Tag: employment

Inflexible Leave Policies under the ADA since Hwang

Jackson Lewis Law firm

Since 2009, the EEOC has sued numerous employers who have terminated employeespursuant to an inflexible leave policy, a policy that provides a defined amount of leave and results in an employee’s termination once the employee exhausts that leave.  The EEOC argues that such policies are unlawful because they do not allow for additional leave to be provided as a reasonable accommodation.

And then along came Hwang.  Hwang had used all of the six months of leave under her employer’s inflexible leave policy. When her request for additional leave was denied, she sued, arguing that her employer needed to provide additional leave as a reasonable accommodation. The Tenth Circuit held that the very policy decried as blatantly unlawful by the EEOC was fair, lawful and actually protects employees with disabilities.  Hwang v. Kansas State University (10th Cir. May 29, 2014). “After all,” the court said, “reasonable accommodations … are all about enabling employees to work, not to not work.” (Emphasis added). See our Hwang post here.

What has happened since Hwang? One month after Hwang, on June 30, 2014, according to an EEOC press release, Princeton Health Care System settled an inflexible leave policy lawsuit brought by the EEOC by paying $1.35 million. The System also agreed, among other things, not to adopt an inflexible leave policy, i.e., that type of policy found lawful in Hwang.  PCHS had provided its employees up to 12 weeks of leave, the maximum amount provided by the FMLA, according to the EEOC.  The EEOC’s press release also notes that employers have paid more than $34 million to resolve lawsuits the EEOC has brought concerning leave and attendance policies.

More recently, on July 10, 2014, the EEOC sued Dialysis Clinic, Inc. for terminating a nurse who had exhausted her employer’s inflexible leave policy (four months of leave). EEOC v. Dialysis Clinic, Inc. (E.D.CA). At the time of termination, according to the EEOC press release, the employee had been “cleared by her doctor to return to work without restrictions in less than two months.”

The apparent conflict between Hwang and the EEOC’s view that inflexible leave policies are indefensible exacerbates the challenge facing employers in search of the answer to the most vexing ADA question–how much job-protected leave must an employer provide under the ADA?  More than three years have passed since the EEOC held a public hearing on leave as a reasonable accommodation under the ADA and suggested it might issue guidance on the topic. We posted previously that waiting for that guidance is like waiting for Beckett’s Godot, where those waiting come to the realization at the end of each day that he is not coming today, he might come tomorrow.  Employers continue to wait. In the words of Beckett’s Estragon, “such is life.”

Article By:

Michael J. Soltis
Of:
Jackson Lewis P.C.

 

Donning & Doffing (Wage Disputes): Old Is New Again

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Our Letter of the Law series is focused on current employment law developments, anddonning and doffing wage disputes are anything but “new” to the courts.  The U.S. Supreme Court and Congress were dealing with donning and doffing work clothing and equipment in the 1940s.  (Perhaps that is obvious given that nobody really says “donning” or “doffing” in recent years other than in this context.)

Donning and Doffing

But donning and doffing, and when employees must be paid for getting dressed for work, continues as an important and tricky wage/hour law issue.  That and the 7th Circuit U.S. Court of Appeals’ “novel approach” to judicial curiosity in Mitchell v. JCG Industries, Inc. merits inclusion as this week’s letter D.  The court in Mitchellrecently weighed in on the proper compensation for workers who are required to don and doff safety protective gear at work.  Union workers in a poultry processing plant brought the suit, alleging violations of state and federal wage laws for the employer’s failure to pay wages for time spent donning and doffing protective work gear.  Workers were required to put on jackets, aprons, gloves, hairnets, and other items at the start of every shift.  In addition, they had to remove and put back on the gear at the start and end of lunch breaks.  The principal issue was whether the employer had to compensate workers for the time spent changing in and out of gear.

