Back to the Drawing Board for EEOC Wellness Program Rules

On August 22 the U.S. District Court in D.C. granted summary judgment to the AARP which challenged the EEOC’s rules governing employer wellness programs. The rules allow an employer to offer or impose on an employee financial incentives or financial penalties depending on participation in an employer wellness program. The Court chose not to vacate the EEOC’s rules for the time being, but instructed the EEOC to explain its rationale for setting a 30% maximum on the incentive or penalty, which would be applied to the employee‘s premium cost,  to determine whether disclosure of the employee’s personal medical information is voluntary, instead of determining that any employer wellness program requiring disclosure of personal medical information is involuntary and therefore unlawful. AARP v. U.S. EEOC, (D.D.C. Aug. 22, 2017).

Under ACA, health insurance plans may lawfully offer an incentive of up to 30% of the cost of coverage, in exchange for the employee’s participation in a health-contingent wellness program. These employer-sponsored wellness programs often involve the collection of personal medical information, which implicates substantive protections of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), both enforced by the EEOC.

Both the ADA and GINA permit employers to collect personal medical information as part of a wellness program if the employee provides the information voluntarily. In May 2016, the EEOC issued an ADA rule stating that imposing a penalty or offering an incentive capped at 30% of the cost of self-only coverage that requires disclosure of ADA-protected information, does not render participation in the wellness program involuntary. Similarly, the EEOC issued a GINA rule allowing employers to offer the same 30% incentives for disclosure of a spouse’s medical information in the course of wellness program participation.

In 2016 AARP sought a preliminary injunction prohibiting enforcement of the ADA and GINA rules which became effective January 1, 2017. The EEOC’s arguments in opposition to the injunction were:

  • The 30% incentive level is in harmony with the ACA incentive level.
  • The 30% incentive level is a reasonable interpretation of “voluntary” based on current insurance rates.
  • The EEOC relied on comments submitted by the American Heart Association endorsing the 30% incentive level.

The Court determined that the EEOC provided inadequate explanation for determining that a 30% penalty or incentive is an appropriate measure of voluntariness. The Court remanded the rules to the EEOC but without vacating them to avoid disrupting current wellness programs. The Court ordered the EEOC to report back to the Court by September 21, 2017.

If you have any questions or would like to discuss how this decision or the EEOC’s wellness program rules affect you or your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Labor Law Practice Group  at 973-535-7129 or pmcgovern@nullgenovaburns.com, Firm Counsel Gina M. Schneider, Esq. at 973-535-7134 or gmschneider@nullgenovaburns.com, or Firm Associate Ryann M. Aaron, Esq. at 973-387-7812 or raaron@nullgenovaburns.com.

EEOC Releases 2016 Enforcement Data: Charges Increase, Downward Trend in Litigation & Monetary Recovery, LGBT Charges Highlighted

Each year, the U.S. Equal Employment Opportunity Commission (EEOC) releases data detailing the charges of workplace discrimination it receives, the number of enforcement suits filed and resolved, and any areas of targeted investigations and compliance initiatives from the prior year.  On January 18, 2017, the EEOC released its Fiscal Year 2016 Enforcement and Litigation Data summarizing its findings.

Rising Number of Discrimination Charges – According to the EEOC, in 2016 it received 91,503 charges of discrimination, making 2016 the second consecutive year that the agency has seen an increase in the number of charges.  2016 also marks the third consecutive year in which retaliation was the most frequently filed charge.  Below is a chart summarizing the EEOC’s breakdown of the categories of charges filed in 2016 along with a comparison to those charges filed in New Jersey and New York:

  National New Jersey New York
Retaliation:  

42,018 (45.9%)

 

731 (1.7% of total Retaliation charges in US)  

1,604 (3.8% of total Retaliation charges in US)

 

Race:  

32,309 (35.3%)

 

624 (1.9% of total Race charges in US)  

