EEOC proposed significant pay equality changes to EEO-1

If your company has 100 or more employees, you should be very familiar with the federal government’s EEO-1 survey. The EEOC requires that you annually complete and file this form, which requests demographic on your employees, broken down by protected classes and job categories.

Last Friday, the White House made a game changing announcement about the information it proposes you submit in your EEO-1 filings.

EEOC stakes its turf on the issue of sexual orientation discrimination

As I thought of which David Bowie song to support today’s effort, the one that leapt to mind is “Space Oddity” (I was going to use “Changes”, but Dan Schwartz already claimed it for his post yesterday).

To me, it is a complete oddity that, in the 2016, it is still statutorily legal for an employer to fire an employee because of that employee’s sexual orientation. On this point, the EEOC and I see eye-to-eye. The difference, however, is that the EEOC is in a position do so something about it. What it is not doing is sitting around and waiting for Congress to do something about it.

Employers feeling good about win in EEOC wellness case

Nine months ago, the EEOC published proposed regulations detailing how and when employers can maintain wellness incentives for employees under group health plans without running afoul of the ADA’s voluntariness requirements for medical exams.

In the closing minutes of 2015, a Wisconsin federal court issued an opinion in one of the first lawsuits filed by the EEOC that had challenged an employer wellness program as an ADA violation. The resulting victory for the employer may cause the EEOC to rethink its wellness-incentive strategy.

Don’t ignore reasonable accommodations in the application process

Eliminating barriers in recruitment and hiring is one of six national priorities identified by EEOC’s Strategic Enforcement Plan. Large national employers provide the EEOC with a soapbox to broadcast this agenda. Thus, a lawsuit filed by the agency against McDonald’s Corp. for its alleged refusal to interview a deaf job applicant is a perfect ADA-storm.

7th Circuit delivers employers an early Christmas gift in EEOC severance agreement case

In EEOC v. CVS Pharmacy, Inc., the EEOC challenged what I have previously described as several garden-variety, boilerplate provisions in a severance agreement. I’ve also previously predicted that a win for the EEOC in this case would be ruinous for employers.

Late last week, the 7th Circuit affirmed the decision of the district court, which had dismissed the EEOC’s lawsuit based on its failure to conciliate with CVS prior to filing suit.

And, the 7th Circuit agreed, affirming the case on those grounds. But, the 7th Circuit also went further, and offered hope to employers this federal courts will not stand for the folly the EEOC is trying to put forth by filing this type of case.

We stand with France; we stand against discrimination

Photo by Jon Hyman, 8/6/15

What happened Friday evening in France is unfathomable. Except, really, it isn’t. We experienced it 15 years ago in New York City. And, in the aftermath of 9/11, discrimination against Muslims and Arabs increased by 250 percent.

From the EEOC:

Transgender rights take center stage

It’s been a big week for the rights of transgender Americans.

• Caitlyn (née Bruce) Jenner had her coming out party on the cover of Vanity Fair and become the quickest person to reach 1 million followers on Twitter, in less than four hours, besting President Obama’s record from two weeks ago.

• The EEOC published a guide addressing the rights of LGBT employees working in the federal sector [pdf], and continues to litigate cases under Title VII’s sex-discrimination prohibitions on behalf of transgender employees.

• OSHA published a statement of “best practices” for bathroom access for transgender employees [pdf], clarifying that employees should be entitled to use the bathroom of the gender with which they identify, and that no employer should require an employee to use a specific gender’s bathroom, or a segregated transgender-only bathroom facility.

While we wait for the law the catch up to society’s opinion on LGBT rights (i.e., same-sex marriage rights and official statutory extension of Title VII’s protections to LGBT employees), our federal agencies are doing the best they can to modernize these laws for us. If you are still discriminating against LGBT employees, it’s time to stop. You are officially behind the times. It was not that long ago that LGBT rights were a joke. Now, we are on the verge of a breakthrough. Are you going to ride the wave, or hold onto the jam of the door that Caitlyn Jenner just kicked down kicking and screaming. The choice, for now, is yours, unless you run afoul of the EEOC, OSHA, or a court, each of which is doing is best to do what Congress has, thus far, refused.

