The new National Labor Relations Board (“NLRB” or “Board”) reversed another Obama Board decision on Friday. In Raytheon Company, 365 NLRB No. 161 (December 15, 2017), the Board returned to long standing precedent that the question of whether an employer has made a “change” should take into consideration the employer’s standing practices. The Obama Board had rejected that interpretation in E.I. du Pont de Nemours, Louisville Works, 355 NLRB 1084 (2010), when it held that because a practice was not set forth in the parties’ collective bargaining agreement, the employer could not continue to exercise the practice after expiration of the agreement. The new NLRB disagreed, finding the DuPont decision inconsistent with the long-standing “commonsense” definition of what is actually a “change” in employees’ terms and conditions of employment. Accordingly, Raytheon was free to make its usual adjustments to health benefits as it had in prior plan years. It was not required to provide the union with notice and an opportunity to bargain the practice simply because the agreement expired.
The EEOC has issued proposed regulations addressing the legality of inducements for spousal participation in wellness programs under the Genetic Information Nondiscrimination Act (GINA). The original GINA regulations prohibited employers from offering inducements to an employee for providing genetic information, including genetic information about employees’ spouses. The EEOC has now declared that employers may offer limited inducements (financial or in-kind), whether in the former of incentives or penalties to be avoided, to spouses covered by an employer’s group health plan who receive health or genetic services offered by the employer to provide information about their current or past health status as part of a health risk assessment. Inducements are still illegal as to spouses’ other genetic information or genetic tests, as well as the genetic information or tests of an employee’s children. The total inducement provided to a spouse may not exceed the total cost of coverage for the plan in which the employee and any dependents are enrolled minus 30 percent of the total cost of self-only coverage.
The EEOC is accepting comments on the proposed regulations until December 29, 2015. If you have a wellness plan and have not reviewed its provisions recently, now is a good time to evaluate whether the plan complies with the proposed regulations under both the ADA and GINA.
This morning, the U.S. Supreme Court struck down state laws the prohibit gay marriage in Obergfell v. Hodges, No. 14-556 (June 26, 2015), First, the Court held that the Fourteenth Amendment requires a State to license a marriage between two people of the same sex. Second, the Court held that the Fourteenth Amendment requires a State to recognize a same sex marriage licensed and performed in another State that does recognize that right.
The Court noted the many areas of life in the U.S. affected by marital status, such as taxation, hospital access, medical decision making authority, adoption rights and much more. But this is a labor and employment blog, so we focus on the effect on employers. First, as the Court recognized, the case will affect workers’ compensation laws in states that provide spousal benefits to spouses of workers’ compensation claimants, but do not recognize gay marriage. Second, the case may significantly affect employers in states that have mini-FMLA statutes with respect to leave to act as a caregiver for a spouse, but that do not recognize same sex marriage. Third, the case may affect employee health and life benefits with respect to spousal coverage depending on applicable state laws and the nature and language of each particular plan. Fourth, the case may affect spousal pension benefits to the extent that pension plans excluded same sex marriage from the definition of spouse. Employers should promptly revisit these affected areas and revise applicable policies, practices, and benefits accordingly.
By Just John
The EEOC has broadcast proposed regulations on wellness programs. For all the details, visit https://www.federalregister.gov/articles/2015/04/20/2015-08827/regulations-under-the-americans-with-disabilities-act-amendments. In short, the proposed regs attempt to reconcile (a) Obamacare provisions encouraging wellness programs, (b) the ADA’s approval of medical examinations that are truly voluntary, and (c) the EEOC’s ongoing crusade against wellness programs. Much of the EEOC’s attempt to square this triangle of contradictions boils down to determining when wellness programs that require medical examinations are really, truly voluntary. Part of the regs will require new communications from our employer-sponsored welfare plans; in language “employees are reasonably likely to understand,” the plans have to describe medical information to be obtained as part of the wellness plan, the purposes for its use, the restrictions on disclosure of the employee’s medical information, the entities with whom it will be shared, and the methods used to protect the information. The EEOC is accepting (and rejecting) commentary on the proposed regulations through mid-June before moving forward to convert them into final rules. The EEOC also approved a 30% incentive/penalty framework for incentivizing participation in wellness programs.
In a highly controversial, but very specific ruling, the Supreme Court today struck down Obama administration regulations requiring for-profit corporations to provide insurance coverage for certain forms of contraception. The case arises out of the tension between the Affordable Care Act’s contraception mandate, on the one hand, and the Religious Freedom Restoration Act’s broad protection of free religious exercise on the other hand. Three closely-held corporations sued challenging the administration’s ACA regulations requiring for-profit corporations to provide employee insurance coverage for contraception. The companies argued that the regulations forced them to violate their religious beliefs by forcing them to make it easier for their employees to obtain contraceptives. The Court agreed, finding that forcing the companies to choose between their religious beliefs against abortion versus facing the substantial ACA penalties for failing to provide contraception coverage unduly burdened the companies’ free exercise of religion.
