Harassment Claims Continue To Capture Spotlight

In light of the sexual abuse allegations against high profile individuals and the subsequent #MeToo Movement, EEOC Acting Chair Victoria Lipnic has announced workplace harassment issues are a priority for the agency. She pointed out that harassment “causes serious harm to women and men in all kinds of jobs across the country,” and commended not only the EEOC legal teams for their work but also the individuals who came forward with complaints, many of whom alleged they suffered retaliation as a result.

One case against a country club in California involves claims of sexual conduct by a manager directed at female employees, including soliciting naked pictures, grabbing their buttocks, attempting to kiss them, and requiring sexual favors for job benefits. The EEOC lawsuit alleges that when women refused, the manager threatened termination and reduced their working hours in retaliation.

A sports bar in New Mexico also faces an EEOC lawsuit for sexual harassment of female employees by managers and coworkers. Reported behavior included requests to “show more cleavage” in their uniforms, crude comments about their breasts and buttocks, comments by male employees about their penises, text requests for sex, and unwelcome touching. This case also alleges retaliatory actions against the women for complaining.

EEOC’s Push Includes Other Claims As Well

But sexual harassment is by no means the only kind of claim being faced by hospitality employers. The recent wave of EEOC litigation also includes claims of age discrimination, pregnancy discrimination, and failure to accommodate employees under the Americans with Disabilities Act (ADA), among others.

For example, a Georgia-based sports bar is facing an EEOC lawsuit alleging pregnancy discrimination. The lawsuit alleges that a pregnant bartender was demoted to a lower-paying server position because of her pregnancy. EEOC officials brought the lawsuit stating that “physical appearance alone is never a sufficient reason for taking adverse action against a pregnant employee” and depriving her of income.

The most recent lawsuit was filed against the Grand Hyatt in New York City on August 15, alleging failure to accommodate a front desk employee with a disability. The EEOC alleges that the hotel violated the ADA by forcing the employee to stand while performing his duties despite his request for a sitting accommodation due to a spine condition. The lawsuit alleges that the hotel initially accommodated the employee by allowing him to sit, then required him to resume standing, causing him significant pain and forcing him to take an unpaid leave.

Conclusion

The wave of lawsuits by the EEOC shows that the agency is beefing up its enforcement efforts in priority areas. The EEOC’s most recent Strategic Enforcement Plan outlines the agency’s priorities and includes ensuring that employers comply with obligations to accommodate disabled employees, protecting pregnancy employees’ rights, and stamping out harassment and retaliation in the workplace.

Now is the time to review your EEO, harassment, reasonable accommodation, and anti-retaliation policies to ensure that they meet modern standards. You should also train your managers and supervisors to ensure they are enforcing those policies, and confirm that employees are aware of your company’s commitment to a discrimination-free and harassment-free workplace.

For more information, contact the author at ARyan@fisherphillips.com or 404.240.4219.

The EEOC finally issued a proposed rule on April 20. The following is what employers need to know in a “Q&A” format.

What problem is the EEOC trying to resolve?

The quick answer is an apparent conflict between the ADA rules on employer “medical inquiries,” on the one hand, and the “wellness program” provisions of the HIPAA/ACA, on the other.

Title I of the ADA (the part of the ADA that applies to private sector employers) generally prohibits employers from making “medical inquiries” of current employees unless the inquiries are “job-related and consistent with business necessity” (for example, to verify the need for a reasonable accommodation). The general rule is that employers are not supposed to be asking for medical information from current employees.

There are some limited exceptions to this rule, including an exception for medical inquiries made in connection with a “voluntary wellness program.”

As employer wellness programs have become more popular, many employers began offering specific rewards or penalties to employees based on whether they participated in the programs and even on whether they achieved certain “results.” As will be discussed in more detail below, the HIPAA and the ACA specifically authorize wellness programs to offer incentives for “participation” and “outcomes” under certain circumstances. However, the question arose whether the use of such incentives would render the wellness program not “voluntary” for ADA purposes. If the wellness program was not voluntary because of the incentives, then any requests for employee medical information made in connection with the wellness program would violate the ADA.

(Title I of the ADA would not have an impact on medical inquiries made, say, to the family member of an employee who might also be eligible to participate in the employer’s wellness program.)