#SCOTUS requires employers to stereotype in ruling for EEOC in hijab-accommodation case

Yesterday, the United States Supreme Court ruled that an employer violates Title VII’s religious accommodation requirements if the need for an accommodation was a “motivating factor” in its decision, regardless of whether the employer had actual knowledge of the religious practice or its need to be accommodated.

The case, EEOC v. Abercrombie & Fitch Stores [pdf], is an unambiguous win for religious freedoms, while, at the same time, places an added burden on employers to make educated guesses about applicants’ and employees’ potential needs for workplace religious accommodations.

Abercrombie involved a conflict between a hijab-wearing Muslim job applicant and the employer’s “look policy.” The unusually terse seven-page opinion (of which only a little more than three was dedicated to actual legal analysis) focused on the difference between motive and knowledge in explaining its holding:

Motive and knowledge are separate concepts. An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.…

For example, suppose that an employer thinks (though he does not know for certain) that a job applicant may be an orthodox Jew who will observe the Sabbath, and thus be unable to work on Saturdays. If the applicant actually requires an accommodation of that religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII. 

So, if knowledge is irrelevant, what is an employer to when faced with one’s potential need for a religious accommodation? More the point, isn’t an employer faced with having to make educated guesses (based on stereotypes such as how one looks or what one wears) of the need for an accommodation? Title VII is supposed to eliminate stereotypes from the workplace, not premise the need for an accommodation on their use. And that’s my biggest critique of this opinion—it forces an employer into the unenviable position of applying stereotypes to make educated guesses.

Nevertheless, employers are stuck with the Abercrombie “motivating factor” rule as the rule for religious accommodations moving forward. Thus, let me offer a simple suggestion on how to address this issue in your workplace—talk it out. Consider using the following three-pronged approached to ACE religious-accommodation issues in your workplace.

• Ask: Even if an employee comes to a job interview wearing a hijab, it’s still not advisable to flat-out ask about his or her religion. Nevertheless, if you believe an applicant’s or employee’s religion might interfere with an essential function of the job, explain the essential functions and ask if the employee needs an accommodation. 

• Communicate: If the individual needs an accommodation, engage in the interactive process. Have a conversation with the applicant or employee. Explain your neutral policy for which an exception will have to be made. Talk through possible accommodations, and decide which accommodation, if any, is appropriate for your business and for the individual.

• Educate: Do you have written policy on religious accommodation? Of course, merely having a policy is never enough. You must communicate it to your employees, explain its meaning and operation, and enforce it when necessary.

This decision is a potential game-changer for employers. Make sure you understand the implications of Abercrombie, so that you are as accommodating as the law requires.

Image courtesy of Jeffrey Weston’s Ape, Not Monkey
http://www.apenotmonkey.com/2012/04/09/religious-accommodation/

Supreme Court ruling on EEOC conciliation obligations is a Pyrrhic victory for employers

One question that employers always ask upon receipt of an EEOC charge of discrimination is, “How does this process work?” After the EEOC concludes its investigation, it has two basic options. It can conclude that no reasonable cause exists that the employer violated Title VII and dismiss the charge (leaving the employee to file his or her own lawsuit in federal court within 90 days), or conclude that reasonable cause does exist (again leaving the employee to file his or her own lawsuit, or instituting a lawsuit on the employee’s behalf).

Before the EEOC can file its own discrimination lawsuit against an employer, Title VII requires that the agency “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” What happens, however, if the EEOC fails to conciliate? What is scope of the EEOC’s conciliation obligation? And does a failure act as a bar to any subsequent lawsuit filed by the EEOC?

These were the question the Supreme Court considered in Mach Mining, LLC v. EEOC [pdf]. This is what the Court unanimously concluded:

1. Courts have authority to review whether the EEOC has fulfilled its Title VII duty to attempt conciliation.

2. The statute only requires the EEOC to notify the employer of the claim and give the employer an opportunity to discuss the matter. Such notice must describe what the employer has done and identify the employees (or class of employees) that have suffered. The EEOC then must try to engage the employer in a discussion to provide the employer a chance to remedy the allegedly discriminatory practice. Title VII does not, however, require a good-faith negotiation.

