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Disability, Leave & Health Management Blog

Offering Practical Guidance to Employers

Voters Approve Paid Sick Leave Laws in Three Cities and Massachusetts

“Elections have consequences” goes the maxim and one of the consequences of the November 4 election is that employers in four additional jurisdictions have paid sick leave laws (PSL) to consider.  The margin of approval suggests that PSL laws are widely supported by the electorate.

Massachusetts becomes the third state to enact a PSL, following Connecticut and California.  60% of Massachusetts voters approved the law.  For additional information on the Massachusetts law, click here.

Voters in Trenton, NJ and Montclair, NJ also approved PSL laws by wide margins, 85% in Trenton and 75% in Montclair.  With these two additions, eight municipalities in New Jersey have enacted a PSL law.

81% of Oakland, CA voters also approved a PSL law, making it the fourth California city to adopt such an ordinance. San Francisco, Long Beach and San Diego are the other three cities in California with a PSL law. (While the San Diego ordinance had been passed by the legislature, because enough signatures to repeal it had been filed, voters will decide in June 2016 whether it will be enacted.)  The Oakland PSL ordinance was joined with a proposed increase in the minimum wage, which likely added to its popular appeal.

In March 2013, we posted about a developing “mega leave-and-attendance patchwork” of paid sick leave laws. At the time, five jurisdictions had PSL laws. Now, a bit more than a year and a half later, 19 jurisdictions have PSL laws.  Twelve were enacted in 2014 alone. Be assured that more jurisdictions will pass PSL laws.

As we have said, the PSL patchwork challenge has nothing to do with the social question of whether there should or should not be paid sick days. The challenge is the proliferation of leave and attendance laws and the lack of guidance about how these PSL law interact with them. For example, how do these PSL laws interact with state and federal family and medical leave laws, disability discrimination laws, and the myriad of other laws that grant leave for various reasons, some of which are also listed in the PSL laws. The ordinances are silent on that issue.

Court Denies EEOC Request for TRO in Wellness Lawsuit

As we posted last week, the EEOC not only sued Honeywell, alleging that its wellness program violated both the ADA and GINA, but sought a temporary restraining order (TRO) barring Honeywell from implementing the surcharges and other financial “penalties” in its wellness plan. The EEOC had alleged that the penalties in the plan were so large that it transformed the voluntary plan into an involuntary plan, which violates the ADA and GINA.

Today, after an oral argument on the EEOC’s motion for a TRO, Judge Ann D. Montgomery of the U.S. District Court for the District of Minnesota denied the EEOC’s TRO request.  In a crowded courtroom, the judge ruled from the bench that the EEOC had not established both that there would be irreparable harm if Honeywell were not enjoined from implementing its program and that it was entitled to the TRO after a balancing of the harms to the parties. Judge Montgomery did not address the EEOC’s likelihood of success in the litigation.

We have noted in previous posts that waiting for the EEOC to give some idea on what it believes to be acceptable incentives in a wellness plan is like waiting for Becket’s Godot. Today, Judge Montgomery asked the EEOC the question the corporate wellness world has been waiting for much more than a decade to ask: “At what point does a monetary penalty result in a compulsion?”  The EEOC responded that the agency cannot draw a clear line but that Honeywell had crossed it. At least three times during the oral argument, the Court pressed the EEOC to define the point at which voluntary wellness plan becomes involuntary because of the penalties involved. Each time, the EEOC responded that it cannot draw a line but that Honeywell had crossed it.

Of all days that one might anticipate the EEOC to give some idea of what would be acceptable parameters for wellness plan incentives, today was that day–a day in court on the EEOC’s request for a TRO, an extraordinary remedy, in an action brought with extraordinary speed. Alas, like Godot, the guidance did not come.  In contrast, Honeywell pointed to the clear guidance on acceptable incentives for wellness plans and acceptable employee contributions  in the Affordable Care Act.  Honeywell also argued that whether its wellness program was voluntary was irrelevant since it was protected by the ADA “safe harbor” for insurance plans.