This decision is extremely limited on its facts. The Court held that the Health and Human Services Regulations exemption from ACA’s contraception mandate for closely-held non-profit corporations could not be squared with HHS’s opposite treatment of closely-held for-profit corporations. The decision is noteworthy in several respects: (1) the decision arises under the extremely broad provisions of the Religious Freedom Restoration Act rather than the Constitution, meaning Congress can respond however it sees fit; (2) the decision involves only closely-held for-profit companies, and not publicly-traded companies; and, (3) the decision involves only four of the twenty forms of HHS-approved contraceptives, those that terminate pregnancy post-conception. Justice Bader-Ginsburg’s blistering dissent portends much broader implications for creative employers who seek to take advantage of the decision, but Justice Alito’s 5-4 majority decision maintains that the parade of horribles is unlikely and implausible. Burwell v. Hobby Lobby Stores, Inc., No. 13-354 (U.S. June 30, 2014).
By Bill Wright
A worker is injured – seriously injured – and goes out on long term leave. He files a workers compensation claim. The comp. claim stalls and, for 11 years, the employer pays insurance benefits for the worker with no end in sight. Finally, the employer notifies the worker that, if he is unable to return to work, the company will separate his employment. The result? A lawsuit, of course. Brooks v. Pactive Corp., No. 12-1155 (7th Cir. September 6, 2013).
After dismissal in the trial court, the court of appeals resurrected the worker’s claim for workers comp. retaliation. Although it had been 11 years since the worker filed a claim for compensation, negotiations on a settlement had stalled more recently and his medical costs recently soared. The court ruled that it was possible, even plausible given the allegations, that the company had decided to let the worker go at that time because of the workers comp. claim and not because he was unable to perform his job.
Even a decade of patiently providing a worker with insurance benefits is no protection from litigation. We can hope the employer wins on the merits, but it’ll have to face the legal fees.
By Matt Morrison
On Friday, the U.S. Department of Labor issued an internal memo to its employees clarifying its stance on the application of FMLA to same sex couples. Eligible employees may take time off from work under the Family and Medical Leave Act (“FMLA”) when caring for a spouse of the same sex, provided the couple is legally married and lives in a state that recognizes same-sex marriage. This new guidance follows the Supreme Court’s decision striking down the portion of the Defense of Marriage Act (DOMA) that had denied federal benefits to same-sex couples. However, because FMLA regulations already defined “spouse” according to the marriage laws of the state where an employee resides, the DOL’s update is a minimal reaction to the Court’s ruling. FMLA coverage for same-sex couples still only applies to legally married same-sex couples living in the 13 states (and the District of Columbia) that recognize same-sex marriage. Employees in same-sex domestic partnerships, same-sex civil unions, or legally married same-sex couples who move to a state that does not recognize same-sex marriage are still left out.
If you are in a same sex marriage, take care to live in a state that respects the union. Moving can result in the elimination of your FMLA coverage.
By Ted Olsen
Hospitals that agree to provide services to the members of a health plan/HMO (“Plan”) also become government contractors, when the Plan covers federal government employees. Technically, the hospitals become “subcontractors,” but that does not help. If the service agreement has a high enough value, the hospitals are subject to various affirmative action laws and subject to compliance evaluations, on-site reviews and enforcement proceedings by the Office of Federal Contract Compliance Programs (“OFCCP”). Braddock v. Harris, Civil Action No. 09-1210 (PLF) (D.D.C. Mar. 30, 2013).
In this case, hospitals challenged the OFCCP’s efforts to exert its authority over them. The hospitals relied on a 2003 OFCCP Policy Directive that stated health care providers providing services to Federal Employees Health Benefits Program participants were “not covered under OFCCP’s programs based solely on that relationship.” That’s still true, if the benefits program is just insurance. If the benefits program is an HMO, then the health care provider is providing the service the HMO contracted to provide and the health care provider is, therefore, a government subcontractor, subject to affirmative action requirements and the OFCCP’s various enforcement programs.
This is the latest installment in a continuing legal saga, beginning in administrative proceedings and continuing now in the courts. Health care might become even more expensive for government employees. The case highlights for all of us how easily a company might turn out to be a government contractor. You might not know you are a government contractor until the OFCCP comes to call.