3. The appropriate scope of judicial review of the EEOC’s conciliation activities is narrow, enforcing only the EEOC’s statutory obligation to give the employer notice and an opportunity to achieve voluntary compliance. A sworn affidavit from the EEOC stating that it has performed these obligations should suffice to show that it has met the conciliation requirement.

4. Should a court conclude (based on “concrete evidence” presented by the employer) that the EEOC did not provide the employer the requisite information about the charge or attempt to engage in a discussion about conciliating the claim, the appropriate remedy is to stay the proceedings and issue an order requiring the EEOC to undertake the mandated conciliation efforts. Dismissal of the lawsuit is not warranted in these circumstances.

Technically speaking, you can chalk this case up as a victory for employers, albeit a narrow one. The Supreme Court refused to hold that Title VII imposes a duty on the EEOC to negotiation in good faith, and that the agency satisfies its obligation to conciliate merely by providing notice and an opportunity to discuss. Moreover, a failure to conciliate doesn’t serve as a jurisdictional bar to litigation, but merely results in the EEOC being told to “try again, this time with meaning.”

If nothing else, this case sends a strong message that courts favor resolution, not litigation.

EEOC seeks a quarter-billion dollars from NYC

Earlier this month, the EEOC’s New York District Office issued a Determination [pdf] finding probable cause to believe that New York City violated Title VII and the Equal Pay Act through a “pattern of wage suppression and subjective promotion based on … sex, race, and national origin.” The conciliation agreement the agency proposed seeks compensation in excess of more than $246 million. That eye-popping number should catch the attention of every employer.

While settlement proposals are merely numbers on a piece of paper, and no one expects NYC to roll over and play dead, this story holds an important lesson for employers. The EEOC, which is an agency of limited financial resources, is going to go after that which will provide the most bang for its buck. If you are a large employer, you have a large target on your back, and the EEOC is taking aim. Yet, even small employers should show concern, because while the size of the target is might be proportionate to the size of the employer, even a small hit can prove devastating for a small employer. If you are not currently under investigation (and most of your aren’t), consider yourself as living on borrowed time. Take advantage of it. Use this time to audit all of your HR and employer practices (hiring, firing, pay, policies, etc.) to ensure compliance with all employment laws, including Title VII. It might sound trite, but knowledge really is power. Better to find out that you are out of compliance before an agency knocks on your door than after.

Reading the #SCOTUS tea leaves: headscarves, religious accommodations, and Abercrombie

Yesterday, the Supreme Court heard oral argument in EEOC v. Abercrombie & Fitch Stores, Inc. (transcript here [pdf]), which will hopefully determine the circumstances under which an employer must, as a religious accommodation, grant an exception to its “Look Policy” for a hijab-wearing job applicant. More broadly, employers hold out hope for some more generalized guidance on what they should do when a corporate policy conflicts with an employee’s sincerely held religious belief.

What an interesting argument. The Justices seemed very skeptical of requiring employees to raise the issue of a reasonable accommodation in a job interview, and instead suggested that the burden should fall on an employer to bring up the issue. For example, Justice Kagan asked:

You’re essentially saying that the problem with the rule is that it requires Abercrombie to engage in what might be thought of as an awkward conversation…. But the alternative to that rule is a rule where Abercrombie just gets to say, “We’re going to stereotype people and prevent them from getting jobs. We’ll never have the awkward conversation because we’re just going to cut these people out.”

The criticism of the employer, however, was not limited to the Court’s left wing. Justice Alito also seems skeptical that an employer can simply ignore an obvious potential need for an accommodation simply by denying employment.