EEOC Files Third Lawsuit Challenging Employer Wellness Plan

After staying on the litigation sidelines for years while the popularity of workplace wellness programs skyrocketed, the EEOC has brought its third lawsuit in about two months, alleging that the employer’s wellness program was not “voluntary” due to the “large” and “substantial” penalties to those who chose not to participate. Because the program was involuntary, the disability related inquiries and medical examinations within the program violated the ADA, according to the EEOC. EEOC v. Honeywell International, Inc. (D.MN, filed October 27, 2014.).

The lawsuit also alleges that Honeywell’s wellness program violates GINA’s proscription against providing inducements to an employee to obtain that employee’s family medical history. According to the EEOC, by penalizing an employee if the employee’s spouse does not participate in the program’s biometric screening, which could yield information related to conditions such as hypertension and diabetes, Honeywell’s program is providing a financial inducement to obtain genetic information. i.e., family medical history.

The EEOC is seeking a temporary restraining order enjoining Honeywell from imposing any penalty or cost on an employee who declines to participate in biometric testing or whose spouse declines to participate in such testing, and from providing any inducement to an employee’s spouse to participate in the testing.  The hearing on the temporary restraining order is next week.

We have posted previously about the EEOC’s two earlier lawsuits.  In those two lawsuits, according to the EEOC’s allegations, the penalty for not participating in the employer’s wellness program was that the employee needed to pay 100% of the health insurance premium, a penalty which the EEOC described as “steep,” “enormous,” and created “dire consequences.”

In the Honeywell case, according to the EEOC’s filing, employees who did not participate in the program would pay up to $3.500 in “direct surcharges” as well as lose “up to $1,500 in contributions” to the employee’s health savings account.

Honeywell’s press release concerning the lawsuit refers to the EEOC’s lawsuit as “frivolous” and states that its “wellness plan incentives are in strict compliance with both HIPAA and the ACA’s guidelines.” The company added that it is “disappointed that the EEOC would take a position that is so contrary to a fundamental component of the President’s health care plan, legislation passed by Congress, and the desire of all Americans to lead healthier lives.”

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“Dire Consequences” for Non-Participants Lead to Dire Consequences for Wellness Program under ADA, Claims EEOC Lawsuit

After staying on the litigation sidelines for years while the popularity of workplace wellness programs skyrocketed, the EEOC has brought a second lawsuit just six weeks after its first, alleging that the employer’s wellness program was not “voluntary” due to the “dire consequences” to non- participants. Because the program was involuntary, the disability related inquiries and medical examinations within the program violated the ADA, according to the EEOC’s press release about the lawsuit. EEOC v. Flambeau, Inc. (W.D.WI, filed October 1, 2014).

Under the defendant’s wellness program, employees who participated in biometric testing and completed a “health risk assessment” paid 25% of the medical insurance premium while those who declined to participate in the program needed to pay 100% of the premium and faced unspecified discipline for not attending the testing, according to the press release.

In its first wellness lawsuit, the EEOC also alleged that non-participants were required to pay 100% of the insurance premium, a penalty the EEOC described as “steep” and “enormous.” EEOC v. Orion Energy Systems, E.D. WI, filed August 20, 2014). See our post about that case here.

Some 94% of employers with over 200 workers and 63 percent of employers with fewer employees have a wellness program, notes the EEOC’s press release. The EEOC regulations and Interpretive and Enforcement Guidance permit employers to conduct medical examinations as part of a voluntary wellness program. For many years, the EEOC’s position has been that “[a] wellness program is ‘voluntary’ as long as an employer neither requires participation nor penalizes employees who do not participate.”  Just last year, the EEOC reiterated that it “has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether withholding of the award from non-participants constitutes a penalty, thus rendering the program involuntary.” By filing these two lawsuits, the EEOC has taken a very definitive position that any penalty it determines to be “steep,” or “enormous” or have “dire consequences” for non-participants would make an otherwise voluntary program involuntary. Earlier this year, the EEOC said that it plans to issue guidance this year concerning the amount of a reward/penalty allowed for a program to be “voluntary.”

