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Equal Employment Opportunity Commission v. Orion Energy Systems, Inc.

United States District Court, E.D. Wisconsin

September 19, 2016



          William C. Griesbach, Chief Judge.

         The Americans with Disabilities Act (ADA), 42 U.S.C. § 12112(d)(4)(A), generally prohibits employers from requiring employees to undergo medical examinations and disability-related inquiries. Plaintiff Equal Employment Opportunity Commission (EEOC) brought this action against Defendant Orion Energy Systems, Inc. (Orion) alleging Orion violated the ADA by requiring employees who elect to enroll in Orion's self-insured health insurance plan to either complete a health risk assessment (HRA) or pay 100 percent of their monthly premium amount. The EEOC also alleges that Orion violated the ADA's anti-retaliation provisions, 42 U.S.C. § 12203(a) and (b), by instructing former employee Wendy Schobert not to discuss her concerns about the legality of this requirement with co-workers and by terminating Schobert's employment shortly after she voiced opposition to and opted out of Orion's new employee wellness program. Federal jurisdiction exists pursuant to 28 U.S.C. § 1331.

         The case is before the Court on the parties' cross motions for summary judgment. The EEOC argues that it is entitled to summary judgment on liability because Orion's policy violates the ADA as a matter of law. The EEOC also argues that the undisputed evidence shows that Orion terminated Schobert in retaliation for her criticism of Orion's illegal policy and her refusal to complete a HRA. Orion, on the other hand, contends its requirement that employees who elect to receive health insurance from Orion either participate in the wellness program or pay the full premium amount was lawful under the ADA's insurance “safe harbor” provision. The safe harbor provision states in relevant part that the ADA “shall not be construed to prohibit or restrict” a self-insured organization “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan.” 42 U.S.C. § 12201(c)(3). Alternatively, Orion asserts that its wellness program is voluntary under 42 U.S.C. § 12112(d)(4)(B). Orion also argues the EEOC's retaliation claims fail as a matter of law given the fact that the wellness program Schobert was allegedly fired for opposing was not unlawful. For the reasons below, I find that the safe harbor does not apply but I agree with Orion that the wellness program is voluntary. However, I conclude that a factual dispute remains as to whether Orion retaliated against Schobert for exercising rights protected by the ADA, or interfered with Schobert's exercise or enjoyment of rights granted by the ADA. Accordingly, Orion's motion will be granted-in-part and denied-in-part, the EEOC's motion will be denied, and the case will be scheduled for trial.


         In 2008, Orion, a company that manufactures and sells energy-saving lighting solutions to commercial and industrial customers and employs some 250 people, decided to switch from a fully insured health plan to a self-insured health plan. Believing that a self-insured company can reduce or at least slow the increase of its health care costs by improving the health of its employees, Orion also began exploring employee wellness programs with the assistance of a health insurance consulting company called Diversified Insurance Services.

         Orion ultimately decided in the spring of 2009 on a wellness initiative including three components. Orion calls these components financial “incentives” while the EEOC calls them “penalties.” In any event, employees who elected to enroll in Orion's plan would have to certify that they did not smoke or pay a surcharge ($80 per month for single coverage); they would have to exercise sixteen times per month on a range of motion machine located in Orion's fitness center or pay a surcharge ($50 per month); and, most importantly for purposes of this case, they would have to either complete a health risk assessment (HRA) at the beginning of the insurance year or pay the entire monthly premium equivalent amount, which was $413.43 for single coverage, $744.16 for limited family coverage, and $1, 130.83 for family coverage. Employees who completed the HRA paid no premium equivalent, but still had to pay their own deductibles, co-pays and out-of-pocket expenses.

         The HRA consists of a health history questionnaire and biometric screen involving a blood pressure check, height, weight, and body circumference measurement, and blood draw and analysis. Orion characterizes the HRA as a “mini-physical.” Orion did not receive any personally identified information as a result of the HRA. Instead, the questionnaire and blood samples were collected by one vendor (Holy Family Memorial) and sent directly to another vendor (Clinical Reference Lab) with scores then compiled and aggregated by another vendor (Healics). Orion then obtained the information but only in an anonymous format. The anonymous, aggregated data allowed Orion to see the percentage of participants in its plan who had particular health risks such as high cholesterol. The form completed by participants in the HRA stated that these vendors would be the only entities with access to the individual medical results, and that these vendors considered employees' medical information Protected Health Information subject to the medical privacy provisions of the Health Insurance Portability and Accountability Act (HIPPA).