All right.  Let’s say …­­ four people show up for a job interview at Abercrombie…. So the first is a Sikh man wearing a turban, the second is a Hasidic man wearing a hat, the third is a Muslim woman wearing a hijab, the fourth is a Catholic nun in a habit. Now, do you think … that those people have to say, we just want to tell you, we’re dressed this way for a religious reason. We’re not just trying to make a fashion statement….

I want to know the answer to the question whether the employee has to say, I’m wearing this for a religious reason, or whether you’re willing to admit that there are at least some circumstances in which the employer is charged with that knowledge based on what the employer observes.

Justice Alito then offered a very practical solution:

Well, couldn’t the employer say, we have a policy no beards, or whatever, do you have any problem with that?

Reading the tea leaves, I predict another employee-side victory from this conservative-majority court. If we are assigning burdens, it seems to me that the Court thinks it makes sense to place the burden on the party with more information (the employer) to explain the job requirements to determine if a potentially obvious religious belief conflicts. Otherwise, you are requiring the employee to guess at whether an accommodation is needed at all.

Stay tuned. This will be a very interesting opinion to read when it is released later this year.

4th Circuit eviscerates EEOC in background screening case

Nearly a year ago, the 6th Circuit sent a strong message to the EEOC in dismissing a case regarding its “expert” witness retained to challenge an employer’s use of credit checks. Last Friday, the 4th Circuit affirmed the dismissal of a similar case in which the EEOC used the same expert. In EEOC v. Freeman [pdf], the 4th Circuit did not mince its words:

The EEOC wields significant power, some of which stems from the agency’s broad discretion to investigate, conciliate, and enforce, and some of which derives from public actions that exert influence outside the courtroom. The Commission’s actions can be also expected to have broader consequences than those of an ordinary litigant given the “vast disparity of resources between the government and private litigants.”

In deciding when to act, the Commission must balance sometimes-competing responsibilities. On the one hand, the agency must serve the employee’s interest by preventing an employer from “engaging in any unlawful employment practice” under Title VII. On the other hand, “the EEOC owes duties to employers as well: a duty reasonably to investigate charges, a duty to conciliate in good faith, and a duty to cease enforcement attempts after learning that an action lacks merit.” That the EEOC failed in the exercise of this second duty in the case now before us would be restating the obvious.

The EEOC must be constantly vigilant that it does not abuse the power conferred upon it by Congress, as its “significant resources, authority, and discretion” will affect all “those outside parties they investigate or sue.” Government “has a more unfettered hand over those it either serves or investigates, and it is thus incumbent upon public officials, high and petty, to maintain some appreciation for the extent of the burden that their actions may impose.” The Commission’s conduct in this case suggests that its exercise of vigilance has been lacking. It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.

Ouch.

Federal appeals court rejects “retaliatory rehiring” claim

As part of massive reorganization, Allstate severed the employment of approximately 6,200 employee agent. In connection with the layoff, Allstate offered all of the employee agents the opportunity to convert their employment status into that of an independent contractor selling Allstate insurance products, provided that they signed a release of all legal claims against Allstate, including federal employment discrimination claims.

In filing suit on behalf of the employees, the EEOC took the position that conversion from an employee to an independent contractor, coupled with a general release, constitute unlawful retaliation under the federal civil rights laws.

In EEOC v. Allstate Ins. Co. (2/13/15) [pdf], the Third Circuit flatly rejected the EEOC’s folly.

It is hornbook law that employers can require terminated employees to release claims in exchange for benefits to which they would not otherwise be entitled. Nothing in the employment-discrimination statutes undermines this rule….

According to the Commission, Allstate could have complied with the antiretaliation statutes by simply firing all its employee agents for good, instead of giving them the opportunity to sell Allstate insurance in a different capacity. We are confident that federal laws designed to protect employees do not require such a harmful result….

The EEOC here fails to articulate any good reason why an employer cannot require a release of discrimination claims by a terminated employee in exchange for a new business relationship with the employer.…. [W]e are not persuaded by the Commission’s efforts to arbitrarily limit the forms of consideration exchangeable for a release of claims by a terminated employee.