Relying on Section 203(o) of the federal Fair Labor Standards Act, the court concluded that donning and doffing time is excluded from compensable time.  In its opinion, the court noted that it took very little time to dress in the gear – and indeed noted that the court staff had done so.  Additionally, the court noted that it would be overly burdensome to require employers to track such time for every employee.

Donning and doffing remains a tricky issue, a perfect example of what lawyers call “fact specific” cases.  Compare DeKeyser v. Thyssenkrupp Waupaca, Inc., 735 F.3d 568 (7th Cir. 2013) (holding that summary judgment was improper to the employer in the case involving foundry employees who were required to shower and change after their shifts).  Employers who require safety and other equipment or clothing must, decades after the law was first passed, continue to watch cases like Mitchell that might affect their decision making on what donning and doffing time must be paid.

Article By:

William A. Nolan
Of:
Barnes & Thornburg LLP

Hostile Work Environment Case Gets Additional Fourth Circuit Scrutiny

Poyner Spruill Law firm

​The Fourth Circuit Court of Appeals has agreed to an en banc rehearing (in which all judges on the court will hear the case) of Boyer-Liberto v. Fountainebleau Corp. after a three-judge panel of the court ruled in May 2014 that the factual allegations in the case did not rise to the level of a hostile work environment. The three-judge panel ruled that because a racial slur used inh the workplace was limited to two occasions arising from a single incident, the plaintiff had not been subjected to a hostile work environment based on her race.

Ms. Boyer-Liberto based her EEOC Charge of Discrimination and subsequent lawsuit against her former employer on two conversations she had with a coworker about an incident that occurred on September 14, 2010. During those conversations, which were on two consecutive days, the coworker twice directed a racial slur at Ms. Boyer-Liberto. One week after the incident, Ms. Boyer-Liberto was terminated from her job. The United States District Court for the District of Maryland granted summary judgment to the former employer, holding the offensive conduct was too isolated to support the plaintiff’s claims for discrimination and retaliation, and the three-judge panel of the Fourth Circuit affirmed that decision. Although the appeals court agreed the term used was “derogatory and highly offensive,” it held “a co-worker’s use of that term twice in a period of two days in discussions about a single incident was not, as a matter of law, so severe or pervasive as to change the terms and conditions of Liberto’s employment so as to be legally discriminatory.”

The Fourth Circuit has agreed to rehear the case, but it is not clear Ms. Boyer-Liberto will fare better on the rehearing although she argued in her petition for rehearing that the three-judge panel’s decision was inconsistent with other court rulings. That panel had specifically addressed the other cases Ms. Boyer-Liberto argued supported her claim and distinguished each as involving a greater number of incidents occurring over a longer time period or involving conduct having long-term, ongoing consequences.

As the panel noted in this case, a hostile work environment exists when “the workplace is permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.” The Fourth Circuit’s upcoming decision in this case bears watching to see if the court takes the opportunity to expand what has been a relatively narrow definition of hostile work environment. Regardless, employers should promptly investigate any claims of harassment or discrimination, document those investigations, and act quickly to address any harassment or discrimination uncovered in the investigations.

Article By:

Kevin M. Ceglowski
Of:
Poyner Spruill LLP

Supreme Court Gives Second Win in Two Days to Caregivers Challenging Compulsory Union Dues

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The United States Supreme Court acted today in another case involving a scheme to siphon millions of dollars in compulsory union dues from home caregivers assisting public aid recipients.  On June 30, 2014, the Court decided Harris v. Quinn and held that the First Amendment to the United States Constitution prohibits the collection of a compulsory agency fee from rehabilitation program personal assistants who do not want to join or support the union.  Today, the Court applied Harris to Schlaud v. Snyder, vacating the judgment, and remanding the case to the United States Court of Appeals for the Sixth Circuit for further consideration in light of Harris v. Quinn.  As the Schlaud case continues, look for another blow to the forced-dues arrangment perpretrated by various union officials and their friends in government.

