Frank C. Morris, Jr., a Member of the Firm in the Litigation and Employee Benefits practices, in the firm’s Washington, DC, office, authored an article in Law360, titled “EEOC Wellness Regs Ironically Join the Walking Dead.” (Read the full version – subscription required.)
Following is an excerpt:
The real problem posed as a result of the court’s decision in the AARP case is a new threat of private litigation challenging the “voluntariness” of employer wellness programs with 30 percent or similar incentives, especially if the incentives are in the form of penalties. Plaintiffs may try to argue that, as the court found no proper basis for 30 percent incentives being deemed “voluntary,” and with the wellness regulations being remanded, new claims may be pursued, even while the EEOC contemplates its next move. Any such claims may well be pursued as putative class actions, although individual decisions and circumstances affecting each employee’s choice would present strong arguments against the commonality and typicality of such putative class claims. In these circumstances, employers should, among other arguments, point to compliance with the tri-agency regulations and their good-faith reliance on the EEOC’s wellness regulations, which were not vacated.
It would be hoped that, even if a court were to uphold a challenge to a wellness incentive program, it would do so only on a prospective basis with injunctive relief but without damages, given employers’ good-faith and detrimental reliance on the EEOC’s wellness regulations. Employers should also consider potentially presenting the issue to Congress for a legislative resolution. Clearly, further developments should be closely monitored as 2018 and other future year plan design decisions are being considered and options and risk assessments are being made by employers and program vendors and their counsel.