         Orion claims the purpose of the aggregated data it received from the HRAs was to identify common health issues and offer employees educational tools or assistance to improve their health. Participants also receive their individual results from the HRAs, thereby giving them the opportunity to discuss any issues with their physician. The program was intended, according to Orion, to improve the collective health and productivity of its workforce and also to reduce Orion's health care spending.

         Wendy Schobert was an employee in Orion's accounting department from 2003 until May 18, 2009 when her employment was terminated. Before ultimately opting out of the HRA in April 2009, Schobert raised questions about the new wellness initiative, including the HRA. Schobert questioned whether medical information collected in the HRA would remain confidential. Schobert also questioned how the premium amount was calculated, and believed it was excessive in light of the service fee Orion was paying its third-party administrator, Auxiant. Schobert only knew the amount of that fee, Orion contends, because her job duties involved paying Auxiant's invoices.

         Due to privacy concerns about the manner in which Orion was conducting the HRAs, Schobert sent a letter to Orion's human resources director, Kari Tylke, stating that she elected not to participate in the HRA. About two weeks later, on April 15, 2009, Schobert was offered the opportunity to undergo the HRA at Holy Family Memorial's facility (instead of on Orion's premises where the initial HRA was scheduled), but Schobert declined. On April 24, 2009, Schobert signed an Opt-Out form, indicating, “I have voluntarily made the choice to not participate in the HRA program, and as a result, I understand and agree that I will be responsible to pay Orion for the applicable monthly premium cost during the period from April 1, 2009 through February 28, 2010.” For Schobert, the applicable monthly premium cost was $413.42, if she elected Orion's health insurance plan. Schobert was the only Orion employee who opted out of the HRA in the spring of 2009.

         Orion states that sometime around April 2009, Schobert was “talked to” by her supervisor, Caryn Boegel, and Tylke, the HR director. The conversation concerned comments Schobert had made to co-workers regarding the amount of the premium being charged by Orion in light of the administrative service charge paid to Auxiant. Schobert claims she was told during this meeting to keep her opinions about the new wellness program to herself. Tylke testified in deposition that Boegel had raised concerns that Schobert's “negativity” would bring down morale in Boegel's group of employees, and that Schobert was told in this meeting that such negativity was not welcome in the workplace, and that if Schobert had concerns, she needed to speak with a supervisor, Tylke, or someone else in management. (Dep. Tr. 45, ECF No. 36-5.)

         On May 7, 2009, Schobert sent an e-mail challenging and criticizing then Orion chief executive officer Neal Verfuerth's request for information on how much time employees were using to get water and coffee in light of what Schobert believed were Orion's extravagant spending decisions on a variety of projects. Orion contends that a few days after this email was sent, Verfuerth instructed Scott Jensen, Orion's chief financial officer, to terminate Schobert's employment. Jensen testified in deposition that Verfuerth told him to fire Schobert because Verfuerth “expected his accounts payable person to process invoices and cut checks” not to “question how the company chooses to spend money.” (Tr. 18:6-9, ECF No. 36-2.) Jensen then informed Boegel to implement the termination, which was discussed with Tylke about a week before it occurred. Schobert's employment was terminated in a meeting on May 18, 2009 with Mike Potts, the executive vice president, as well as Boegel and Tylke.


         Summary judgment must be granted where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). When the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is not a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).


         Title I of the ADA is aimed at eliminating disability-based discrimination in the workplace. 42 U.S.C. §§ 12101(b)(1), 12112(a). Section 12112(a) states the general rule, “No covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.” The prohibition extends also to employer-required “medical examinations and inquiries.” 42 U.S.C. § 12112(d)(1). “The obvious purpose of subsection (d) is to limit the gathering and use of medical information as one of the ways to reduce the possibility of discrimination.” Heston v. Underwriters Labs., Inc., 297 F.Supp.2d 840, 845 (M.D. N.C. 2003).

         Section 12112(d)(4)(A), which the EEOC claims Orion violated, states that a covered entity “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.” Section 12112(d)(4)(B), however, permits employers to conduct “voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site.” The EEOC argues the HRA was not ...

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