Schlaud and other plaintiffs in the case are home childcare providers in Michigan who sought class-action certification in their First Amendment challenge to the state’s compulsory deduction of union dues from subsidies paid to home childcare providers.  In January 2009, the Michigan Department of Human Services (DHS) began deducting 1.15% from subsidy payments made to home childcare providers. The funds were forwarded to the union, which was a joint venture between the United Auto Workers union and the American Federation of State, County and Municipal Employees union.  According to the opinion of the United States Court of Appeals for the Sixth Circuit, the union collected $2,000,019.09 in 2009 and at least $1,821,635.21 in 2010.

Schlaud and her co-plaintiffs sought the return of the compulsory union dues that were collected in violation of their First Amendment rights. The district court denied certification of the plaintiffs’ proposed class — all home childcare providers in Michigan — because it concluded a conflict of interest existed within the class: some members voted for union representation and others voted against union representation.  The Sixth Circuit affirmed, and Schlaud sought review by the Supreme Court.

Attorneys at the National Right to Work Legal Defense Foundation filed and have litigated both Shlaud and Harris on behalf of personal assistants and home childcaregivers.  In Harris, the Supreme Court did not reach the issue of the constitutionality generally of compelling public sector employees to pay union dues or agency fees, but it strongly signaled that the legal analysis of a 1977 Supreme Court decision, Abood v. Detroit Board of Education, which found compulsory agency-fee requirements to be constitutional, was “questionable.” The Harris opinion opens the door, cracked initially in Knox v. Service Employees, for the Court to revisit the constitutionality of compelling public employees to pay union dues or agency fees as a condition of employment.

Article By:

Timothy M. McConville
Of:
Odin, Feldman & Pittleman, P.C.

 

The Walls Shouldn’t Have Ears: Ruling on Eavesdropping Puts Burden of Prevention on Illinois Employers

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Are your employees surreptitiously recording conversations? It’s a frightening thought. But based upon a new Illinois Supreme Court ruling, they are now free to do so. To discourage this behavior, Illinois employers should consider implementing a policy prohibiting such surreptitious recordings.

In People v. Clark, the Illinois Supreme Court ruled that the state eavesdropping statute, which had made it illegal to record conversations in Illinois without the consent of all parties, was unconstitutionally overbroad under the First Amendment. The state Supreme Court reasoned that audio and audiovisual recordings are “medias of expression commonly used for the preservation and dissemination of information and ideas and thus are included within the free speech and free press guarantee” of the First Amendment.

Consider for a moment how your employees might use secretly recorded conversations against you. An employee who has previously complained to your human resources department about another employee who made inappropriate sexist or racist comments, may now freely record all conversations with the colleague, and can use those recordings in a lawsuit against the company. Or, an employee might surreptitiously record everything said during an internal investigation of alleged wrongdoing by the company, and could then provide third parties with those recordings.

Given the removal of statutory barriers, Illinois employers are now forced to create their own systems for preventing this objectionable conduct. One such avenue would be to implement a policy prohibiting the recording of conversations absent the consent of all parties.

Under certain circumstances, employers may want to record workplace conversations. However, the employer, not each individual employee, should dictate when recording conversations is appropriate. Company policy should be unequivocal and forbid the recording of any conversations with colleagues or business conversations with third parties, regardless of where such conversations take place, without the consent of all parties to the conversation.

Note that such a policy would not prohibit an employee from using such surreptitious recordings in a lawsuit against the company, or from sharing such recordings with others, because Illinois law no longer requires the consent of all parties. But with clear guidelines in place, Illinois employers would at least have the option of taking disciplinary action against employees who violate the company’s policy. Employees generally don’t want to risk losing their jobs by violating such rules, and may therefore think twice before making secret recordings.

In response to the concerns of employers and others, the Illinois General Assembly is already considering new legislation that would limit the recording of conversations in a way that does not violate the Constitution. And while Illinois employers should monitor the progress of such prospective legislation, adoption of a company policy prohibiting the secret recording of conversations can help reduce the likelihood of such behavior in the interim.