 

New Jersey Considers Putting Kibosh on Local Leave Laws

Thanks to our colleague Luke P. Breslin for this post.

The New Jersey Assembly is considering a bill that would put the kibosh on local government efforts to require private employers to provide employees with paid sick leave.  This proposed legislation is a response to the fact that six New Jersey municipalities have enacted a “patchwork” of paid sick leave laws within the past year, while others are poised to do so. Numerous states have already passed “kibosh” laws, including Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee and Wisconsin.

Assembly Bill No. 3702 would prohibit counties, municipalities, or other political subdivisions of the State of New Jersey, or boards, commissions, departments, or agencies of any of these entities, from adopting any ordinance, rule or regulation requiring private employers to provide paid sick leave to their employees.  The bill does not propose such restraints on local or regional school districts.

The statement supporting the bill states that allowing leave laws to be adopted on a local level would lead to “patchwork regulation and place additional burdens on employers, stifling economic growth and job creation.”  Further, the bill would “make the State more economically competitive by providing greater consistency and predictability in employment rules.”

The six New Jersey municipalities which have enacted paid sick leave laws are Jersey City, Newark, East Orange, Irvington, Passaic, and Paterson. Montclair and Trenton appear poised to enact similar legislation soon.

Earlier this year, a state-wide paid sick leave law was proposed in the New Jersey Assembly; however, this bill appears to have stalled in the Assembly Labor Committee. California and Connecticut are the only two states requiring employers to provide paid sick leave.

Given what appears to be overwhelming support for paid sick leave laws in New Jersey’s largest cities, whether New Jersey will pass this bill and join the ranks of “kibosh states” is unclear. Nevertheless, it adds to the debate about whether paid sick leave laws should continue to be enacted on a piecemeal, patchwork-type basis, or whether they should be enacted on a broader, more uniform basis.

Mega-Patchwork of Paid Sick Leave Laws Here and Growing!

Eighteen months ago, we posted about the developing patchwork of state and local paid sick leave (PSL) laws.  I urged readers to squint a bit out over the leave-and-attendance law horizon to see this patchwork taking shape. Eighteen months later, there’s no need to squint. The patchwork is very visible, and growing.

Eighteen months ago, Connecticut was the only state with a PSL law. California recently became the second state (for more information on that law, see here).   The New Jersey Assembly will be considering PSL law this month; Massachusetts voters will have a referendum on a PSL law in November.

Eighteen months ago, there were four municipalities with PSL laws (San Francisco, Seattle, Portland, OR and District of Columbia). Now there are eleven. Added were San Diego, Eugene, OR, Newark, Jersey City, Passaic, East Orange, and Paterson, NJ), Numerous other municipalities—including more in New Jersey—are considering PSL laws.

As we have noted repeatedly, the patchwork challenge has nothing to do with the social question of whether there should or should not be paid sick days. The challenge is the proliferation of leave and attendance laws and how they interact with each other. For example, does the time off under paid sick day laws run concurrent with time off under these other leave-and-attendance laws or is it “stacked” on top of those laws?

With 50 states and more than 39,000 municipalities in the United States, this patchwork is destined to grow and, if the current pace continues, to grow rapidly. .

Ford Motor ADA Telecommuting Case Still Running

A few months ago, I posted my fourth and what I then called my “final” blog on the Sixth Circuit’s significant ADA decision in EEOC v. Ford Motor Company.  I had never posted four blogs about a decision. But that “final” blog has turned out not to be “final” because on August 29, 2014, a majority of the judges on the Sixth Circuit voted to rehear the case en banc. The Court’s Order vacates the previous opinion by a panel of the Sixth Circuit and restores the case to the appeals docket.  Not only is this the fifth blog about the case, but there is at least one more to come when the Sixth Circuit issues its en banc decision.

