Wisconsin Employer Resolves EEOC Case Involving Wellness Program and Retaliation

Orion Energy Systems to Pay $100,000 and Undergo Training

MINNEAPOLIS -- The U.S. Equal Employment Opportunity Commission (EEOC) announced today that it has resolved its suit against Orion Energy Systems, a Manitowoc, Wis., lighting company, challenging a wellness program under the Americans with Disabilities Act (ADA) and alleging that the employer retaliated against an employee who objected to the program by terminating her.

In its suit, the EEOC contended that Orion instituted a wellness program that unlawfully required medical examinations and made disability-related inquiries. When an employee, Wendy Schobert, declined to participate in the program, Orion shifted responsibility for payment of the entire premium for her employee health benefits from Orion to Schobert. Shortly thereafter, Orion fired Schobert, the EEOC said.

The EEOC maintained that Orion's wellness program violated the Americans with Disabilities Act (ADA) as it was applied to Schobert, and that Orion unlawfully retaliated against Schobert because of her good-faith objections to the wellness program. The EEOC filed its lawsuit in U.S. District Court for the Eastern District of Wisconsin (EEOC v. Orion Energy Systems, Inc., No. 14-CV-1019 E.D. WI) after first attempting to reach a pre-litigation settlement through its conciliation process.

Upon cross-motions for summary judgment, the district court rejected the employer's argument that the insurance safe-harbor provision in the ADA immunizes wellness plans from ADA scrutiny. The court concluded that the EEOC's recently issued regulations on the ADA's safe-harbor provision were within the EEOC's authority, and further held that the safe-harbor provision did not apply even without regard to the new regulations. However, the court found that the wellness plan was lawful because it concluded that the employee's decision whether to participate was voluntary under that law existing prior to the regulations, which were not applicable in the case.

The court also held that there were issues of fact regarding whether Schobert was fired because of her opposition to the wellness plan, and indicated that the case would be set for trial. The consent decree approved today resolved these issues.

Under the consent decree settling the suit, Orion agreed to pay $100,000 to Schobert. The company further agreed that it won't maintain any wellness program in the future that poses disability-related inquiries or seeks a medical examination that is not voluntary within the meaning of the ADA and its regulations. Orion also agreed not to engage in any form of retaliation, including interference or threats, against any employee because he or she has raised objections or concerns as to whether the wellness program complies with the ADA. The company also agreed that it will tell its employees that any concerns about its wellness program should be sent to its human resources department.

Orion also will train its management and employees on the law against retaliation and interference under the ADA. The company will conduct an additional training meeting with its chief executive officer, its chief operating officer, its chief financial officer, its human resource director and all employees responsible for negotiating or obtaining health benefit coverage or selecting a wellness program. This training shall include an explanation of the provisions of this decree and the requirements of the ADA and its regulations as they pertain to wellness programs.

"The EEOC supports employers and employees who want to explore ways to become healthier and to lower health care costs," said Julianne Bowman, director of the EEOC's Chicago District Office. "Wellness plans must comply with the ADA and its regulations, however, as well as other laws dealing with them. Under this consent decree, Orion Energy can explore ways to help its employees and itself."

Greg Gochanour, regional attorney for the Chicago District Office, added, "The EEOC has always maintained that wellness programs, done right, are a good thing. But they have to be voluntary. Through this settlement, Orion Energy agrees that its future wellness programs will be done right."

According to company information, Orion Energy manufactures and markets energy-efficient lighting systems and retrofit lighting solutions.

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 advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at www.eeoc.gov. Stay connected with the latest EEOC news by subscribing to our email updates.