Thus, it was possible that an employer could offer a wellness program that was authorized and lawful under the HIPAA/ACA but still be vulnerable to charges and lawsuits under the ADA. The EEOC’s proposed rule seeks to address this problem, and for the most part, it should be welcomed by employers who offer wellness programs.

What does the proposed rule say, in a nutshell?

The proposed rule says that a wellness program can still be “voluntary” for ADA purposes if the program provides “incentives” for employees (both rewards and penalties), as long as the employer complies with the wellness incentive requirements of the HIPAA/Affordable Care Act.

There are two caveats: The wellness program would have to be associated with a group health plan (either insured or self-insured), and the EEOC proposals do not exactly match the HIPAA/ACA rules, although they are reasonably close.

Can you give us a recap of the HIPAA/ACA requirements?

Under the HIPAA/ACA scheme, there are two types of wellness programs. A “participatory” program is one that rewards employees just for participating and does not require a specific goal to be met. (An example would be an employer who reimburses employees for fitness club memberships.) Under the HIPAA/ACA, participatory programs can be offered without limitation, as long as they’re available to all similarly situated individuals.

The other type of wellness program is a “health-contingent” program. There are two types of “health-contingent” programs: (1) activity-only programs, in which the employee is rewarded for completing an activity but doesn’t have to achieve or maintain an outcome (for example, “we’ll pay you $100 if you walk a mile three days a week for a year”); and (2) outcome-based programs, in which employees are rewarded for achieving or maintaining results (for example, “we’ll pay you $100 if you keep your BMI at or below 25 for a year, or if you quit smoking”).

If the program is health-contingent, employers are allowed to offer incentives (carrots or sticks) if –

• Employees are allowed to try to qualify at least once a year,
• The total reward offered doesn’t exceed 30 percent of the total cost of employee-only coverage under the plan or the total cost of family coverage if dependents are also allowed to participate in the program (“total” means the employee’s and the employer’s share). The percentage is up to 50 percent for tobacco prevention or cessation,
• The program is reasonably designed to promote health or prevent disease,
• The full reward must be available for all similarly situated individuals, and reasonable alternatives must be offered to those who can’t qualify, and
• The availability of reasonable alternatives must be disclosed in plan materials and in any disclosure telling an individual that he or she did not meet an initial outcome-based standard.

Under the HIPAA/ACA, the 30 percent/50 percent incentive limit applies only to “health-contingent” programs. HIPAA and the ACA have no limit on rewards that apply to “participatory” programs (if the programs are available to all similarly situated individuals).

The EEOC’s proposed rule is slightly different.

How does the EEOC proposed rule contrast with the HIPAA/ACA rule?

The EEOC would allow employers to offer incentives for employee participation in wellness programs associated with group health plans if the total reward does not exceed 30 percent of the total cost of employee-only coverage under the plan for both participatory and health-contingent wellness programs. The EEOC proposed rule does not allow a 50 percent reward level for tobacco cessation programs (unless there are no associated disability-related questions or medical exams), and the total cost used in the reward calculations does not take into account family-level coverage, even where dependents can participate in the program.

In addition, the wellness program must be completely voluntary. The EEOC would define “voluntary” as follows:

• Employees aren’t required to participate in the wellness program,
• Health insurance coverage is not denied or made more difficult to get if the employee chooses not to participate (with the exception of the permitted “incentives”), and
• The employer does not take adverse action against an employee for refusing to participate . . . as this employer allegedly did.

The EEOC invites the public to comment on the proposed rulethrough June 19. The agency is particularly interested in comments pertaining to how much medical information an employee should be required to disclose to be eligible for an incentive, whether the rule should require that the incentives not render health insurance “unaffordable” within the meaning of the ACA, issues related to the “notice” requirement, how to treat wellness programs that are not associated with group health insurance, as well as other topics.

The employer would also be required to provide a notice “that clearly explains what medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions on its disclosure, and the methods the covered entity will employ to prevent improper disclosure of the medical information.”

The wellness program would be required to disclose medical information to the employer only in aggregated, non-individually-identifiable form, “except as needed to administer the health plan.”

Are there any other issues to consider under the HIPAA/ACA?

