Earlier this year, the Equal Employment Opportunity Commission (EEOC) released its litigation and enforcement statistics for the fiscal year 2015, providing us with insight on the types of employment practices liability (EPL) lawsuits faced by businesses across diverse industries, including the home health care sector. Illegal background checks, health-related employment and pregnancy discrimination and unpaid internships are top-trending employment practices litigation cases, according to EEOC stats and insurance industry experts. Employment-related risks rank among a business’ most potentially damaging exposures, with employers of all sizes facing possible damage from EPL lawsuits, including financial disaster and/or irreparable damage to an organization’s reputation.
Let’s take a look at some of the trending EPL litigation affecting businesses:
- Illegal Background Checks. Anytime a business uses an applicant’s or employee’s background information to make an employment decision, the employer must comply with federal laws that protect applicants and employees from discrimination. This includes discrimination based on race, color, national origin, sex, or religion; disability; genetic information (including family medical history); and age (40 or older). These laws are enforced by the EEOC. In addition, when you run background checks through a company in the business of compiling background information, you must comply with the Fair Credit Reporting Act (FCRA).
In the last couple of years, class-action lawsuits against prospective or current employers requesting background checks on applicants or employees have been mushrooming, particularly litigation that involved technical violations on the part of employers. The FCRA requires an employer to provide a disclosure and authorization form to a potential new hire that informs the candidate, as part of the hiring process, that the employer may perform a background check for employment purposes and the employer is seeking the applicant’s written authorization or consent to do so. The statute requires this disclosure in a completely stand-alone document, without any extraneous information. In addition to the required disclosure and authorization form provided before screening occurs, employers are obligated to provide a notice of intent to take adverse action form, a copy of the Summary of Your Rights under the FCRA and a copy of the background check to those applicants being turned away due to information found on the screen. Once a final decision not to hire has been made, employers must also supply the applicant with a final notice of adverse action letter. Most FCRA class-action lawsuits against employers are over alleged violations that could have easily been avoided by a review of forms and processes, according to attorneys.
- Genetic Discrimination. The Genetic Information Nondiscrimination Act of 2008 (GINA) took effect in November 2009 and prohibits the use of genetic information to discriminate in employment while also puts restrictions on employers requesting, requiring, or purchasing genetic information on their employees. GINA governs the privacy of a person’s genetic information, which is sometimes released with family medical histories. “Genetic information” includes, among other things, information about the “manifestation of a disease or disorder in family members of an individual.” Family members include certain blood relatives, such as parents, grandparents, and children, but also include spouses and adopted children.
In May 2016, the EEOC issued a ruling amending GINA. There is now an exception to GINA’s general prohibition against acquiring genetic information of applicants or employees where employers offer voluntary health or genetic services to employees or their family members. Some employers want to offer inducements for employees and their family members to answer questions about their health or to take medical examinations as part of a wellness program. This rule clarifies that an employer may offer a limited incentive for an employee’s spouse to provide information about the spouse’s current or past health status as part of a voluntary wellness program. In addition, the new rule also includes a new paragraph that prohibits employers from denying access to health insurance or any package of benefits to, or retaliating against, any employee whose spouse refuses to provide information about his or her current or past health status to an employer wellness program.
- Pregnancy Discrimination. The Pregnancy Discrimination Act (PDA) is an amendment to Title VII of the Civil Rights Act of 1964 and prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions by employers with 15 or more employees, including state and local governments. Women who are pregnant or affected by related conditions must be treated in the same manner as other applicants or employees with similar abilities or limitations. Employers may not refuse to hire a woman because of her pregnancy, a pregnancy-related condition, or the prejudices of co-workers, clients, or customers. Since the start of the fiscal year 2011, EEOC has filed more than 45 lawsuits involving pregnancy discrimination. During that time, the federal agency has recovered approximately $3.5 million. An example of a pregnancy discrimination case in the home health care sector involved a home health aide who sued her employer last year after she was told to obtain a doctor’s note stating that she could perform all job duties with the only limitation being that she should not lift or pull more than 25 lbs. Despite the medical release to work, the home health care employer terminated her employment just minutes after she furnished the required note.
The laws involving employment practices are complex and continually evolving and require legal and HR expertise to ensure that your organization remains in compliance. In addition, having proper best practices in place as well as an insurance program that addresses the varied exposures that come into play with employment-related risks is critical. Manchester Specialty provides a total insurance solution for the home health care industry, including Employment Practices Liability Insurance (EPLI), which covers wrongful acts arising from the employment process, including wrongful termination, discrimination, sexual harassment, and retaliation. EPLI is available as a stand-alone coverage, and can also be a part of a management liability package policy. For more information about our insurance solutions, you or your local agent/broker may contact us at 855.972.9399.