Equal Employment Opportunity Commission v. Honeywell International Inc.
Filing
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MEMORANDUM OPINION AND ORDER denying 2 Plaintiff's Motion for Preliminary Injunction (Written Opinion). Signed by Judge Ann D. Montgomery on 11/06/2014. (TLU)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Equal Employment
Opportunity Commission,
Plaintiff,
v.
MEMORANDUM OPINION
AND ORDER
Civil No. 14-4517 ADM/TNL
Honeywell International, Inc.,
Defendant.
______________________________________________________________________________
Laurie Vasichek, Esq., Equal Employment Opportunity Commission, Minneapolis, MN, on
behalf of Plaintiff.
Michael Burkhardt, Esq., Morgan Lewis & Bockius LLP, Philadelphia, PA, on behalf of
Defendant.
______________________________________________________________________________
I. INTRODUCTION
On November 3, 2014, the undersigned United States District Judge heard oral argument
on the Equal Employment Opportunity Commission’s (“EEOC”) Motion for a Preliminary
Injunction [Docket No. 2] against Honeywell International, Inc. (“Honeywell”). As articulated
at the hearing, and for the reasons discussed below, the EEOC’s motion is denied.
II. BACKGROUND
The EEOC seeks to immediately enjoin Honeywell from levying all penalties and
costs—including withholding Health Savings Account (“HSA”) contributions—against any
Honeywell employee who refuses to undergo biomedical testing in conjunction with
Honeywell’s corporate wellness program. The EEOC does not allege that Honeywell’s wellness
program violates employees’ right to privacy in their medical information, nor does the EEOC
request that the Court order Honeywell to cease the biometric testing associated with its wellness
program.
A. Honeywell’s Corporate Wellness Program
Honeywell employees and their families have the option of participating in Honeywell’s
High Deductible Health Plan (“HDHP”), a self-insured group plan sponsored by Honeywell.
Gregg Decl. [Docket No. 21] ¶ 3. HDHP enrollees can choose to participate in Honeywell’s
wellness program, which is designed to inform participants about their health status, encourage
improvement of specific health goals and ultimately reduce claim costs. Id. ¶ 8. Employees who
participate in the wellness program agree to undergo biometric testing. Id. ¶ 10. Employees
who choose not to participate in the wellness program are not disciplined or terminated, but they
are subject to financial surcharges. Id. ¶ 9 and ¶¶ 19-20.
Honeywell works with an independent third-party actuarial firm to perform underwriting
analysis of its health plan each year. Id. ¶ 44. Analysis of past claims informs the future design
and pricing of Honeywell’s health plan, including its wellness program. Id.
1. Biomedical Testing
The biomedical testing administered as part of Honeywell’s wellness program requires a
blood sample that is screened for the following data: blood pressure; height; weight; waist
circumference; and cholesterol, glucose and nicotine levels. Id. ¶ 11. Employees and their
spouses can complete the biomedical testing for free through Quest Diagnostics (“Quest”) or, in
the alternative, employees can have their personal physician fill out a form indicating the basic
health data identified above. Id. ¶ 14. Quest relays the collected data to an independent health
management company; Honeywell receives aggregate data but is not informed of individual
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employee test results. Id. ¶ 16.1
2. Incentives and Surcharges
Employees who participate in the wellness program become eligible for a HSA. Id. ¶ 19.
This incentive is available only for employees whose annual salary is below $100,000. Id.
Honeywell’s annual contribution to the HSAs of qualified employees ranges from $250 to
$1,500. Id. ¶ 9. Employees who choose not to participate in the wellness program do not qualify
for a company-sponsored HSA and must also pay a $500 surcharge that goes toward their annual
health insurance contribution. Id. This amounts to a pre-tax monthly deduction of $41.67. Id. ¶
20. This surcharge is not levied against employees whose spouses refuse to undergo the
biomedical testing. Id.
Honeywell employees and their spouses who are covered by Honeywell’s HDHP plan
may also be subject to a $1000 nicotine surcharge. Id. ¶ 24. Employees (and spouses) who
refuse to undergo biomedical testing are presumed to be tobacco users. However, individuals
covered by the HDHP plan can avoid the tobacco surcharge without taking the biometric test in
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As indicated by materials promoting the wellness program:
By participating in the biometric screening, you authorize the results
to be securely sent from Quest Diagnostics Blueprint for Wellness to
CareAllies and their partner, the University of Michigan Health
Management Research Center, who developed the Health Assessment.