1,084 (3.4% of total Race charges in US)

 

Disability:  

28,073 (30,7%)

 

583 (2.1% of total Disability charges in US)  

1,061 (3.8% of total Disability charges in US)

 

Sex:  

26,934 (29.4%)

 

500 (1.9% of total Sex charges in US)  

1,202 (29% of total Sex charges in US)

 

Age:  

20,857 (22.8%)

 

437 (2.1% of total Age charges in US)  

865 (4.1% of total Age charges in US)

 

National

Origin:

9,840 (10.8%)

 

254 (2.6% of total National Origin charges in US)  

601 (6.1% of total National Origin charges in US)

 

Religion:  

3,825 (4.2%)

 

104 (2.7% of total Religion charges in US)  

180 (4.7% of total Religion charges in US)

 

Color:  

3,102 (3.4%)

 

42 (1.4% of total Color charges in US)  

208 (6.7% of total Color charges in US)

 

Equal Pay:  

1,075 (1.2%)

 

Info not available Info not available
Genetic

Information:

 

238 (.3%) Info not available Info not available

Steady Increase in Charges Filed by LGBT Individuals – For the first time, the EEOC included details in its year end summary about sex discrimination charges filed specifically by members of the LGBT community.  In fiscal year 2016, it settled 1,650 of such charges, recovering $4.4 million.  This accounts for roughly 40% of the 4,000 sex discrimination charges filed by LGBT individuals since fiscal year 2013, which indicates a notable, steady rise in the number of charges filed by members of the LGBT community.  Also trending are the issues involving transgendered employees’ restroom rights.  In July 2015, the EEOC ruled that denying an employee equal access to a common restroom corresponding to the employee’s gender identity constitutes sex discrimination violated Title VII of the Civil Rights Act, as does conditioning an employee’s such right on proof that the employee underwent a medical procedure, and/or restricting a transgendered employee to a single-user restroom.

Overall Decrease in Monetary Awards – The EEOC recovered a total of over $482 million in fiscal year 2016, down from the $525 million in 2015, broken down as follows:

  • $347.9 million for private-sector, state, and local government employees through mediation, conciliation, and settlements;
  • $52.2 million through litigations; and
  • $82 million for federal employees.

Downward Trend in Litigation – Over 76% of cases that were referred to mediation in 2016 were resolved successfully, though conciliation had a lower success rate of only 44%.  Litigation by the EEOC is experiencing a downward trend, with only 165 active cases on the EEOC’s docket at the end of 2016, as opposed to the 218 that existed at the end of 2015.  In addition, the EEOC filed only 86 lawsuits alleging discrimination in 2016, down from its 142 filed in 2015 and 133 in 2014.

New Online Charge Status System – The EEOC launched digital services allowing employers and charging parties to receive and file documents electronically, check the status of charges online, and communicate electronically with the EEOC.  These services are intended to streamline the charge process and reduce the number of paper submissions and phone inquiries, easing administrative burdens on the EEOC.  These changes may make it easier not only for the agency to handle more charges and resolve them more quickly, but for complainants to file them.

New ADA Regulations on Employer-Sponsored Wellness Plans – The EEOC issued regulations and interpretive guidance advising that employers may provide limited financial and other incentives in exchange for an employee answering disability-related questions or undergoing medical exams as part of a wellness program.

Employers should review the EEOC’s 2016 charge and enforcement data in order to remain vigilant when responding to complaints of harassment and/or discrimination in the workplace.  The EEOC’s statistics also reinforces the need for employers to train managers, supervisors, and employees on those policies.

