Wyche at Work: May 2013 Employment Update

Prepared by Wyche attorneys, Ted Gentry and Andy Coburn
May 2013

The Emergence of Genetic Discrimination Claims

Earlier this year, Wyche at Work focused on the importance of screening job applicants in a way that does not reveal information about a protected characteristic – such as age, nationality, or disability — either directly through interview questions or indirectly through social media websites. One topic that should be avoided — family medical history – has been in the forefront of HR concerns recently as the Equal Employment Opportunity Commission filed its first lawsuit alleging genetic discrimination based on information an employer obtained indirectly through a contract medical examiner.

The Genetic Information Nondiscrimination Act (“GINA”) prohibits discrimination against employees or applicants because of genetic information, which includes family medical history, and also prohibits employers from requesting, requiring or purchasing such information. As part of its identified priority of addressing emerging and developing issues in equal employment law, the EEOC filed its landmark GINA lawsuit against a fabric distributor who made a conditional offer of employment to an applicant and then sent her to its contract medical examiner for a pre-employment drug test and physical. The examiner required the applicant to complete a questionnaire and disclose separately listed disorders in her family medical history, including heart disease, hypertension, cancer, tuberculosis, diabetes, arthritis and mental disorders. Among other issues, the EEOC claimed that the employer violated GINA by requesting family medical history. The employer settled for $50,000 and also agreed to take certain actions to prevent future discrimination.

GINA took effect in 2009 but, until now, the EEOC has provided little guidance on how it will be interpreted and applied. The EEOC’s stated priorities and the quick resolution of its first lawsuit could mean that the agency will be focusing more attention on genetic information. Let us know if you have any questions about this emerging issue in employment discrimination.

EEOC Updates Guidance Targeting Specific Disabilities

If you have employees or applicants with specific disabilities, you may want to consult the Equal Employment Opportunity Commission’s revised guidance on protection against disability discrimination. The guidance is part of the EEOC’s Question and Answer Series and covers cancer, diabetes, epilepsy and intellectual disabilities. The documents explain when you may ask an applicant or employee questions about his disability, how to treat voluntary disclosures, how to handle requests for reasonable accommodations that may be needed, how to respond to safety concerns, and how to ensure that an employee is not harassed because of his disability.

Will the EEOC Scrutinize Wellness Programs?

Concern for employees’ health and the rising cost of health insurance has led employers nationwide to implement voluntary wellness programs.  Increasingly, employers have tried different programs, incentives or penalties to coax more employees to participate. The EEOC has been examining the interplay of these programs with statutes like the Americans with Disabilities Act. Earlier this month, the EEOC held a public meeting that addressed the potentially legal and illegal ways to incentivize participation in wellness programs. The commissioners appeared to agree that (i) a program without any incentives offered for free, and (ii) a program offering a gift card as incentive to participate were legal. The commissioners were split on the legality of a program where employees who did not participate were charged more on their health insurance premiums. The commissioners did, however, agree that future EEOC clarification on wellness programs would be a benefit to both employees and employers.

Stay tuned to Wyche at Work for further updates on wellness programs and any EEOC decision or guidance on these programs. Feel free to contact Wyche with any questions or concerns you may have about establishing or reviewing an employee wellness program.

S.C. Court of Appeals Rules in Employee’s Defamation Case

A recent South Carolina Court of Appeals decision discussed the tort of defamation in the employment relationship. In this case the defendant told the plaintiff’s employer that the plaintiff had a history of drug dependency, was fired from her previous job for illegally accessing sensitive client information, and had an extensive criminal history. The Court ultimately held that the plaintiff suffered actionable harm because the defendant’s statements attacked the employee’s fitness for her profession. The facts of this case were unusual, and although it did not directly address a case involving an employer and a former employee, it is instructive and provides a cautionary tale for employers and human resources personnel alike. An inaccurate reference that looks and feels retaliatory can expose individuals and employers to defamation suits.

Employers should remember that South Carolina law provides them with a safe haven for some reference-based claims. Under the South Carolina Employer Reference Act, employers are granted immunity from reference-based suits if:

  1. the reference is in response to a written request about a current or former employee;
  2. the information provided relates to written records of employee evaluations, reasons for termination or job performance; and
  3. the employer does not know or have reason to know the information provided is false.

Do not hesitate to contact Wyche with questions about responding to employee defamation suits or launching a standardized reference policy.

Healthcare Reform – The Employer “Pay or Play” Mandate

The following update is from Wyche lawyer Andy Coburn, who advises and assists public and private company clients in the design and implementation of executive compensation arrangements, equity compensation plans and broad-based employee benefits.

A key element of the federal health care reform law causing concern for employers is the “pay-or-play” employer mandate, which generally takes effect January 1, 2014.  The Patient Protection and Affordable Care Act requires “large employers” to offer certain minimum health benefits to their employees or such employers may be required to pay a penalty to the federal government.  A “large employer” employs more than 50 full-time or full-time equivalent employees. A full-time employee is generally an employee working at least 30 hours per week. Full-time equivalents are determined by adding up all of the time worked by part-time employees.  Employers should get expert assistance to determine if the mandate applies and, if it does, to determine whether any employer health coverage offered meets the minimum requirements or what penalty might be due if coverage is inadequate or no coverage is offered. Business owners with multiple companies and/or part-time or contract workers need to take particular care in ensuring they understand how the rules may apply to these entities.  Contact us if we can provide assistance to determine if your company is subject to the mandate.

If you have any questions about these or other workplace law topics, please contact Ted Gentry.

This update is provided by Wyche for educational and informational purposes only and is not intended and should not be construed as legal advice.

Picture of J. Theodore (Ted) Gentry

J. Theodore (Ted) Gentry

Ted Gentry focuses his practice on counseling colleges and universities and on appellate litigation. Ted’s career handling complex litigation gives him valuable insights into the ways that today’s decisions affect tomorrow’s disputes.

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