Both entities have extensive experience handling employee health care
data. Your health information is protected by Federal Health
Information Privacy laws. The data you disclose in the Health
Assessment and the results of your biometric screening are
confidential. Honeywell gets aggregate, summary information, but
does not have access to the individual health data.
Vasichek Decl. [Docket No. 5] Ex. B.
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three ways: (1) enroll and participate in a tobacco cessation program (actual cessation is not
required); (2) submit a biomedical screening report from their physician that shows they do not
use tobacco; or (3) work with a Health Advocate to establish that they are nicotine free. Id. ¶¶
30-31.
B. Complaints filed by Honeywell Employees with the EEOC
Three Honeywell employees recently filed complaints with the EEOC alleging that
Honeywell’s 2015 wellness program violates the Americans with Disabilities Act (ADA) and the
Genetic Information Nondiscrimination Act (GINA). Def.’s Mem. Opp’n Prelim. Inj. [Docket
No. 20] at 13; see also Schwartz Charge of Discrimination [Docket No. 8]; Hall Charge of
Discrimination [Docket No. 9]. All three employees have already submitted to biometric testing
for Honeywell’s 2015 wellness program, and all three also participated in the biometric testing in
2014.2 Two of the three employees have no spouse covered by Honeywell’s insurance program;
the third employee’s spouse has already submitted to biometric screening for 2015. Gregg Decl.
¶¶ 32-33.
III. DISCUSSION
A. Preliminary Injunction Standard
A preliminary injunction is an extraordinary remedy, and the movant bears the burden of
establishing its propriety. Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003). The court
considers four factors in determining whether a preliminary injunction should issue: (1) the
threat of irreparable harm to the movant in the absence of relief, (2) the balance between the
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In 2014, Honeywell did not charge the $500 biomedical surcharge or test for nicotine,
but HSA contributions where offered to those who participated. Gregg Decl. ¶ 22.
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harm alleged and the harm that the relief may cause the non-moving party, (3) the likelihood of
the movant’s ultimate success on the merits, and (4) the public interest. Dataphase Sys., Inc. v.
C.L. Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc). No single factor is determinative.
Id. at 113. Instead, the court considers the particular circumstances of each case, with the focus
on the primary question of whether the “balance of equities so favors the movant that justice
requires the court to intervene to preserve the status quo until the merits are determined.” Id.
1. Threat of Irreparable Harm
The EEOC argues that irreparable harm will result in two ways absent a preliminary
injunction. First, the EEOC contends that it will be irreparably harmed because the agency “will
not be able to carry out the purposes [of enforcement statutes] as intended by Congress.” Pl.’s
Mem. Supp. Prelim. Inj. [Docket No. 4] at 23. Further, the EEOC argues that Honeywell
employees will suffer irreparable harm because they will “lose the right to decide without
coercion whether to participate in Honeywell’s biometric testing.” Id. at 24. In contrast,
Honeywell contends that the EEOC can continue with its investigation of Honeywell’s program,
thereby not suffering any harm, and that—should the EEOC later prevail on the merits—the only
harm suffered by Honeywell employees is monetary, for which an adequate legal remedy of
damages is available.
Irreparable harm is a threshold requirement for preliminary injunctive relief. Gelco
Corp. v. Coniston Partners, 811 F.2d 414, 418 (8th Cir. 1987). Threat of irreparable harm
requires more than a possibility of remote future injury, it requires a presently existing actual
threat of injury. Rogers v. Scurr, 676 F.2d 1211, 1214 (8th Cir. 1982). “Wholly speculative”
harm will not justify injunctive relief. Local Union No. 884, United Rubber Workers, Cork,
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Linoleum & Plastic Workers v. Bridgestone / Firestone, 61 F.3d 1347, 1355 (8th Cir. 1995).
“Irreparable harm occurs when a party has no adequate remedy at law, typically because its
injuries cannot be fully compensated through an award of damages.” Rogers Grp, Inc. v. City of
Fayetteville, Ark., 629 F.3d 784, 789 (8th Cir. 2010) (quotations omitted).
