Why it matters: The Equal Employment Opportunity Commission’s (EEOC) efforts to challenge employer wellness programs hit a snag when a federal court judge in Minnesota denied the agency’s request for an injunction against Honeywell International. In the Commission’s third suit in three months alleging that a wellness program violated the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), the EEOC claimed that Honeywell’s biometric testing program for employees and spouses imposed a financial penalty on those that elected not to participate and was not a job-related or business necessity, asking that the court halt the program. But the judge refused to issue a temporary restraining order, in part based on the novel legal questions presented by the suit and employer uncertainty about the intersection of statutes like the ADA, GINA, and the Affordable Care Act (ACA) with employer-sponsored wellness programs. In light of the judicial admonition, will the EEOC think twice before it continues its attacks on employer wellness programs?

Detailed Discussion

In August, the EEOC filed its first lawsuit challenging an employer’s wellness program, charging that Wisconsin-based Orion Energy Systems ran afoul of the ADA. In quick succession, the agency followed with suits against another Wisconsin company, Flambeau, Inc., followed by a high-profile suit against Honeywell in October.

According to the agency’s complaint, Honeywell announced changes to the company’s High Deductible Health Plan (HDHP) at the end of the summer, informing employees that they (and their spouses if they had family coverage) would undergo biometric testing by a third-party vendor for the 2015 health benefit year if they chose to participate in the HDHP.

The biometric testing included a blood sample screened for glucose, cholesterol, and nicotine levels, as well as the collection of data on blood pressure, height, weight, and waist circumference.

Employees that elected not to participate were penalized, the EEOC told the court, losing contributions to their Health Savings Account (HSA) from Honeywell and facing various surcharges, including a $1,000 nicotine surcharge. After submitting to the testing for the 2015 program, three employees filed complaints with the EEOC.

But U.S. District Court Judge Ann D. Montgomery disagreed with the agency that a preliminary injunction was necessary to halt the testing.

The EEOC proffered two ways that irreparable harm would occur if the testing were allowed to continue: first, the agency would be unable to carry out its congressionally mandated statutory enforcement, and second, employees would lose the right to decide “without coercion” whether to participate in the program.

By continuing to investigate the lawfulness of Honeywell’s program, the EEOC can fulfill its enforcement obligations, Judge Montgomery said, and the three employees face no threat of actual injury, having already submitted to testing for the 2015 calendar year.

As for other employees who have yet to undergo testing, “the EEOC has not demonstrated that Honeywell’s biometric testing jeopardizes any employees’ right to privacy in their health information,” the court wrote. “Under these circumstances, it appears that even if the EEOC prevails on the merits, any damage alleged by Honeywell employees can be cured through the most basic of legal remedies: monetary damages.”

On the other hand, the court noted that Honeywell – and its employees by extension – could face harm if an injunction were granted. If the company were required to fund HSAs for employees who chose not to participate in the biomedical testing, as requested by the EEOC, “Honeywell argues that it will not be able to recoup those funds, should it prevail on the merits,” Judge Montgomery explained. Further, “because Honeywell’s health care costs are fixed, any anticipated revenue lost due to an injunction would be transferred to all Honeywell employees in the form of increased health care contributions.”

With both the irreparability of harm to the plaintiff and the possibility of injury to other parties weighing in Honeywell’s favor, the court declined to consider other factors.

Judge Montgomery did note that issues like the likelihood of success on the merits and the public interest considerations were likely a draw, given the “intriguing legal questions” raised by the case. Uncertainties such as the application of the ADA’s safe harbor provision to wellness plans, whether Honeywell’s biometric testing constituted a genetic test pursuant to GINA, and the intersection of the ACA’s approval of surcharges used in conjunction with wellness programs presented the court with novel questions, she said.

“[G]reat uncertainty persists in regard to how the ACA, ADA and other federal statutes such as GINA are intended to interact,” she wrote. “Recent lawsuits filed by the EEOC highlight the tension between the ACA and the ADA and signal the necessity for clarity in the law so that corporations are able to design lawful wellness programs and also to ensure that employees are aware of their rights under the law. Should this matter proceed on the merits, the court will have the opportunity to consider both parties’ arguments after the benefit of discovery in order to determine whether Honeywell’s wellness program violates the ADA and/or GINA.”

To read the order in EEOC v. Honeywell International, click here.