Although the EEOC rule is currently in proposed form, we expect any final version to still be somewhat different from the HIPAA/ACA requirements for wellness programs. For example, one of the primary requirements of a outcome-based program under HIPAA is the ability of an employee to meet a “reasonable alternative standard” to receive the reward. Participants in the program must be clearly informed of that option, and it remains to be seen how that notification will be coordinated with the notice proposed by the EEOC. A related issue is the intersection of the “reasonable alternative standard” under HIPAA with the reasonable accommodation and interactive process obligations under the ADA. The EEOC’s Interpretive Guidance to the proposed rule says that provision of a “reasonable alternative standard” along with the required notification will generally satisfy the employer’s reasonable accommodation obligations under the ADA, but no specifics are given. Moreover, the Interpretive Guidance notes that under the ADA an employer would have to make reasonable accommodations for an employee who could not be in a “participatory” program because of a disability, even though the HIPAA/ACA rules do not require a “reasonable alternative standard” for participatory programs.

Also, details about wellness programs commonly appear in ERISA-governed summary plan descriptions, so will the EEOC rules also have to appear there as well?

There are similarities between the employee benefits issues affecting wellness programs, on the one hand, and the ADA and employee-relations issues, on the other, but the differences are equally important and will hopefully be addressed by the EEOC in the final rules expected to be issued later this year.

What should employers do? 

The proposed rule describes certain employer “best practices,” as follows:

• Employers should ensure that employees who handle medical information know their obligations under the laws.
• Employers should adopt privacy policies for collection and handling of employee medical information, assuming that they have not already done so.
• If medical information is stored electronically, it should be encrypted and other security measures implemented such as password protection and firewalls.
• If possible, employees who handle medical information should not be “making decisions related to employment, such as hiring, termination, or discipline.” If this is not possible, then the employer should ensure that there is no discrimination based on an employee’s disability.
• Breaches of confidentiality should be promptly and effectively addressed, and the affected employees should be informed immediately.
• Employers should take appropriate action against an employee who breaches confidentiality, and should “consider discontinuing” their relationships with vendors who breach confidentiality.

Why doesn’t the EEOC proposed rule have a 50-percent incentive for tobacco-related programs, since the HIPAA/ACA does?

The EEOC explained that it did not include the 50 percent incentive for tobacco programs because, it said, most of those programs do not seek employee medical information at all. If not, there would be no ADA issue. But if a tobacco program does seek such information (for example, through testing for nicotine, or monitoring blood pressure), then the tobacco program would have to be included in computing the 30-percent limit for incentives.

Did the proposed rule address the employer’s right to get medical information from an employee’s family members, who may be covered under the employee’s health insurance and might be eligible for participation in the wellness program?

No, because Title I of the ADA applies only to employers and employees. Medical inquiries about an employee’s family member would, of course, be covered under the Genetic Information Nondiscrimination Act, which is also enforced by the EEOC. The EEOC says it will issue guidance on wellness and the GINA “in future EEOC rulemaking.”

Did the proposed rule contain anything else of interest?

Yes. The EEOC has explicitly disagreed with a wellness/ADA decision from the U.S. Court of Appeals for the Eleventh Circuit, Seff v. Broward County. At issue in theSeff case was a $20-per-paycheck penalty that employees had to pay if they chose not to participate in the county’s wellness program. The court found that the county’s program fell within a “safe harbor” in the ADA, which provides that a covered entity is not prohibited “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law.” Because the program fell within the safe harbor, the court said, it was irrelevant whether the program was “voluntary” or whether medical inquiries made in connection with the program violated the ADA.

The EEOC’s position is that this “safe harbor” provision in the ADA does not apply to wellness programs.

Employers who operate in the Eleventh Circuit states of Alabama, Florida, or Georgia can continue to follow Seff for the time being. However, employers who operate in other states may choose to follow the EEOC’s position once its proposal becomes final. The conflict between the EEOC and the Eleventh Circuit will probably be resolved eventually by the courts.

___________________________________________________________________

Authors:M. Brian Magargle | Of Counsel : Since 1993, Brian Magargle has practiced employment law, and he began practicing in the area of employee benefits and ERISA in 1995.   Robin E. Shea | Partner : Robin Shea has more than 20 years’ experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act.

The EEOC believes that employers who use criminal background checks should develop a targeted screening that considers the type of crime, how long ago, and how it would compromise the position for the prospective employee. And that those excluded from that opening be given an opportunity for an individualized assessment to determine whether the policy as applied is job related and consistent with the business need. It requires employers to document and justify their use of the criminal history when making an employment decision.