In this case, the EEOC cannot establish the threat of irreparable harm. First, as argued by
Honeywell at the hearing, the EEOC can fulfill its enforcement obligations by continuing its
investigation into the lawfulness of Honeywell’s wellness program. Second, none of the
Honeywell employees who have filed a complaint with the EEOC face an actual threat of injury
because all three have already submitted to biometric testing for the 2015 calendar year. Gregg
Decl. ¶¶ 32-33. Finally, even if the EEOC had authority to seek injunctive relief on behalf of
Honeywell employees who have expressed concerns about the surcharges telephonically (but not
yet filed a formal complaint), the EEOC has failed to demonstrate that such employees will face
irreparable harm.3 Specifically, the EEOC has not demonstrated that Honeywell’s biometric
testing jeopardizes any employees’ right to privacy in their health information. Neither the
EEOC nor the complaining employees allege that Honeywell’s wellness program fails to comply
with Federal Health Information Privacy laws. Under these circumstances, it appears that even if
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“When EEOC sues in its own name, it may litigate only those claims which have been
subjected to the complete administrative processing required by Title VII.” EEOC v. United
States Steel Corp., Case No. 90-3041, 2013 U.S. Dist. LEXIS 22748 (W.D. Pa. Feb. 20, 2013)
(quoting EEOC v. E. Hills Ford Sales, Inc., 445 F. Supp. 985, 987 (W.D. Pa. 1978)). Title VII
requires the EEOC to: (1) receive a charge from an individual and notify the employer of the
charge, (2) investigate that charge and related charges, (3) determine that "reasonable cause"
exists to believe that discrimination occurred, and (4) attempt conciliation of all charges against
the employer. See 42 U.S.C. § 2000e-5(b).
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the EEOC prevails on the merits, any damage alleged by Honeywell employees can be cured
through the most basic of legal remedies: monetary damages.
2. Balance of Harms
The next Dataphase factor is the balance between the irreparable harm to the movant, if
any, and the injury granting an injunction will cause to the other interested parties. Dataphase,
640 F.3d at 113. The EEOC argues that Honeywell will not be harmed because the relief sought
only seeks to ban surcharges, not the biomedical testing itself. Honeywell contends that its
employees will be harmed because, if an injunction is imposed that freezes the levying of
surcharges, employees will not be able to make an informed economic choice about whether they
should participate in the biomedical testing. At the hearing, Honeywell argued that if an
injunction was granted but Honeywell later prevailed on the merits, employees who did not
submit to the biomedical testing during open season would not be eligible to participate in the
wellness program until the next open season. These employees may face a lump-sum surcharge.
In addition, if Honeywell is required to fund HSAs for employees who do not participate in the
biomedical testing, Honeywell argues that it will not be able to recoup those funds, should it
prevail on the merits. Finally, because Honeywell’s health care costs are fixed, any anticipated
revenue lost due to an injunction would be transferred to all Honeywell employees in the form of
increased health care contributions. Gregg Decl. ¶ 39.
Because the EEOC has not established that Honeywell employees will face irreparable
harm—and in light of the additional harms faced by Honeywell and its employees if an
injunction were to be ordered—the balance of harm factor also weighs in favor of Honeywell. If
an injunction freezing all surcharges is ordered now, Honeywell employees who opt-out of the
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biometric screening may ultimately have to pay the surcharge if Honeywell prevails on the
merits. On the other hand, if the EEOC prevails on the merits, Honeywell employees who were
wrongfully assessed a surcharge based on their decision to forego the biometric testing can be
made whole by a refund.
3. Likelihood of Success on the Merits and the Public Interest
As expressed at the hearing, this case raises intriguing legal questions that relate to
important public interest considerations. However, the remaining two Dataphase factors—the
likelihood of success on the merits and an evaluation of the public interests at stake—need not be
analyzed in detail to rule on this motion. Bandag, Inc. v. Jack’s Tire & Oil, Inc., 190 F.3d 924,
926 (8th Cir. 1999) (“The basis of injunctive relief in the federal courts has always been
irreparable harm and inadequacy of legal remedies.”); see also Instruments v. Rivard
Instruments, 479 F. Supp. 2d 968, 991 (N.D. Iowa 2007) (holding that “the lack of irreparable
harm is sufficient ground for denying or vacating a preliminary injunction.”) (citing Aswegan v.
Henry, 981 F.2d 313, 314 (8th Cir. 1992)).