Why is this case so important? Some of the reasons include:

  • Because it deals with the nature and scope of the telecommuting accommodation, i.e., working at home.  The individual on whose behalf this case was brought sought to work at home up to four days per week.  See blog post here.
  • Because the Sixth Circuit, in a 1997 decision, said that it would be an “unusual” case for an employee seeking to telecommute as a reasonable accommodation to survive summary judgment, but in the panel decision earlier this year, said that “given the state of modern technology, it is no longer the case that jobs suitable for telecommuting are “extraordinary” or “unusual.”  Whether such an accommodation is “extraordinary” or not is important to employers.
  • Because it deals with the employer’s role in deciding whether physical presence at work is an essential job function. The panel decision noted that due to the advance of technology, the workplace can no longer be assumed to mean the employer’s physical location, and “that the ‘workplace’ is anywhere that an employee can perform her job duties.”
  • hereBecause the Supreme Court of the United States in US Airways v. Barnett adopted a two-step analysis to determine whether an accommodation is reasonable and the panel decision does not discuss this analytical framework. The two steps are: that an employee must prove that a requested accommodation is reasonable “in the run of cases” by showing that the accommodation is “reasonable on its face” or, if it is not, that “special circumstances” make the accommodation reasonable in the specific situation (the first step).  If the plaintiff meets this burden, the employer may argue that the proposed accommodation poses an undue hardship on its operation (the second step). The panel decision did not address whether working from home up to four days weekly is “reasonable in the run of cases” or that special circumstances make it so in this case.  See blog post here.
  • Because there is a question about the applicability of the “no good deed goes unpunished” axiom to accommodation requests. Does the fact that an employer allows some employees to telecommute under other circumstances (e.g., defined days) mean the employer must allow others to telecommute in other, less defined circumstances (e.g., up to four days weekly). See blog post here.

And so ends this fifth Ford post. Looking forward to the en banc decision and the sixth post.

“Significant Evidence of Untruthfulness” During FMLA Leave Gives Employer “Honest Belief” to Terminate Plaintiff

Thanks to our colleague Alison Jacobs Wice for this post

Add another FMLA victory for an employer who terminated a plaintiff based on its “honest belief” that the plaintiff was misusing FMLA leave.  The U.S. Court of Appeals for the 10th Circuit affirmed summary judgment for the employer on the plaintiff’s FMLA interference claim. Dalpiaz v. Carbon County Utah (10th Cir. July 25, 2014).

Following a motor vehicle accident, the plaintiff, a benefits administrator, went on leave. Despite her employer’s repeated requests that she submit the FMLA health care certification, the plaintiff finally produced it, some two months after the employer’s first request.  Following her block of leave, she returned to modified work, working two hours daily, twice per week.

While the plaintiff was on leave and while on modified duty, her co-workers and some  community members reported that she was engaging in activities that seemed inconsistent with her reported injuries and limitations: “playing football with her children, working in her yard, and assisting her children with costume changes and other tasks at lengthy dance rehearsals and recitals.” Numerous employees submitted written statements concerning their observations of plaintiff’s activities.

Based on these reports, the employer directed the plaintiff to undergo an independent medical exam (IME) to confirm that she had been entitled to FMLA. After repeated requests, plaintiff reported that she was unable to schedule the IME because it required a doctor’s referral. The employer terminated her employment.

Rejecting the plaintiff’s FMLA interference claim, the Tenth Circuit held that an “indirect link” between the reason for termination and FMLA is not enough to sustain such a claim. Although the subject matter of the paperwork plaintiff failed to timely return and the IME she failed to take concerned FMLA, it was the failures on which the employer based its action, not the content of the notices and request, the court noted. Responding to the plaintiff’s arguments that some of the witness reports were untrue, the court said:

What is important is not the absolute truth regarding Plaintiff’s state of health, but rather whether the [employer] terminated her because it sincerely, even if mistakenly, believed she had abused her sick leave and demonstrated significant evidence of untruthfulness. And on this record, there is no evidence to suggest the county fabricated these or any of the other reasons given for Plaintiff’s termination in order to justify an attempt to interfere with Plaintiff’s FMLA leave.

We have posted about numerous decisions in which the employer prevailed based on its “honest belief” that the plaintiff was misusing FMLA leave. See posts concerning the bride who took FMLA on her wedding day; the nurse who vacationed in Cancun; the lineman at Octoberfest; and the floater at Pulaski Day.