For more information on the EEOC’s year-end summary, the EEOC’s strategy for future enforcement of federal employment discrimination statutes, or ways to ensure that your company is in compliance with the EEOC’s mandates, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Tick-Tock Goes the Clock: SCOTUS Clarifies the Statute of Limitations in Constructive Discharge Actions

On May 23, 2016, the United States Supreme Court issued its opinion in Green v. Brennan, Postmaster General, in which the Court gave aggrieved employees in workplace discrimination cases more time to file complaints against their employers.  The Court in Green addressed when the 45-day clock during which an employee must file a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) when pursing a claim for employment discrimination begins to run.  In a 7-1 opinion by Justice Sotomayor, the Court held that because part of the “matter alleged to be discriminatory” in a constructive-discharge claim is an employee’s resignation, the 45-day limitations period for such an action begins to run when the employee “gives notice of his resignation,” not the last day of the last discriminatory workplace incident. Justice Thomas, a former chairman of the EEOC, dissented.  Justice Alito concurred with the majority’s outcome, but not with its reasoning.

In Green, the petitioner complained to his employer, the United States Postal Service (“USPS”), because he believed he was passed over for a promotion due to his race.  After making the complaint, his supervisors accused petitioner of intentionally delaying mail, a federal offense.  On December 16, 2009, petitioner and the USPS entered into an agreement whereby the USPS agreed not to pursue criminal charges in exchange for the petitioner either retiring or accepting another position in a less desirable location for less pay.  The petitioner chose to retire, and submitted his resignation on February 9, 2010, with an effective date of March 31, 2010.

On March 22, 2010, 41 days after submitting his intention to retire but 96 days after signing the agreement with USPS, the petitioner contacted the EEOC to report an unlawful constructive discharge, which is a prerequisite to filing a complaint under Title VII of the Civil Rights Act of 1964.  The Federal District Court dismissed his complaint as untimely because it ruled that petitioner did not contact the EEOC within 45 days of the complained discriminatory action.  The Tenth Circuit affirmed, holding that the 45-day window began to run on December 16, 2009, when the agreement with the USPS was signed.

In holding that the “matter alleged to be discriminatory” in a constructive-discharge claim includes the employee’s resignation, the majority in Green offered three reasons to start the 45-day period with the notice of resignation:

  • The employee’s resignation is a part of the completed cause of action, which has two elements: discriminatory conduct such that a reasonable employee would have felt compelled to resign and the actual resignation. Relying on Pennsylvania State Police v. Suders, 542 U.S. 149 (2004), the majority held that it is only after an employee has resigned that they have a complete and present cause of action to trigger the limitations period.
  • The majority held that the natural reading of “matter alleged to be discriminatory” includes the allegations that form the basis of the claim, e. the employee’s resignation.
  • Lastly, the majority relied on practical considerations of its holding in order to further the policy goals of Title VII’s remedial structure. Otherwise, the majority noted, an employee would be forced to file a complaint only to later amend it to allege a constructive discharge after resigning.

Importantly, the majority concluded that the constructive-discharge claim accrues, and the limitations period begins to run, when an employee gives notice of their resignation, not from the effective date of that resignation.  So, if an employee gives their two-week notice to their employer, their claim would run from the date that notice was given, not from their last day of work two weeks later.  The Court did not rule on the merits of the petitioner’s claim, instead remanding the matter to the Tenth Circuit Court of Appeals to determine when exactly Green gave notice of his resignation.

While Justice Alito concurred in the outcome of the majority’s decision as it applied to the petitioner, he did not agree with the majority’s bright-line rule for all constructive-discharge claims. Rather, Justice Alito would start the 45-day period from the employer’s last discriminatory act, which could include the employee’s resignation if it was the employer’s intent to force that employee to resign.  Without that intent however, Justice Alito argued that the resignation is not an “independent discriminatory act but merely a delayed consequence of earlier discrimination” that does not give rise to a fresh limitations period.  In his dissent, Justice Thomas would have affirmed the Tenth Circuit because, he argued, only an employer’s action can trigger the 45-day period, and not the action of an employee.  To Justice Thomas, an employee’s decision to resign does not fall within the meaning of a “matter alleged to be discriminatory” because it is an action taken solely by the employee.