The safest way to handle the new EEOC guidelines is to not inquire about criminal history or if that isn’t possible, seek legal counsel as to what policies need to be created around specific job requirements. Any criminal history that is used in a negative employment decision must be job related. Employment application questions should be directed to your legal counsel (who is hopefully versed in employment law). You can also purchase insurance known as Employee Practices Liability Insurance from your insurance professional to help you through an unforeseen event.

It’s bad enough when one has to defend against fabricated allegations about racial slurs and name calling, let alone when it apparently, in fact, happened. Such a situation is a nightmare for an employer, and to state the obvious, should never have occurred.  But never say that “it couldn’t happen in my company.”

How Could This Happen?

The conduct described in this case is reprehensible. But did it start somewhat innocently and escalate to something this terrible?  Was this a decent company asleep at the wheel and not a throwback to a place found in the recent movie, “Django Unchained”?

We can only speculate, but according to the EEOC’s lawsuit, Contonius Gill and Robert Floyd, Jr., both African-American, worked as truck drivers for A.C. Widenhouse. From as early as May 2007 through at least June 2008, Gill was repeatedly subjected to unwelcome derogatory racial comments and slurs by the facility’s general manager, (who was also his supervisor); the company’s dispatcher; several mechanics; and other truck drivers, all of whom are white. The comments and slurs included “n—–r,” “monkey” and “boy.” Gill testified that on one occasion he was approached by a coworker with a noose and was told, “This is for you. Do you want to hang from the family tree?” Gill further testified that he was asked by white employees if he wanted to be the “coon” in their “coon hunt.”

The other employee, Robert Floyd, testified that when he was hired in 2005, he was the only African-American working at the company. Floyd said the company’s general manager told him that he was the company’s “token black.” Floyd testified that on another occasion the general manager told him, “Don’t find a noose with your name on it,” and talked about having some of his “friends” visit Floyd in the middle of the night. Gill repeatedly complained about racial harassment to the company’s dispatcher and general manager, and Floyd complained to an owner of the company, but the harassment continued, according to testimony

Action Points

Absolutely nothing will get the EEOC’s attention faster than allegations of nooses, KKK markings or use of racial slurs like “coon.” The EEOC is actively looking for such cases to litigate so as to “send messages” to discourage bad behavior. They may not be too picky about their fact checking, so if you receive an EEOC charge, even if the claim seems patently frivolous, call counsel. The EEOC is especially interested in cases where they believe that the complained of behavior suggests systemic discrimination, which may broaden into a class action or company wide scrutiny.

Our advice? Stop bad behavior before it gets so bad. Everyone expresses outrage at the allegations in this type of case, but what kind of culture allowed things to get to that point?

Ask yourself: “What is human resource’s role or upper management’s in preventing this kind of problem?”

Does your company take seriously its Complaint, Non-Discrimination and No-Harassment policies? Do you regularly train employees and supervisors . . . or, just pay lip service to the idea?  Now, ask these same questions about each of your sites.

Annually train supervisors about effective discipline and discharge. Many supervisors come up through the ranks and do not know how to deal with such conduct.  Don’t focus solely on Non-Discrimination and No-Harassment obligations – instead, demand “professionalism.”  Always promptly investigate even seemingly minor claims and respond to the claimant.

Finally, remember that lawsuits “walk into your workplace on two feet.” I am not focusing on legitimate claims. I am talking about fabricated or frivolous claims. There seems to be a self-selection process where the employees with the bogus discrimination claims file suits, and individuals with genuine grievances, simply get another job. Neither outcome is good.

So, in addition to maintaining a professional workplace where such behavior doesn’t occur, recognize the type of hire who may use such claims as a means of retaliation for some grievance, or who always assumes that any adverse action is due to discriminatory intent rather than their own performance.

The most effective action an employer can take to avoid an EEOC claim is to create a culture and environment that encourages workforce diversity and discourages employment discrimination in any form. However, even when or if those measures don’t insulate the employer from being named as a respondent in an EEOC charge filing, there are still other effective strategies that can help defend the claim and avoid litigation.

• Auditing policies to ensure compliance with antidiscrimination laws demonstrates cognizant recognition.

A robust policy that explicitly prohibits discrimination, harassment and other related conduct is a key step in the employer’s defense. A policy that: 1) specifies the classes protected under state and federal laws, 2) defines the prohibited conduct, 3) delineates a complaint procedure, 4) promotes confidentiality, and 5) identifies disciplinary action for policy violations, not only educates the workforce about, but also demonstrates the employer’s understanding of, the law.