In other words, the employer, and not the EEOC, gets to decide the post-employment benefit to provide an employee in exchange for a release of claims—whether it’s severance pay, continued health benefits, an engagement as a independent contractor, or something else. As long as the consideration is not something to which the employee is already entitled, a court will not second-guess its sufficiency.

Employers seek to halt EEOC’s efforts to drum up plaintiffs for its “Onionhead” lawsuit

You may recall the lawsuit filed the EEOC claiming that a New York employer forced its employees to join a religion called “Onionhead.”

Now, Employment Law 360 reports that the company’s counsel is trying to block the EEOC from reaching out to the company’s employees to seek additional plaintiffs for its lawsuit.

The employers have asked the federal judge hearing the case to block the EEOC from any further “solicitations of Defendants’ current and former employees for participation in the lawsuit.” You can download a copy of the employers’ letter to the court here [pdf].

According to the company, the EEOC’s letters, printed on government letterhead, provided the employees a one-sided description of the case, omitted a statement that liability has yet to be decided, and created the impression that the employee must contact the EEOC.

Decide for yourself.

If the employer is true, the EEOC is going to have issues. A federal agency cannot misrepresent litigation to drum up support among employees. It also cannot provide employees a mistaken impression that they must cooperate.

At the same time, however, employers faced with alleged misconduct like that alleged in the Onionhead lawsuit must tread very carefully so that they do not unlawfully retaliate against the employees by interfering with their participation rights. For example, an employer cannot forbid employees from cooperating with the EEOC, or even dissuade them from contacting the agency.

What should employers do?

• They can tell employees that it is their choice whether to contact, or cooperate with, the EEOC.
• They can tell employees to be truthful when talking with the EEOC.

What must employers do? 

• They must guarantee employees that they will not suffer any retaliation, no matter their choice.

Employers faced with an EEOC investigation should know that the agency is using these tactics, so that they can proactively, and lawfully, respond by delivering the right message to their employees.

Jury verdict teaches that “open door” policies must still comply with EEO laws

There exists an inherent tension  between open-door and other self-reporting policies and the EEO laws.

Consider, for example, a recent $100,000+ jury verdict against a trucking company for disability discrimination. The company maintained a written “Open Door” policy, and an unwritten policy that prohibited any driver who self-reported alcohol abuse from ever returning to driving. The EEOC sued after an employee who availed himself of the Open Door policy to self-report an alcohol addiction was banned from any future driving for the company. Even though the company offered the driver a part-time dock position as an accommodation, the EEOC successfully argued that the employer failed to “make an individualized determination as to whether the driver could return to driving and provide a reasonable accommodation of leave to its drivers for them to obtain treatment,” and that “to maintain a blanket policy that any driver who self-reports alcohol abuse could never return to driving—with no individualized assessment to determine if the driver could safely be returned to driving—violates the ADA.”

Employees need to be able to engage in protected activity without any retribution or other negative consequences. In this case, the employer learned of a disability and failed to engage in the interactive process for a reasonable accommodation. In others, employers might retaliate against an employee who uses an open-door policy to complaint about discrimination or harassment.

Open-door policies are laudable. They foster the communication that is necessary between employees and management necessary for a healthy (and hopefully union free) work environment. With that openness, however, comes responsibility—the responsibility to learn information without retaliating. Employees need to train management so that they know what to do with protected information once they learn it, and how to act without violating any of our EEO laws. Without this training, employers are setting up their open-door policies and programs for a litigation fail.

The full press release about this jury verdict is available here.

Old laws meet new technology: sexual harassment via social media

Last week, the EEOC held a public meeting on workplace harassment. The most interesting testimony was provided by Jane Kow, of HR Law Consultants, who spoke about the impact of harassment on the modern workplace. One of the key areas she covered was the intersection of workplace harassment and social media:

The ease and speed of posting or responding to the proliferation of messages and images on social media—sometimes by employees at the 11th hour, right before bed, in 140 characters or less, and oftentimes without aforethought—has spawned employee complaints of harassment, defamation, violation of a right to privacy and a host of other claims. None of this was even imaginable in 1964 when Title VII was enacted (or in 1991 when it was amended). But employers must now interpret an EEOC guidance that was written and cas es that were decided by courts in the old millennia to determine how to apply these rules to regulate conduct in the new workplace of the present and future, transformed by these technological advances. 