The effect of this decision is that it eliminates procedural uncertainties for when the limitations period begins for a claim of constructive discharge.  It is important for employers to remember that this decision only applies to the claims of constructive discharge, and not for other claims of discriminatory conduct.  As noted by Justice Sotomayor, the “limitations-period analysis is always conducted claim by claim.”  The 45-day period for those other claims will begin to run from when those alleged acts occur, but for claims of constructive discharge, the clock does not start until the employee gives notice of their resignation.

For more information regarding the potential impact of this decision, please John C. Petrella, Esq., Chair of the firm’s Employment Law & Litigation Practice Group, at jpetrella@nullgenovaburns.com, or at 973-533-0777 or contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com.

Transgender Accommodation Issues at the Forefront of Employment and Education

Earlier this month, the Equal Employment Opportunity Commission (EEOC) released a new Fact Sheet, announcing its formal position on bathroom access rights for transgender employees.  The Fact Sheet provides employers with a nuanced look into what practices and procedures the EEOC will be investigating should a charge be brought alleging sex discrimination in the context of bathroom usage by transgendered individuals.

As noted therein, the EEOC defines the term “transgender” as referring to “people whose gender identity and/or expression is different from the sex assigned to them at birth,” and specifically notes that “[a] person does not need to undergo any medical procedure to be considered a transgender man or a transgender woman.”

The EEOC reiterates that it enforces Title VII of the Civil Rights Act of 1964 in instances of discrimination against transgendered individuals, as Title VII prohibits employer discrimination on the basis of sex where the action is “motivated by hostility, by a desire to protect people of a certain gender, by gender stereotypes, or by the desire to accommodate other people’s prejudices or discomfort.” The EEOC also noted that employers cannot and should not rely on state laws contrary to this guidance.

Bathroom Access Rights for Transgender Employees Under Title VII

The EEOC’s interpretation of “transgender” in the context of Title VII and bathroom usage is based upon two cases before the EEOC: Macy v. Dep’t of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (Apr. 12, 2012) and Lusardi v. Dep’t of the Army, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015), as well as a recent opinion from the Fourth Circuit in G.G. ex rel. Grimm v. Gloucester Cty. Sch. Bd., — F.3d –, 2016 WL 1567467 (4th Cir. 2016).

Lusardi held that prohibiting equal access to a common restroom corresponding to the employee’s gender identity is sex discrimination.  Further, in Macy, the EEOC noted that an employer cannot avoid the requirement to provide equal access to a common restroom for transgender employees by providing single-user restroom access instead.  However, the EEOC advised that an employer can make single-user bathrooms available to all employees who might choose to use them. In G.G., the U.S. Court of Appeals for the Fourth Circuit followed the Department of Education’s position that sex discrimination under Title IX is prohibited and that educational institutions are to give transgender students access to bathrooms and locker rooms consistent with their gender identity.

In the Fact Sheet, the EEOC reaffirms its position that any state law to the contrary of these decisions and interpretations is not a defense under Title VII.  Thus, employers would be wise to update their policies and procedures to conform with the EEOC’s directives as to transgendered individuals, rather than look to their resident state for guidance.

Transgender Access to School Bathrooms

On May 13, 2016, President Obama issued a directive that requires every public school to provide appropriate access for transgender students or risk the loss of federal funds. The directive has received strong backlash from conservative leaders who have accused the President of blackmailing and the federal government of getting involved in local issues.

On the same day, the Department of Education and the Department of Justice (“the Departments”) issued a Dear Colleague letter to assist in ensuring that transgender students can “enjoy a supportive and nondiscriminatory school environment.” Although the joint letter does not carry force of law, the intent is clear: schools must agree or lose federal funding.  Specifically, schools must agree that that it will not exclude, separate, deny benefits, or otherwise treat students differently on the basis of sex in its educational programs or activities unless Title IX so authorizes. Schools are required to treat transgender students according to the gender that they identify as soon as a parent or guardian notifies the district that the identity is different from previous records.