Among the lessons for employers from these cases is that the “honest belief” defense is powerful and that employers should investigate thoroughly to develop evidence to support that defense.

Wellness Program with “Steep” Penalty Violates the ADA, Claims EEOC Lawsuit

The EEOC has sued an employer because the penalty to employees for not participating in its wellness program was so steep that it made the “voluntary” program involuntary.  EEOC v. Orion Energy Systems, E.D. WI, filed August 20, 2014). Because the program was involuntary, the disability related questions employees were asked violated the ADA, according to the EEOC’s Complaint. The EEOC also alleged that the employer terminated the lone employee who declined to participate in the program because of her objections to it.  This is the first lawsuit brought by the EEOC challenging the substance of an employer’s wellness program.

According to the Complaint, the Company paid 100% of the health insurance premium for employees who participated in its wellness program and paid nothing toward the premium of any employee who did not participate, leaving the employee to pay 100% of the premium. In its press release announcing the lawsuit, the EEOC described the penalty for employees who do not participate as “steep” and “enormous.”

According to the Complaint, participants in the employer’s wellness program completed a Health Risk Assessment (HRA), which included having blood work done.  The “fitness” component of the program involved completing a medical history questionnaire and then using the Company’s range of motion machines.  The Complaint also alleges that there was a $50 “penalty” for not participating in the fitness component.

The EEOC regulations and Interpretive and Enforcement Guidance, permit employers to conduct medical examinations, which can include obtaining medical histories, as part of a voluntary  wellness program. For many years, the EEOC’s position has been that “[a] wellness program is ‘voluntary’ as long as an employer neither requires participation nor penalizes employees who do not participate.”  Just last year, the EEOC reiterated that it “has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether withholding of the award from non-participants constitutes a penalty, thus rendering the program involuntary.”  Obviously, in this case, the EEOC has taken a very definitive position that any penalty it determines to be “steep” and “enormous” would make an otherwise voluntary program involuntary. Earlier this year, the EEOC said that it plans to issue guidance this year concerning the amount of a reward/penalty allowed for a program to be “voluntary.”

Add San Diego to the Growing List of Paid Sick Leave Jurisdictions

San Diego has become the tenth jurisdiction requiring employers to provide employees with paid sick leave. On August 18, 2014, the San Diego City Council overrode the mayor’s veto of the Earned Sick Leave and Minimum Wage Ordinance. The earned sick leave provisions of the ordinance are effective on April 1, 2015.

Employees who work at least two hours in one or more calendar weeks within the geographic boundaries of San Diego accrue sick leave at the rate of one hour for every thirty hours worked within San Diego, without a cap.  Employees begin to accrue sick leave at the outset of employment or on April 1, 2015, whichever is later, and can begin using accrued sick leave on the ninetieth calendar day of employment or April 1, 2015, whichever is later.

An employee may use earned sick time for the employee’s medical treatment and “other medical reasons”; providing care or assistance to a family member with an illness, injury or medical condition; when the employee’s workplace or the school of the employee’s child is closed due to a public health emergency; or for “safe time,” which is time off to engage in defined activities relating to domestic violence, sexual assault or stalking.

An employer may limit an employee’s use of earned sick leave to forty hours in a benefit year. Unused sick leave must be carried over to the following year.  An employer may set a reasonable minimum increment for the use of earned sick leave, not to exceed two hours.

The ordinance  prohibits an employer from requiring an employee, as a condition of using earned sick leave, to search for or find a replacement worker to cover the hours during which such employee is using earned sick leave.

For foreseeable leave, an employer can require up to seven days notice. For unforeseeable leave, an employee must give as much notice as is practicable.  An employer must post a notice informing employees of their rights to earned sick leave and must also give employees upon hire information concerning earned sick time and—here is a unique tweak—notice of the “[e]mployer’s name, address, and telephone number.”

Meanwhile, the California Senate Appropriates Committee recently approved the Healthy Workplaces, Healthy Families Act of 2014, which would guarantee California workers three days of paid sick leave annually.