Article By:

Robert K. Neiman
Of:
Much Shelist, P.C.

U.S. Supreme Court Upholds D.C. Circuit Decision in Noel Canning

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In a lengthy opinion authored by Justice Stephen Breyer, and drawing heavily on historical practice of Presidents and the Senate, the United States Supreme Court has upheld the decision of the U.S. Court of Appeals for the D.C. Circuit in Noel Canning v. NLRB, concluding that President Obama’s three recess appointments to the National Labor Relations Board in January 2012 (Sharon Block, Richard Griffin, and Terence Flynn) were invalid. The Court upheld the right of the President to make recess appointments both inter- and intra-session, but held that it is the Senate that decides when it is in session by retaining the power to conduct business pursuant to its own rules. The Court also found that a recess of less than ten days “is presumptively too short” to permit the President to make a recess appointment, except in “unusual circumstances”, such as a “national catastrophe”. (The recess here was three days.) The Court also decided that the recess appointment power applies to appointments that first come into existence during a recess and to those that initially occur before a recess but continue to exist during a recess.

As a result of the decision, over 1,000 Board decisions likely are now invalid. According to the National Right to Work Foundation, 999 unpublished decisions and 719 published decisions (totaling 1,718) could be affected. The Chamber of Commerce estimates 1,302 decisions from August 27, 2011 through July 17, 2013 to be suspect.

Article By:

Howard M. Bloom
Of:
Jackson Lewis P.C

Wisconsin’s Password Protection Law Mandates Review of Policies and Practices

Godfrey Kahn

Wisconsin has joined the ranks of other states who have limited the circumstances under which employees or applicants can be required to provide access to his or her personal Internet account. The Social Media Protection Act (2013 Wisconsin Act 208) became effective April 16, 2014. The new law makes it illegal for an employer to request or require an employee or applicant to disclose personal Internet account access information. A parallel prohibition within the Act applies to educational institutions and landlords.

A “personal Internet account” is defined as an Internet-based account that is created and used by an individual exclusively for purposes of personal communications. With the passage of the Act, employers are now prohibited from:

  • Requesting or requiring an employee or applicant, as a condition of employment, to disclose access information to the individual’s personal Internet account or to ask the individual to grant access to or allow observation of that account.
  • Discharging or otherwise discriminating against an employee for exercising his/her right to refuse to disclose personal Internet account access information.
  • Refusing to hire an applicant because the individual did not disclose personal Internet account access information.

While the law primarily protects the privacy of employees and applicants, it also offers employers a limited degree of protection. Specifically, employers can:

  • Request or require an employee to disclose access information to the employer in order for the employer to gain access to or operate an employer-provided (or employer-paid) electronic communications device provided by virtue of the employee’s employment relationship or used for the employer’s business purposes.
  • Discharge or discipline employees for transferring proprietary or confidential information or financial data to the employee’s personal Internet account without the employer’s authorization.
  • If the employer has reasonable cause, conduct an investigation or require an employee to cooperate in an investigation of any alleged unauthorized transfer of the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account or to conduct an investigation of any other alleged employment-related misconduct, violation of the law or violation of the employer’s work rules. During the investigation, the employer can require the employee to grant access to or allow observation of the employee’s personal Internet account, but may not require the employee to disclose access information for that account.
  • Restrict or prohibit an employee’s access to certain Internet sites, while using an employer-provided (or paid for) electronic communications device, or while the employee is using the employer’s network or other resources.
  • View, access or use information about an employee or applicant that can be obtained without access information or that is available in the public domain.
  • Request or require an employee to disclose his or her personal electronic mail address.

A person who has been discharged, expelled, disciplined, or otherwise discriminated against for reasons provided under this law may file a complaint with Wisconsin’s Department of Workforce Development (the “DWD”).