Much like the EEOC guidance pertaining to employers, the Departments do not require a medical diagnosis or treatment as a prerequisite to be considered transgender; they also explicitly state that accommodating the discomfort of others cannot be justified by excluding or singling out a particular class of students. The Departments provide specific guidance on sex-segregated activities and facilities and reiterate that schools may provide separate facilities (including housing) but must allow transgender student to access those which align with the gender that which the student identifies. Records must be kept consistent with the gender that which the student identifies with as well. There are some limitations. The Departments note that non-vocational elementary and secondary schools and private undergraduate institutions are permitted under Title IX to set their own sex-based admissions policies.

New York City Commission on Human Rights’ Transgender Guidance

On May 19, 2016, New York City’s Commission on Human Rights (NYCCHR) issued new guidelines requiring employers and landlords to implement transgender pronouns (“ze/hir”) as requested by transgender workers or tenants. Failure to comply may open organizations and individuals up to $250,000 in fines if that failure is motivated by malicious intent.

NYCCHR specifically notes that “harassment motivated by gender is a form of discrimination” and outlines examples of violation of its guidance in the context of failure to use an individual’s preferred name or pronoun, refusing to allow individuals to utilize single-sex facilities and programs consistent with an individual’s preferred gender, sex stereotyping, imposing different uniforms or grooming standards based on sex or gender, providing employee benefits that discriminate based on gender, considering gender when evaluating requests for accommodation, and engaging in discriminatory harassment and retaliation.

For more information regarding the EEOC’s Fact Sheet, related guidelines, and best practices with respect to transgender individuals in the workplace, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

The EEOC’s New One-Way Street: Providing Position Statements to Charging Parties

Effective February 18, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) will uniformly allow employees bringing unlawful discrimination claims to gain access to the employer’s Position Statement submitted in response to the filing of a Charge of Discrimination. The disclosure will also retroactively apply to all requests for Position Statements made on or after January 1, 2016. Instead of verbally advising the Charging Party of the contents of the employer’s Position Statement, the EEOC will now provide the employer’s Position Statement and non-confidential attachments to Charging Parties upon request. The EEOC will also allow the Charging Party with an opportunity to respond within 20 days. The Charging Party’s response, however, will not be provided to the employer during the pendency of the investigation. The EEOC maintains that the new “Nationwide Procedures for Releasing Respondent Position Statements and Obtaining Responses from Charging Parties” are meant to unify approaches across all of its offices and will allow it to gain better information to strengthen its investigations.

The EEOC’s new policy also fails to assure employers that documents provided in support of their Position Statement will remain confidential.  The EEOC only advises that its “staff may redact confidential information as necessary prior to releasing the information to a Charging Party or her representative.” Thus, when submitting a Position Statement, employers must now carefully review whether or not any confidential proprietary business information is being produced. If so, employers should clearly mark exhibits as “confidential” to alert the EEOC that the document(s) should not be provided to the Charging Party. The EEOC also advises that employers should provide an explanation justifying the nature of the information contained in the attachments. The EEOC suggests that the following information should be segregated into separate attachments and designate them as follows:

  • Sensitive medical information (except for the Charging Party’s medical information).
  • Social Security Numbers.
  • Confidential commercial or confidential financial information.
  • Trade secrets information.
  • Non-relevant personally identifiable information of witnesses, comparators or third parties, for example, social security numbers, dates of birth in non-age cases, home addresses, personal phone numbers, personal email addresses, etc.
  • Any reference to charges filed against the employer by other charging parties.

The EEOC also warns that it will not accept “blanket or unsupported assertions of confidentiality.” In addition, the EEOC announced the implementation of a new Digital Charge System. Now, employers can upload Position Statements and attachments into the digital Charge file rather than faxing or mailing the documents to the EEOC.

