The debate over corporate wellness programs continues in courts throughout the country. The Seventh Circuit Court of Appeals recently affirmed a district court grant of summary judgment which upheld a wellness program, but on different grounds than the district court. The Seventh Circuit’s opinion didn’t move the needle much in either direction, although the opinion is instructive for employers instituting wellness programs. For employers, the key factor continues to be the voluntary nature of the wellness program and to the extent possible, compliance with the EEOC’s wellness program guidance.
In this case, defendant Flambeau, Inc. adopted an employee wellness program. It required its employees, as a condition of receiving employer-subsidized health insurance, to fill out a medical questionnaire and to undergo biometric testing. One employee did not meet those requirements in time for the 2012 benefit year. As a result, he and his family were briefly without health insurance. He filed a complaint with the Equal Employment Opportunity Commission (EEOC), and the EEOC then filed suit against Flambeau.
The EEOC contended that Flambeau’s medical questionnaire requirement violated the ADA’s ban on involuntary medical examinations. See 42 U.S.C. § 12112(d)(4). The district court noted that the parties took ambitious positions regarding the exempt status of wellness programs under the ADA’s safe harbor provision. However, the Seventh Circuit concluded that the statutory debate need not be reached since the EEOC’s action was moot.
The district court granted Flambeau’s motion for summary judgment finding that some wellness programs, including this one, fell within the ADA’s safe harbor provision. On January 25, 2017, the Seventh Circuit affirmed, on mootness grounds, the district court's dismissal of the EEOC's complaint alleging that the defendant's mandatory employee wellness program violated the ADA’s ban on involuntary medical examinations. The Seventh Circuit found that the defendant's wellness program was covered by the ADA's insurance safe harbor. See 42 U.S.C. §§ 12112(d)(4) and 12201(c).
Additionally, the EEOC’s suit was determined to be moot because: (1) the defendant's employee who originally filed the EEOC claim resigned from his job with the defendant six months prior to the EEOC filing the lawsuit; (2) the defendant had ended its mandatory medical testing program for cost-saving reasons prior to the EEOC filing the lawsuit; and, (3) the defendant's employee could not establish any compensatory or punitive damages arising out of the defendant's implementation of its wellness program.
In addressing the punitive damages issue, the Seventh Circuit recognized that the EEOC’s guidelines are an important body of experience and informed judgment entitled to some deference. They are not, however, controlling law. The Seventh Circuit stated, “An employer’s or its attorney’s disagreement with EEOC guidance does not by itself support a punitive damages award, at least where the guidance addresses an area of law as unsettled as this one.”
Also, the EEOC was not entitled to injunctive relief where the defendant had halted its mandatory wellness program. The fact that the defendant had only voluntarily halted its mandatory wellness program did not preclude a mootness finding where the record showed that there was no “reasonable expectation” that the defendant would reinstate its mandatory wellness program. The Seventh Circuit rejected the EEOC’s argument that the voluntary cessation exception to the mootness doctrine applied to these facts.
The debate over wellness programs continues throughout the country. The resolution of this issue in the Seventh Circuit continues to another day. However, the key factor continues to be the voluntary nature of the wellness program as well as the true purpose of the program. Johnson & Bell lawyers can assist in the assessment of the legality of your wellness program, if that is an issue you’re encountering.