Employers should make sure that their employment policies and practices conform to the requirements of 2013 Wisconsin Act 208. In particular, employers should make sure that employees using employer-provided or paid for electronic communication devices for business purposes do not have any expectation of privacy in such devices or the communications that flow from them.

In addition, employees should be informed that they are prohibited from disclosing proprietary or confidential information or financial data to anyone using personal Internet accounts and only for legitimate business reasons if using an employer-provided account. Lastly, employers should make sure that their employment policies are clear in reserving the right to conduct, and in expecting employees to cooperate in, investigations concerning the unauthorized transfer of proprietary, confidential or financial information.

Article By:

Jon E. Anderson
Of:
Godfrey & Kahn S.C.

Michigan Minimum Wage Increases Enacted

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Michigan Governor Rick Snyder has signed the Workforce Opportunity Wage Act, mandating gradual increases in the state’s minimum wage to $9.25 an hour by January 1, 2018. The Act ties increases to the rate of inflation beginning 2019.

The first of four raises mandated by Senate Bill 934 (Public Act 138), to $8.15 an hour, occurs September 1, 2014. Michigan’s minimum wage since 2008 has been $7.40 an hour for workers who do not receive a tip and $2.65 an hour for workers earning tips, such as waiters.

Also beginning September 1, 2014, tipped employees would have a minimum rate that is 38 percent of the minimum for non-tipped workers, or about $3.51 an hour.

The state’s hourly minimum for non-tipped workers will increase as follows:

  • Beginning September 1, 2014, to $8.15.
  • Beginning January 1, 2016, to $8.50.
  • Beginning January 1, 2017, to $8.90.
  • Beginning January 1, 2018, to $9.25.

Starting in 2019, minimum wage increases will be tied to the rate of inflation, but any increase will be capped at 3.5 percent a year. The rate will adjust annually based on a five-year rolling average of inflation for the Midwest. Annual increases would take effect on April 1 of each year. No increase would occur if the state’s unemployment rate for the preceding year was 8.5 percent or higher.

Several other states, including Delaware and Minnesota, also have adopted increases this year, and the minimum wage for workers on new federal contracts has been raised to $10.10 per hour.

Article By:

Maurice G. Jenkins
Matthew Scott Disbrow
Of:
Jackson Lewis P.C.

Wisconsin Federal Court Recognizes Same-Sex Marriage: How Does This Affect the Administration of an Employer’s Employee Benefits?

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On Friday, June 6, 2014, Judge Crabb of the U.S. District Court for the Western District of Wisconsin issued a decision finding that Wisconsin’s constitutional amendment recognizing marriages only between men and women violates the Equal Protection Clause of the U.S. Constitution.

Unlike several other federal judges who have considered the issue, Judge Crabb did not make her ruling immediately effective. Instead the Court asked the plaintiffs’ lawyers in the case to help her fashion an injunction to implement her ruling. The plaintiffs have until June 16, 2014, to submit this proposal. The State asked for clarification on the June 6, 2014 ruling and requested that the court stay its decision until it made a final decision on the scope of the injunctive relief. On June 9, 2014, the court denied the State’s motion. In response, the State appealed Judge Crabb’s decision to the U.S. Court of Appeals for the Seventh Circuit in Chicago and requested an immediate stay of Judge Crabb’s order. The Seventh Circuit has solicited arguments from the parties to determine whether it has jurisdiction of the matter.

In response to Judge Crabb’s decision, many of the State’s counties have begun issuing marriage licenses to same-sex couples in the state. Others have declined to do so and have, instead, sought guidance from counsel or the Attorney General.

Addressing the Change

Judge Crabb’s decision, and issuance of Wisconsin same-sex marriage licenses, has injected some uncertainty into benefit plan administration in Wisconsin. Based upon the state of the prior law, it is likely that a Wisconsin employer will have more employees with domestic partners than employees with same-sex spouses through legal marriages formed elsewhere. Nevertheless, same-sex benefits are certainly an evolving issue for employers.

