Why it matters: Just one month into 2014, the Equal Employment Opportunity Commission settled its first systemic class-action suit claiming an employer violated the Genetic Information Nondiscrimination Act (GINA) by requiring applicants to undergo postoffer, preemployment medical exams that included questions about family medical history. The agency filed its first lawsuit alleging violations of GINA last year, which resulted in a settlement for $50,000 and injunctive relief. Employers should consider a review of the statute to avoid running afoul of its requirements, particularly as the EEOC included enforcement of GINA as one of the six priority items on its Strategic Enforcement Plan.

Detailed Discussion

Founders Pavilion, Inc., a nursing and rehabilitation center located in Corning, N.Y., requested that after accepting an offer of employment applicants undergo a medical exam. As part of the exam, applicants were asked to complete an “Occupational & Environmental Health Services Patient History Form,” which included questions about family medical history.

Over an almost two-year period, Founders also requested the information as part of return-to-work and annual staff medical exams as well, engaging “in a pattern or practice of employment practices made unlawful by GINA,” according to the EEOC’s complaint.

In addition, the agency alleged that Founders violated both the Americans with Disabilities Act as well as Title VII. Founders refused to hire, or fired, three women because they were pregnant, the EEOC said, and terminated two employees the company perceived to be disabled.

To settle the charges, Founders agreed to pay a total of $370,000 – $110,400 to the 138 individuals who were asked over an almost two-year period about their genetic history ($800 each) and $259,600 to the five people impacted by the ADA and Title VII violations.

Founders was purchased after the EEOC’s complaint was filed last May and ceased business operations. However, the consent decree mandates that if the facility resumes operations, it must post notices and provide information about the agency’s lawsuit and the settlement to employees. A new antidiscrimination policy must be adopted – featuring specific references to genetic information, disability, and pregnancy discrimination – and distributed to all employees, who are also required to receive antidiscrimination training.

The agreement will remain in effect for five years, during which time Founders said it would provide periodic reports to the EEOC about any internal discrimination complaints.

To read the complaint in EEOC v. Founders Pavilion, click here.

To read the consent decree, click here.