Employers are now grappling with how to lawfully regulate employees’ text messages, blogs, and social media activity in the face of potential complaints from co-workers about harassing comments posted or images shared publicly.  

What does this mean for your business. The workplace's boundaries no longer begin a 9 and stop at 5. Technology connects employees to each other 24/7. This added connectivity creates opportunities for greater employee engagement and stronger workplace communities. It also creates opportunities for bad actors to do bad things, like harassment. It's important for employers to keep in mind that agencies and courts will apply the same rules to Facebook harassment as they would to face-to-face harassment. If they aren't treating any differently, neither should you.

More on the importance of being accommodating

Yesterday, I wrote about the need for employers to be more accommodating for their employees’ protected needs. Today, I bring you two real-world illustrations.

• Yesterday, the EEOC announced that it had filed suit on behalf of an employee who was denied the opportunity to return to work following some time off for a cardiac condition.
• Late last year, the EEOC reached an $85,000 settlement with an employer who fired an employee attempting to return to work following time off for cancer chemotherapy treatments.

In both instances, the EEOC made the same point—the ADA imposes on employers an absolute duty to determine whether or not they can accommodate an employee’s disability. Absent that consideration, the law has been violated. Moreover, after engaging in that interactive process, the employer can only deny the request: 1) if it poses an undue hardship, or 2) if the employee cannot perform the essential functions of the job with or without the accommodation. Otherwise, you may find yourself on the receiving end of an EEOC press release, which is not the position you want to be in.

EEOC 0-2 on severance-agreement lawsuits … but does it matter?

Recall that in October, a Chicago federal court dismissed a lawsuit filed by the EEOC against CVS, claiming that the pharmacy retailer’s severance agreements violated Title VII by employing allegedly retaliatory language. That court, however, failed to reach the merits of the case, instead dismissing the EEOC’s claims on procedural grounds (the agency’s failure to engage in pre-suit conciliation), thereby depriving employers guidance on whether certain garden-variety provisions in employment agreements violate Title VII’s anti-retaliation provisions. I held out hope that the practical guidance employers seek on this issue would come from a similar lawsuit pending in Colorado.

Last week, a Denver federal court dismissed that other EEOC severance-agreement-as-retaliation lawsuit. Like the earlier CVS dismissal, however, the dismissal in EEOC v. CollegeAmerica Denver was on procedural grounds, and offers little practical import for employers moving forward on this important issue.

Perhaps if there is any solace for employers looking to sue separation agreements to halt future litigation, and not to buy a future lawsuit by the EEOC, employers can look to footnote 3 in the EEOC v. CVS decision:

The “covenant not to sue” provision prohibits an employee from “initat[ing] or fil[ing] … a complaint or proceeding asserting any of the Released Claims.” The general release of claims is set out in ¶ 7 of the Agreement, but that section also includes the caveat that the release does not limit “any rights that the Employee cannot lawfully waive.” However, there is a specific carve out for an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws”; and further provides, “nor shall this Agreement prohibit [the employee] from cooperating with any such agency in its investigation.” … The verb participate is defined as “to be involved with others in doing something” and “to take part in an activity … with others.” http://www.merriam-webster.com/dictionary/participate. It is not reasonable to construe “the right to participate in a proceeding with any appropriate federal … agency,” to exclude the right of the employee from filing an EEOC charge. And, even if the Separation Agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute resistance to the Act.

In other words, the CVS court, albeit in dicta, believes that the EEOC is chasing an unsupportable claim by arguing that covenants not to file charges violate Title VII’s prohibitions on retaliation.

Employers, however, should not lull themselves into a false sense of security. Neither employer won either of these cases on the merits. For whatever reason, this issue is on the agency’s radar, and it will likely seek another case to prove its point regarding these agreements.