Family and Medical Leave

Registered and unregistered domestic partners were already covered under the Wisconsin Family and Medical Leave Act. Because an unregistered domestic partnership does not require a formal filing with a county clerk, it appears that the state law in this context is relatively unaffected.

On the other hand, the federal FMLA is substantially affected. The definition of spouse under the federal regulations requires that the marriage must be recognized by the state of residence. Most FMLA policies do not distinguish between same-sex and opposite-sex partners. Consequently, if Judge Crabb’s decision stands, requests for FMLA leave relating to same-sex spouses must be recognized under both federal and Wisconsin law if the leave is otherwise appropriate under the law.

Until the ramifications of the injunctive language are known, employers should pay particular attention to the language of their FMLA policies before making any determination about FMLA requests. Depending on how the courts ultimately rule, an employer’s FMLA policy may or may not require amendment. Regardless, if an employee asks about leave for a same-sex spouse, legal counsel should be consulted.

Benefits

The status of the law will remain uncertain until Judge Crabb makes a decision regarding whether to issue an injunction and the form such an order would take. If an injunction is issued and then stands following the anticipated appeal, employers who employ employees who have a same-sex spouse would no longer impute Wisconsin income tax for health coverage, and would otherwise recognize such spouse for all legal purposes. Because of the uncertainty in the current climate, employers should consider whether to continue imputing income for benefits provided to same-sex spouses until such time as transitional guidance is issued by the Wisconsin Department of Revenue on this issue.

Nothing has changed as it relates to unmarried domestic partners—these individuals are still subject to imputed income where the individual obtains coverage on behalf of his or her domestic partner.

Because employee benefits rules are largely governed by federal law, many same-sex marriage changes in employee benefits have been observed already since the U.S. Supreme Court’s Windsor decision of last year. If the Judge Crabb ruling stands, the most significant change for Wisconsin employers will likely pertain to Wisconsin tax treatment of family health coverage.

What should employers do in response?

  • Account for those same-sex couples who may have been married in a state that permitted same-sex marriage or who are newly married in Wisconsin following Judge Crabb’s decision;
  • Examine if modification of FMLA policy/forms is warranted based upon the changes; and
  • Examine if modification to benefit plan materials may be necessary.
Article By:

Charles P. Stevens
Kirk A. Pelikan
Of:
Michael Best & Friedrich LLP

The Affordable Care Act—Countdown to Compliance for Employers, Week 29: Wellness Programs, Smoking Cessation and e-Cigarettes

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The Health Insurance Portability and Accountability Act of 1996 (HIPAA) generally prohibits discrimination in eligibility, benefits, or premiums based on a health factor, except in the case of certain wellness programs. Final regulations issued in 2006 established rules implementing these nondiscrimination and wellness provisions. TheAffordable Care Act largely incorporates the provisions of the 2006 final regulations (with a few clarifications), and it changes the maximum reward that can be provided under a “health-contingent” wellness program from 20 percent to 30 percent. But in the case of smoking cessation programs, the maximum reward is increased to 50 percent. Comprehensive final regulations issued in June 2013 fleshed out the particulars of the new wellness program regime.

Health-contingent wellness programs require an individual to satisfy a standard related to a health factor to obtain a reward. The final rules divide health-contingent wellness programs into the following two categories: activity-only programs, and outcome-based programs. As applied to smoking cessation, an “activity-only program” might require an individual to attend a class to obtain the reward. In contrast, an outcome-based program would require an individual to quit smoking, or least take steps to do so under complex rules governing alternative standards.

Nowhere do the final regulations address the role of electronic cigarettes (or “e-cigarettes”). Simply put, the issue is whether an e-cigarette user is a smoker or a nonsmoker? (According to Wikipedia, an electronic cigarette (e-cig or e-cigarette), “is a battery-powered vaporizer which simulates tobacco smoking by producing a vapor that resembles smoke. It generally uses a heating element known as an atomizer that vaporizes a liquid solution.”) But questions relating to e-cigarettes are starting to surface in the context of wellness program administration. Specifically:

  1. Is an individual who uses e-cigarettes a “smoker” for purposes of qualifying, or not qualifying, for a wellness program reward, and
  2. May a wellness program offer e-cigarettes as an alternative standard, i.e., one that if satisfied would qualify an individual as a non-smoker?