For more information regarding the potential impacts of the EEOC’s new procedures and best practices on how to respond to a Charge of Discrimination, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

Proposed NJ Equal Pay Bill Could Lead to More Wage Gap Disputes if Passed

On February 4, 2016, a bill that would close the wage gap amongst women and men advanced out of the New Jersey Senate Labor Committee.  On average in New Jersey, studies have shown that women make 80.4 cents for each dollar a man earns, making it slightly more than the national average of 79 cents.  Further, the wage gap is larger for African-American and Latina women, who make 58.1 cents and 42.7 cents, respectively, for every dollar men earn. If signed into law, the new Equal Pay Bill (Senate Bill 992) will amend the New Jersey Law Against Discrimination (LAD).

What Will the New Equal Pay Law Require?

The two year statute of limitations for pay discrimination claims would restart with each unlawful paycheck that is issued by the employer. The new law would allow employees to file claims after termination if the employee was unaware that the pay disparity existed during the course of his or her employment. The proposed bill will also expand back pay awards for successful plaintiffs for the entire period of time if the violations continued to occur within the statute of limitations. Employers will also be prohibited from requiring employees or prospective employees to consent to the shortening of the statute of limitations period or to waive any violations of the law.

The Equal Pay Bill will also require employers to prove that any disparity in pay was based on a factor other than sex, such as a seniority system, a merit system, training, education or experience (including position title), or the quantity or quality of production.  Employers would also have to prove that reasonable application of these factors accounts for the entire wage differential, that the factors are job-related and consistent with job necessity, and that there were no other alternative business practices that would serve the same purposes without causing a difference in pay between female and male employees. Employers will also be prohibited from retaliating against employees for disclosing information about job title, occupational category, and rate of compensation of any employees or former employees.

What Should Employers Do Now?

Given the increased fervor to close the pay gap for women and minorities, the advancement of the new Equal Pay Bill and U.S. Equal Employment Opportunity Commission’s new requirements with regard to EEO-1 pay data reporting beginning in 2017, the time is now for employers to begin to take preemptive action to correct any discriminatory pay practices that may exist.

  • Employers should review and update their policies to ensure that employees are not discriminated against or retaliated against for discussing or questioning compensation.
  • Employers must ensure that their wage rates in all of their operations and facilities are similar and should document that their pay-related decisions are based on a legitimate, business necessity.
  • Managers and supervisors should also be trained to comply with the employer’s nondiscriminatory pay practices.
  • Employers who are engaging in pay disparity can certainly expect an increase in pay discrimination cases both under the LAD as well as cases brought by the EEOC for illegal pay practices.

For more information regarding the potential impacts of this legislation and how to implement nondiscriminatory pay practices, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

EEO-1 Survey Deadline is Approaching

The annual deadline for the completion of EEO-1 surveys is September 30, 2014.  All employers subject to this requirement should have received (or will shortly receive) the reports from the Equal Employment Opportunity Commission (“EEOC”).   EEO-1 reports must be filed by all private employers with 100 or more employees and all federal government contractors or first-tier subcontractors with 50 or more employees and a contract or subcontract valued at $50,000 or more. Private employers with fewer than 100 employees are still subject to this requirement if the company is owned or affiliated with another employer, and both enterprises employ greater than 100 employees.  These reports help the federal government to identify employment data on race/ethnicity, gender and job categories.

The EEOC prefers that employers file the EEO-1 report electronically.  Employers can access the web-based EEO-1 form here: http://www.eeoc.gov/employers/eeo1survey/.  Employers who have previously filled out the survey will also receive a paper copy in the mail.  Instructions for the completion of the survey can be found on the EEOC’s website or attached to the form.

If you have any questions regarding the completion of this report, please contact Patrick W. McGovern, Esq., at 973-535-7129, pmcgovern@nullgenovaburns.com or Allison Gotfried, Esq., at 973-646-3297, agotfried@nullgenovaburns.com.