For now, the prudent course of action is to make sure that your agreements clearly and unambiguously, in a provision separate and distinct from the release, waiver, and covenant not to sue, state that employees retain their federally protected rights. I am using something like the following:

Nothing in this Agreement is intended to, or shall, interfere with Employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of any of the provisions of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against any of the Released Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

EEOC files historic lawsuit challenging biometric testing by employers

It’s no secret that health insurance costs are out of control. To help combat this surge, many employers have turned to biometric testing for their employees. Biometric testing is part of corporate wellness programs where employees measure certain levels, such as blood pressure and cholesterol, for breaks on insurance premiums under the Affordable Care Act.

If the Affordable Care Act expressly permits this testing, then why is the EEOC claiming that Honeywell’s biometric testing program violates the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act?

On Monday, the EEOC filed a lawsuit seeking a temporary restraining order declaring Honeywell’s biometric testing illegal. According to the EEOC’s lawsuit, ­Honeywell’s program creates up to $4,000 in penalties for employees unless they and their spouses take blood and medical tests that can identify smoking, diabetes, high blood pressure, obesity and other health problems. The Minneapolis Star Tribune quotes an EEOC attorney, who said, “Honeywell’s tests and threatened penalties go too far because they are not job-related and are not consistent with any business necessity…. They can only do that in ­situations where it’s ­voluntary for the employee to answer.”

For its part, Honeywell has called the lawsuit “frivolous”—

The Chicago EEOC office is unfamiliar with the details of our wellness programs and woefully out of step with the healthcare marketplace…. The incentives we provide are specifically sanctioned by two separate Federal statutes—HIPAA and the ACA. Honeywell’s wellness plan incentives are in strict compliance with both HIPAA and the ACA’s guidelines, which were designed by Congress to encourage healthier lifestyles while helping to control healthcare costs. No Honeywell employee has ever been denied healthcare coverage or disciplined in any way as a result of their voluntary decision not to participate in our wellness programs…. We’re proud to provide employees with the opportunity to lead healthier lifestyles and are 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.

Because the EEOC is seeking a TRO, I would expect this case to unfold quickly. I will keep everyone updated as this important story develops. Special thanks to Kate Bischoff for brining this to my attention.

Do personality tests pass the ADA-compliance test?

The ABA Journal (hat tip: Overlawyered) is reporting that the EEOC is investigating whether several well-known companies are violating the ADA by using pre-employment personality tests to screen applicants.

I cautioned employers about this issue three years ago. This is what I said.

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Despite the apparent prevalence of these types of tests, there is very little guidance available on their legality. Karraker v. Rent-A-Center (7th Cir. 2005) is the seminal case. As Karraker points out, the legality of a personality test by an employer hinges on whether it qualifies as a “medical examination” protected under the ADA. 

The Karraker court concluded that the ADA covered the MMPI personality test as a protected medical exam. In reaching its decision, the court drew a key distinction between psychological tests that are designed to identify a mental disorder or impairment (medical examinations), and psychological tests that measure personality traits such as honesty, preferences, and habits (not medical examinations). Because the MMPI revealed, in part, potential medical diagnoses such as paranoid personality disorder, the court concluded that it was a protected medical examination. Other personality tests may not dictate the same result, depending on the types of results provided.

Merely because something is a “medical examination” does not mean its use is illegal under the ADA. It merely means that the ADA places certain limits on its use:

	Personality Test Is A Medical Exam	Personality Test Is Not A Medical Exam
Prior to an offer of employment:	Personality tests are prohibited.	No limits on the use of personality tests.
After an applicant is given a conditional job offer, but before s/he starts work:	Personality tests are permitted, regardless of whether they are related to the job, as long as the employer does so for all entering employees in the same job category.	No limits on the use of personality tests.
After employment begins:	Personality tests are permitted only if they are job-related and consistent with business necessity.	No limits on the use of personality tests.

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What does all this mean? The use of personality tests raises complex legal and business issues, even more so now that this issue is on the EEOC’s radar. If you are considering using personality tests to screen applicants or current employees, tread carefully and not without the input of your employment counsel.