Is an individual who uses e-cigarettes a “smoker” for purposes of qualifying, or not qualifying, for a wellness program reward?

While the final rules don’t mention or otherwise refer to e-cigarettes, they do provide ample clues to support the proposition that smoking cessation involves tobacco use. Here is the opening paragraph of the preamble:

SUMMARY: This document contains final regulations, consistent with the Affordable Care Act, regarding nondiscriminatory wellness programs in group health coverage. Specifically, these final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage. The final regulations further increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. (Emphasis added.)

There is also a discussion in the preamble about alternative standards (79 Fed Reg. p. 33,164 (middle column)), which reads in relevant part:

The Departments continue to maintain that, with respect to tobacco cessation, ‘‘overcoming an addiction sometimes requires a cycle of failure and renewed effort,’’ as stated in the preamble to the proposed regulations. For plans with an initial outcome-based standard that an individual not use tobacco, a reasonable alternative standard in Year 1 may be to try an educational seminar. (Footnotes omitted.)

In addition, the final regulations’ Economic Impact and Paperwork Burden section is replete with references to tobacco use, as are the examples (see Treas. Reg. § 54.9802-1(f)(4)(vi), examples 6 and 7).

On the other hand, the definition of what constitutes a participatory wellness program refers simply to “smoking cessation” (Treas. Reg. § 54.9802-1(f)(1)(ii)(D)), and the definition of an outcome-based wellness program (Treas. Reg. § 54.9802-1(f)(1)(v)) simply refers to “not smoking.” In neither case is there any reference to tobacco.

The Affordable Care Act’s rules governing wellness programs are included in the Act’s insurance market reforms, which take the form of amendments to the Public Health Service Act that are also incorporated by reference in the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). By virtue of being included in ERISA, participants have a private right of action to enforce these rules. So an employer that wanted to treat the use of e-cigarettes as smoking in order to deny access to a wellness reward would likely confront arguments similar to those set out above in the event of a challenge.

May a wellness program offer e-cigarettes as an alternative standard, i.e., one that if satisfied would qualify an individual as a non-smoker?

This is perhaps a more difficult question. May an employer designate e-cigarette use as an alternative standard? Anecdotal evidence suggests that employers are not doing so, at least not yet. But could they do so? And would it make a difference whether the e-cigarette in question used a nicotine-based solution as opposed to some other chemical? (According to Wikipedia, “solutions usually contain a mixture of propylene glycol, vegetable glycerin, nicotine, and flavorings, while others release a flavored vapor without nicotine.”) The answer in each case is, it’s too soon to tell.

The benefits and risks of electronic cigarette use are uncertain, with evidence going both ways. Better evidence would certainly give the regulators the basis for further rulemaking in the area. In the meantime, the final regulations’ multiple references to tobacco, and by implication, nicotine, seem to furnish as good a starting point as any. This approach would require a wellness plan sponsor to distinguish between nicotine-based and non-nicotine-based solutions, which may prove administratively burdensome.

The larger question, which may take some time to settle, is whether e-cigarettes advance or retard the cause of wellness. Absent reliable clinical evidence, regulators and wellness plan sponsors have little to guide their efforts or inform their decisions as to how to integrate e-cigarettes into responsible wellness plan designs. Complicating matters, the market for e-cigarettes is potentially large, which means that reliable (read: unbiased) clinical evidence may be hard to come by. For now, all plan sponsors can do is to answer the questions set out above in good faith and in accordance with their best understanding of the final regulations.

Article By:

Alden J. Bianchi
Of:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.