On November 6, 2014, in EEOC v. Honeywell International, Inc. Case No. 14-CV-4517, 2014 U.S. Dist. LEXIS 157945, (D. Minn. Nov. 6, 2014), Judge Ann Montgomery of the U.S. District Court for the District of Minnesota denied the Equal Employment Opportunity Commission’s (“EEOC”) request for a preliminary injunction enjoining Honeywell International Inc. (“Honeywell”) from levying penalties against employees who refused to undergo biomedical testifying in conjunction with Honeywell’s corporate wellness program.  The Court held that, amongst other things, no irreparable harm would result from the refusal to issue an injunction.

The EEOC made much of this case filing in the press, and the Court’s rejection of the EEOC’s request for a preliminary injunction is a significant set-back for the Commission.

Case Background

Honeywell employees and their families had the option of participating in the Corporation’s wellness program, which was designed to inform participants about their health status, encourage improvements of specific health goals and to ultimately reduce claim costs.  Employees who participated in the program had to undergo biometric testing. Employees who declined participation were not disciplined or terminated, but were subject to financial surcharges.

The biomedical testing, administered as part of the program, required a blood sample the screened for various data points. Employees completed the testing for free through Quest Diagnostics (“Quest”), or, in the alternative, employees could have their personal physician fill out a form providing the same health information. Quest would relay the collected data to an independent health management company. Honeywell would receive the aggregate data, but was not informed of the individual employee results.

Employees who participated in the program, and who earned less than $100,000 a year, were eligible to participate in the company’s Health Savings Account (“HSA”). Honeywell would then make an annual contribution to the HSA, ranging from $250 to $1500. Employees who choose not to participate in the wellness program did not qualify for the company-sponsored HSA and had to also pay a $500 surcharge that went towards their annual health insurance contribution.  Honeywell employees and their spouses could also be subject to a $1000 nicotine surcharge. Those how refused to undergo the biomedical testing were presumed to be tobacco users. However, this presumption could be rebutted by enrolling in a tobacco cessation program (actual cessation not required), submitting a report from their physician, or working with a health advocate to establish that they are nicotine free.

Three employees filed complaints with the EEOC alleging that the program violated the Americans With Disabilities Act (“ADA”) and the Genetic Information Non-discrimination Act (“GINA”). All three employees had already submitted to biometric testing. Subsequently, the EEOC sued Honeywell over the wellness program, and moved for immediate injunctive relief.

The Decision Of The District Court

The Court applied the traditional factors reviewed in determining whether to issue a preliminary injunction, including: (1) threat of irreparable harm to the movant, (2) the balance between the harm alleged and the harm that the relief may cause the non-moving party, (3) the likelihood of success on the merits, and (4) the public interest. Based on these factors, the Court denied the EEOC’s motion.

The Court held that the EEOC could not establish the threat of irreparable harm. The Honeywell employees did not face an actual threat of injury because all three had already submitted to biometric testing for the 2015 calendar year.  Further, the EEOC had failed to demonstrate that the biometric testing jeopardized any employees’ right to privacy in their health information. And, even if the EEOC were to go on to prevail on the merits, “the only harm suffered by Honeywell employees is monetary,” which could be cured “through the most basic legal remedies: monetary damages.” Id. at *6.

The Court also found that the balance of harms favored Honeywell. If an injunction, freezing all surcharges was ordered, Honeywell employees who opted-out of the biometric testing may ultimately need to pay a surcharge if Honeywell prevailed on the merits. In contrast, if the EEOC were to prevail on the merits, Honeywell employees who were initially wrongfully assessed a surcharge based on their decision to forego the testing could easily be made whole by a refund.

Finally, the Court reviewed the EEOC’s likelihood of success and the public interest in issuing a preliminary injunction. Amongst other things, the EEOC argued that Honeywell violated the ADA because the biomedical testing constituted an involuntary medical exam that was not job-related, and that Honeywell violated GINA because it collected medical information about family members. Honeywell countered that its wellness program was covered under the ADA’s safe harbor provisions, and that its testing was not considered a “genetic test” under GINA. The Court ruled that there was uncertainty surrounding the interaction of the ADA, GINA, and the Affordable Care Act.  The Court reasoned that this uncertainty surrounding the legal questions presented in the case prevented it from being able to determine whether one party was more likely to succeed on the merits.

Implications For Employers

The ruling was a slap-down of the EEOC. What it claimed was clear and illegal was nothing of the sort based on the Court’s decision.

Employers will have to wait and see how the Court rules once it is able to review the merits of the unique issues presented in this case. In the interim, we are reminded that a Court will not issue a preliminary injunction when employees are not at risk for immediate injury and when monetary damages can easily cure any damages incurred by them. Employers should pay attention to this case as it will likely influence the fate of corporate wellness programs across the country.