The Court also notes that the uncertainty surrounding the legal questions at issue here
prevents the remaining Dataphase factors from weighing heavily in favor of either party. The
EEOC argues that Honeywell is violating the ADA because the biomedical test associated with
its wellness program constitutes an involuntary medical examination that is not job related. See
42 U.S.C. § 12112(d)(4)(A) (“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.”); see also EEOC’s Enforcement Guidance:
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DISABILITY-RELATED INQUIRIES AND MEDICAL EXAMINATIONS OF EMPLOYERS UNDER THE
AMERICANS WITH DISABILITIES ACT Q. 22 (2000) (available at
http://www.eeoc.gov/policy/docs/guidance-inquiries.html) (“A wellness program is ‘voluntary’
as long as an employer neither requires participation nor penalizes employees who do not
participate.”).
Honeywell contends that its wellness program is covered under the ADA’s safe harbor
provision set forth in 42 U.S.C. § 12201(c)(2). The safe harbor provision waives application of
ADA Subchapters I through III and Title IV against entities “establishing, sponsoring, observing
or administering the terms of a bona fide benefit plan that are based on underwriting risks,
classifying risks, or administering such risks that are based on or not inconsistent with state
law.”; see Seff v. Broward Cnty., 691 F.3d 1221, 1223 (11th Cir. 2012) (affirming district court
decision that found an employer wellness program a “term” of a group health plan and thus
protected by the safe harbor provision).
Further, even if Honeywell is not found to be a covered entity under the ADA’s safe
harbor provision, Honeywell argues that its wellness program comports with the ADA’s
voluntary wellness program provision. To this end, Honeywell argues that the EEOC’s
enforcement guidance deserves no deference in light of Congresses’ express approval of
surcharges used in conjunction with wellness programs, as expressed in the Affordable Care Act
(“ACA”). See 42 U.S.C. § 2705(j)(3)(A) (“A reward may be in the form of a discount or rebate
of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as
deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit
that would otherwise not be provided under the plan.”) (emphasis added). In short, Honeywell
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contends that “Congress would not expressly endorse in one federal statute what is illegal under
another pre-existing federal statute.” Def.’s Mem. Opp’n Prelim. Inj. at 30.
The EEOC also alleges that Honeywell’s wellness program violates GINA because the
program collects medical information from covered spouses, who are considered “family
members” under GINA. See 29 CFR § 1635.3(a)(1). Honeywell maintains that the biometric
test does not constitute a “genetic test,” which is defined as “analysis of human DNA, RNA,
chromosomes, proteins, or metabolites, that detects genotypes, mutations, or chromosomal
changes.” 29 U.S.C. § 1191b(d)(7).
In sum, great uncertainty persists in regard to how the ACA, ADA and other federal
statutes such as GINA are intended to interact. See, e.g., E. Pierce Blue, Wellness Programs, the
ADA, and GINA: Framing the Conflict, 31 HOFSTRA LAB. & EMP. L.J. 367 (Spring 2014); THE
EEOC, Meeting of May 8, 2013 – Wellness Programs Under Federal Equal Employment
Opportunity Laws, www.eeoc.gov/eeoc/meetings/5-8-13/ (last visited November 5, 2014). As a
general matter, EEOC enforcement actions are designed to be in the public interest. At the same
time, Honeywell’s wellness program—which aims to raise awareness of important health
indicators among its employees without requiring specific behavior changes—appears to comply
with the ACA’s surcharge limits while also supporting one of the primary goals of healthcare
reform: reducing overall health care costs. Recent lawsuits filed by the EEOC highlight the
tension between the ACA and the ADA and signal the necessity for clarity in the law so that
corporations are able to design lawful wellness programs and also to ensure that employees are
aware of their rights under the law. See, e.g., EEOC v. Orion Energy Systems, Inc., Case No.
14-1019 (E.D. Wis. filed Aug. 20, 2014); EEOC v. Flambeau, Inc., Case No. 14-638 (W.D. Wis.
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filed Sept. 30, 2014). Should this matter proceed on the merits, the Court will have the
opportunity to consider both parties’ arguments after the benefit of discovery in order to
determine whether Honeywell’s wellness program violates the ADA and/or GINA.
IV. CONCLUSION
Based upon all the files, records, and proceedings herein, IT IS HEREBY ORDERED
that the EEOC’s motion [Docket No. 2] is DENIED.
BY THE COURT:
s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: November 6, 2014.
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