The policy should also include a strong anti-retaliation statement, encouraging employees to report complaints of unlawful conduct without fear of reprisal and providing employees an avenue to report acts of retaliation.

• Regular, effective training of managers and nonsupervisory employees on antidiscrimination policies establishes expectations.

Providing comprehensive training to managers on how to, first, recognize the signs and symptoms of discrimination and, second, effectively address the prohibited behavior, demonstrates the employer’s commitment to prevention. Likewise, mandating employee training that is thorough and detailed and that provides realistic examples of prohibited conduct and reporting requirements, signifies the employer’s commitment to awareness. Employers should take care to reemphasize the commitment by reflecting the import of the training in performance reviews and discipline.

• A timely and remedial investigation of complaints reflects a steadfast resolve.

Responding to an employee complaint in a timely manner affirms the gravity of the concern and signals the employer’s seriousness about addressing the issues. Fashioning discipline that is not only appropriate but corrective and potent, where warranted, emphasizes that the employer’s remedial actions are designed to be effective and not merely antiseptic. Also, an important step often missed is the communication of the investigation outcome to the complainant. While confidentiality considerations exist at this stage, the employee should still be notified that the investigation has been concluded and that appropriate action is being taken, without identifying the specific disciplinary decision.

• When internal complaints are made, protect the complainant from retaliation.

Once an employee complains, the employer must exercise “super-human restraint” to avoid negative treatment of the complainant. While there is a natural tendency for one accused of misconduct to strike back at the persons who attack them and accuse them of wrongdoing, the law prohibits this action. Instead, the employer should be proactive and engage with the complainant, explain its prohibition against retaliation, and follow up with the employee later to ensure there have been no problems. Additionally, subsequent employment actions taken against the employee should be closely monitored to avoid the appearance of retribution. The EEOC will certainly scrutinize the extent to which proposed employment action against the complainant is consistent, when compared with similar conduct with actual practices and supported by documentation.

• Protect and preserve your lawfully made decisions by documenting the investigation and its results.

Throughout the process, the employer will have identified key witnesses and documents pertinent to the investigation. Maintaining a written record of the witnesses interviewed and documents reviewed validates the investigation. Preparing summaries of findings from the investigation can provide a corroborating source of information. Documenting the investigation can also prove important when necessary to confirm the frequency and duration of time spent interviewing the complainant, especially when presented with objections challenging the thoroughness of the investigation. Also, before taking any disciplinary action, make sure all the reasons for the action are documented, and there is objective evidence supporting the reasons and not contradicted by any other documentation.

• If an EEOC claim is pursued, respond with diligence.

While a quick response to an EEOC claim is often tempting—fueled primarily by the need for focus on the employer’s daily operations—avoid the temptation. A well-reasoned response, supported by proper documentation, is always a better defense. The EEOC is more likely to dismiss a claim where evidence is presented that the employer interviewed relevant witnesses, reviewed and analyzed pertinent documentation, assessed the facts and their relationship to the EEO laws at issue, and made sound employment decisions based on legitimate business factors such as poor job performance or workplace misconduct.

Also remember, regular and interactive discussions with the EEOC investigator can be an effective, but oftentimes forgotten, practice. Contact the investigator and discuss the claim—take every opportunity available to plead the employer’s case and argue its position.

• Be receptive to the prospect of early resolution in the event of a charge filing.

Even when these strategies have been implemented, sometimes employers are faced with problematic facts demonstrating the potential for monetary exposure from an EEOC claim. In those instances, the employer is prudent to consider the risk/reward analysis of resolving the EEOC claim sooner rather than later. When balancing the scales, oftentimes the cost to resolve the EEOC claim at the early stage is more favorable than the ultimate cost to the employer’s organization, should litigation ensue. Litigation can involve the immeasurable cost of distractions to the employer’s key staff involved in the underlying conduct, who will inevitably have to invest time and resources unrelated to the company’s daily operations to fight the claim, and can negatively impact employee morale, cause poor productivity and create publicity that can potentially harm the employer’s reputation.

Even if the employer effectively prevents employees from discriminating against co-workers and never bases an employment decision on an employee’s protected characteristic, there may still be instances where the EEOC remains unsatisfied. Nonetheless, utilizing these good-faith efforts to prevent and remedy employment discrimination could still serve the employer well in avoiding the EEOC’s radar.