.
  • Cover workers whose employers discriminate against them based on a perception that the worker is impaired, regardless of whether the worker has a disability.
  • Clarify that the law provides broad coverage to protect anyone who faces discrimination on the basis of a disability.

Congress expressly reversed several Supreme Court decisions that restricted the scope of the ADA. Congress rejected the standard that ameliorative effects of mitigating measures must be considered in determining whether a person is disabled found in Sutton v. United Air Lines, Inc. Congress also rebuked the Court in its restrictive interpretation of “disability” by rejecting the terms “substantially limits ” and “significantly restricted” because the terms as outlined in Toyota Motor Mfg, Kentucky, Inc. v. Williams are too narrow.

 

The ADA amendments will  refocus disability discrimination lawsuits downplaying the examination of whether an employee meets the definition of disability.  Daniel Schwartz of the Connecticut Employment Law Blog discusses the practical impacts.

EEOC Guidance Addresses Employee Performance and Conduct Issues Under the ADA

On September 3, 2008, the EEOC issued "a comprehensive question-and-answer guide addressing how the Americans with Disabilities Act (ADA) applies to a wide variety of performance and conduct issues."  The guidance contains a brief introductory section that includes some general legal requirements and definitions and then sets forth 30 questions and answers on various ADA-related subjects, including performance, conduct, and attendance issues, dress codes, drug and alcohol use, and confidentiality. Included within the EEOC's answers are numerous points of generally applicable "practical guidance."

The EEOC's new guide does not have the legal effect of federal regulations or change the ADA's existing accommodation and discrimination requirements. It does, however, contain a useful resource on an often difficult and complicated issue, namely what to do when an employee's performance or conduct problems may be, or are, caused by a disability. Among the guidance provided by the EEOC are the following:

 

Job Performance

 

  • An employee with a disability may be required to meet the same production standards, whether quantitative or qualitative, as a non-disabled employee in the same job. Lowering or changing a production standard because an employee cannot meet it due to a disability is not considered a reasonable accommodation.  However, a reasonable accommodation may be required to assist an employee in meeting a specific production standard.
  • An employer should evaluate the job performance of an employee with a disability the same way it evaluates any other employee’s performance.
  • If an employer gives a lower performance rating to an employee, and the employee responds by revealing she has a disability that is causing the performance problem, the employer still may give the lower rating. If the employee states that her disability is the cause of the performance problem, the employer should follow up by making clear what level of performance is required and asking why the employee believes the disability is affecting performance. If the employee does not ask for an accommodation, the employer may ask whether there is an accommodation that may help raise the employee’s performance level.
  • Ideally, employees will request reasonable accommodation before performance problems arise, or at least before they become too serious. Although the ADA does not require employees to ask for an accommodation at a specific time, the timing of a request for reasonable accommodation is important, because an employer does not have to rescind discipline (including a termination) or an evaluation warranted by poor performance.

Conduct Problems

 

  • If an employee’s disability does not cause the misconduct, an employer may hold the individual to the same conduct standards that it applies to all other employees. In most instances, an employee’s disability will not be relevant to any conduct violations.
  • If an employee’s disability causes a violation of a conduct rule, the employer may discipline the individual, if the conduct rule is job-related and consistent with business necessity and other employees are held to the same standard. The ADA does not protect employees from the consequences of violating conduct requirements, even where the conduct is caused by the disability.

Attendance

  • An employer may have to modify its attendance policies for employees with a disability as a reasonable accommodation, absent undue hardship.
  • Although employers may have to grant extended medical leave as a reasonaable accommodiation, they have no obligation to provide leave of indefinite duration.  Granting indefinite leave, like frequent and unpredictable request for leave, can impose an undue hardship on an employer's operations.

Business Websites Face Americans with Disabilities Act Accommodations Claims

Target Corp. has agreed to pay $6 million in damages to plaintiffs in California unable to use its online site as part of a class action settlement with the National Federation of the Blind. The issue centers on the Americans with Disabilities Act’s requirements that retailers and other public places to make accommodations for people with disabilities. Target had argued that the ADA covered only physical spaces. The California court held that the ADA covers an online retailer’s website. Websites can be made more accessible through screen-reading software that converts text into speech for visually impaired access. The court certified the case as a class action before it settled.

The case has important implications for retailers who may now face class action lawsuits. Employers that rely on a web-based application and recruiting processes should also examine their websites for compliance with the ADA’s employment provisions which require accessibility and accommodation in the hiring process.   A recent OFCCP Directive sets forth the agency's policy on review of employer websites where applications are solicited:

Effective immediately, all compliance evaluations shall include a review of the contractor's online application systems to ensure that the contractor is providing equal opportunity to qualified individuals with disabilities and disabled veterans. The review should include whether the contractor is providing reasonable accommodation, when requested, unless such accommodation would cause an undue hardship. In this directive, the term "online system" shall include, but not be limited to, all electronic or web-based systems that the contractor uses in all of its personnel activities.