EEOC, Orion Reach Agreement on Wellness Program Challenge

The U.S. Equal Employment Opportunity Commission (EEOC) has resolved its suit against Orion Energy Systems challenging a wellness program under the Americans with Disabilities Act (ADA) and alleging that the employer retaliated against an employee who objected to the program by terminating her.

Under the consent decree settling the suit, Orion agreed to pay $100,000 to the employee the EEOC claimed it retaliated against. The company further agreed that it won’t maintain any wellness program in the future that poses disability-related inquiries or seeks a medical examination that is not voluntary within the meaning of the ADA and its regulations.

Orion also agreed not to engage in any form of retaliation, including interference or threats, against any employee because he or she has raised objections or concerns as to whether the wellness program complies with the ADA. The company also agreed that it will tell its employees that any concerns about its wellness program should be sent to its human resources department.

Last year, upon cross-motions for summary judgment, the district court rejected the employer’s argument that the insurance safe-harbor provision in the ADA immunizes wellness plans from ADA scrutiny. The court concluded that the EEOC’s recently issued regulations on the ADA’s safe-harbor provision were within the EEOC’s authority, and further held that the safe-harbor provision did not apply even without regard to the new regulations.

However, the court found that the wellness plan was lawful because it concluded that the employee’s decision whether to participate was voluntary under that law existing prior to the regulations, which were not applicable in the case.

The court also held that there were issues of fact regarding whether the employee was fired because of her opposition to the wellness plan, and indicated that the case would be set for trial. However, the consent decree resolved all issues.