EEOC Lawsuit Challenges Flambeau Over Wellness Program

Threats of Insurance Cancellation and Discipline Make Program Involuntary and Violate Disabilities Act, Federal Agency Charges

MADISON, Wisc. - Flambeau, Inc., a Baraboo, Wis.-based plastics manufacturing company, is alleged to have violated federal law by requiring an employee to submit to medical testing and assessment in connection with a "wellness program" or face dire consequences. That violated the Americans with Disabilities Act the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed yesterday. The "wellness program" required that employees submit to biometric testing and a "health risk assessment," or face cancellation of medical insurance, unspecified "disciplinary action" for failing to attend the scheduled testing, and a requirement to pay the full premium in order to stay covered, according to the EEOC.

In its lawsuit, the EEOC alleged that when employee Dale Arnold did not complete the biometric testing and health risk assessment, Flambeau cancelled his medical insurance and shifted responsibility for payment of the entire premium cost to him. The EEOC said employees who had taken the biometric testing and health risk assessment, by comparison, did not have their coverage cancelled involuntarily, and were only required to pay 25% of their premium cost.

The EEOC contends that the biometric testing and health risk assessment constituted "disability-related inquiries and medical examinations" that were not job-related and consistent with business necessity as defined by the Americans With Disabilities Act (ADA). These alleged actions and severe consequences for not providing prohibited information as part of its "wellness program" violate Title I of the ADA, which prohibits disability discrimination in employment, including making disability-related inquiries.

The EEOC brought suit after first attempting to reach a pre-litigation settlement through its conciliation process. The case (EEOC v. Flambeau, Inc., Civil Action No. 3:13-cv-00638) was filed in U.S. District Court for the Western District of Wisconsin, and is assigned to U.S. District Judge Barbara B. Crabb and Magistrate Judge Stephen L. Crocker.

This lawsuit is the EEOC's second to directly challenge a wellness program under the ADA. Earlier hearings by the EEOC on wellness programs revealed that a majority of employers now offer some sort of wellness program - 94 percent of employers with over 200 workers, and 63 percent of smaller ones, according to Karen Pollitz of the Kaiser Family Foundation, which researches issues relating to health care.

"Employers certainly may have voluntary wellness programs - there's no dispute about that - and many see such programs as a positive development," said John Hendrickson, regional attorney for the EEOC Chicago district. "But they have actually to be voluntary. They can't compel participation in medical tests or questions that are not job-related and consistent with business necessity by cancelling coverage or imposing enormous penalties such as shifting 100 percent of the premium cost onto the back of the employee who chooses not to participate. Having to choose between complying with such medical exams and inquiries, on the one hand, or getting hit with cancellation or a penalty, on the other hand, is not voluntary and not a choice at all."

Flambeau, with 1600 employees, has locations throughout the United States and is wholly owned by Nordic Group of Companies, Ltd., also based in Baraboo.

The EEOC's Chicago District Office is responsible for processing discrimination charges, administrative enforcement, and the conduct of agency litigation in Illinois, Wisconsin, Minnesota, Iowa and North and South Dakota, with Area Offices in Milwaukee and Minneapolis.

The EEOC is responsible for enforcing federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at http://www.eeoc.gov.