Two for 2022: Two More Wellness Incentive Lawsuits!

As predicted by our law firm, the word is getting out that workplace wellness programs are a hot target for employment-based lawsuits. In the past week, legal activity in two separate workplace wellness programs located in Illinois has ramped up. This blog will give a summary of both pending cases.

AARP v. Austin Industries

The AARP, the same organization that was behind the Yale University lawsuit, filed a charge with the EEOC on behalf of employees of Austin Industries. The charge is the first step in a litigation involving employment discrimination law violations. The EEOC will investigate the case and may decide to pursue legal action itself against Austin Industries, or it may give the AARP/employees a “right to sue” letter so that the employees, with AARP’s help, can sue their employer for discrimination under the Americans with Disabilities Act (ADA) and the Genetic Information and Nondiscrimination Act (GINA).

Austin Industries employs 800 employees in Illinois. According to its website, Austin Industries is one of the nation’s largest, most diversified construction companies. Austin has an employee wellness program for its construction workers. According to the AARP website, Austin’s wellness program “requires employees and their spouses to submit to biometric screenings and meet specified wellness standards, including achieving certain weight requirements. Employees and spouses who do not participate in the program or meet its requirements must pay heft insurance premium surcharges of $1,200 to $2,400 per year.” One of Austin’s workers stats that the $2,400 surcharge amounts to several months’ worth of utility payments or grocery bills, which is a “financial hit that is difficult to weather, particularly in a time of high inflation.” Id.

We will keep you updated as we learn more about the progress of this case.

Williams v. City of Chicago

This class action case was brought against the City of Chicago in 2020. On July 25, 2022, Judge Virginia Kendall issued an opinion in that case dismissing most of the plaintiffs’ causes of action, many on procedural grounds, but keeping the plaintiffs’ GINA discrimination claims. The plaintiffs sued their employer, the City of Chicago, for implementing what they believed was an involuntary wellness program in violation of the ADA and GINA, as well as a constitutional violation (because they worked for a government employer).

The City’s wellness program requested employees and spouses covered under the City’s health plan participate in the biometric screen and medical questionnaire. Failure to do so cost the employees $50 per month on their paycheck and another $50 per month if their spouse did not participate.

The plaintiffs’ sued their employer under the ADA, GINA and the US Constitution, alleging that the $50/month payroll deduction violated their rights under those three laws.

The court dismissed the plaintiffs’ ADA claim because the plaintiffs did not specify “disability discrimination” on the EEOC form that plaintiffs must fill out when suing under civil rights laws like the ADA. Had the plaintiffs filled out the form correctly, their ADA case would have likely survived.

The ADA claim would have likely survived because the plaintiffs’ GINA claim did survive, at least as it applied to the employees who had spouses in the City’s wellness program. Because Austin’s medical questionnaire did not include family medical history questions, the wellness program did not implicate GINA with regard to City employees. However, the employees who had spouses take the medical questionnaire did have GINA claims because asking medical questions of employee family members, including spouses, constitutes genetic information. See e.g., https://www.eeoc.gov/regulations/eeocs-final-rule-employer-wellness-programs-and-genetic-information-nondiscrimination.

According to the court, the $50 payroll deduction could be considered an “involuntary wellness program” in violation of GINA. The City argues that the wellness program is voluntary because financial incentives do not automatically render a wellness program involuntary. In support, the City pointed to the 2016 EEOC regulations that permitted wellness incentives up to 30% of the total cost of employee-only coverage. The court did not definitively decide whether $50/month as an incentive to answer a medical questionnaire makes the wellness program involuntary. That ultimate decision will be made later in the case unless the parties settle before then.

Finally, because the employees work for a government entity, the employees tried to argue that taking $50 from their paychecks per month equates to a “taking of property” without due process of law under the Fifth and Fourteenth Amendments to the U.S. Constitution. The court did not buy that argument, concluding that the $50 penalty was not a taking of earned wages, but instead an additional premium payment the employees had to pay for health insurance. The court stated that there is no protected property interest in health insurance costing only a certain amount. As a result, the court dismissed the plaintiffs’ constitutional claim.

So, the only remaining claim in the City of Chicago case is the GINA claim and whether $50/month for a spouse refusing to answer medical questions makes the wellness program involuntary. Our firm will be watching this case closely to see if the court makes that ultimate determination. In the meantime, if you are a wellness professional or company that delivers wellness services in the workplace, please reach out to our firm to make sure your program has mitigated its risk as much as possible to avoid lawsuits like the ones being faced by the City of Chicago and Austin Industries.