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EEOC and Orion Energy Systems, Inc. Settle Wellness Case

On April 5, 2017 the Equal Employment Opportunity Commission (EEOC) announced that it had reached a settlement with Orion Energy Systems, Inc. (Orion) relating to the EEOC’s claims that Orion’s wellness program violated the American with Disabilities Act (ADA) because participation was involuntary, and that Orion retaliated against an employee who objected to the program. See here.

This settlement comes after the mixed ruling by the U.S. District Court for the Eastern District of Wisconsin. See Federal Court Simultaneously Rejects and Upholds EEOC’s Positions on Wellness Programs – Rejects Employer’s ADA “Safe Harbor” Defense.  Although U.S. District Judge William C. Griesbach ruled in September that the wellness program was voluntary—because the employee had a choice between participating in the program or paying full price for health benefits—the Court determined that there was a factual issue regarding whether Orion retaliated against the employee who objected to the program.

Under the terms of the settlement, Orion will pay $100,000 to the terminated employee and has agreed to refrain from implementing a wellness program that poses disability-related inquiries or seeks a medical examination that is not voluntary within the meaning of the ADA, or maintaining a program that imposes an incentive upon the worker of more than 30% of the premium cost for self-only insurance coverage. In addition, Orion has agreed not to retaliate or make threats against any employee for raising questions as to whether the wellness program is compliant, and it will train Orion executives and employees on the scope of the settlement.

The settlement is the result of lengthy negotiations and a significant exchange of information. According to Greg Cochanour, regional attorney for the Chicago District Office of the EEOC, “The EEOC has always maintained that wellness programs, done right, are a good thing.  But they have to be voluntary.  Through this settlement, Orion agrees that its future wellness programs will be done right.”

Jackson Lewis P.C. © 2020National Law Review, Volume VII, Number 111


About this Author

Heather C. Panick, Jackson Lewis, Income Tax Lawyer, compensation arrangements Attorney

Heather C. Panick is an Associate in the Omaha, Nebraska, office of Jackson Lewis P.C.

Ms. Panick has an active ERISA and federal income tax practice involving the representation of clients in tax adversary proceedings before the Internal Revenue Service, United States Tax Court and Second Circuit Court of Appeals relating to payroll, trust fund recovery penalties, employee benefit plans and executive compensation arrangements.  Her practice also includes working with clients and the Internal Revenue Service, Department of Labor and PBGC in...