GINA, ADA, and other claims over wellness program must be arbitrated

Having signed an agreement to abide by an employer’s dispute resolution policy, an employee had to arbitrate his claim that a wellness program and required medical assessments violated Title VII, the ADA, GINA, and other federal laws. Dismissing his claims without prejudice, a federal court in Indiana also explained that the fact that the employee also asserted claims against a non-signatory to the agreement did not change the analysis, even if that meant parallel proceedings in court and in arbitration. The employee’s claims against the company that performed the medical screenings were dismissed for lack of an employment relationship.

The employee participated in a health insurance program through ACS and affiliated company Xerox Business Services (the court labeled the corporate relationship as “murky” and referred to the two as a single entity). A third defendant, Quest, was authorized to provide employees access to health insurance information via its online computer systems, among other means.

Wellness program. In 2014, the employer implemented a wellness program and the employee had to take a nicotine test or pay a surcharge of $500 per year. He claimed it also tested other health-related issues unrelated to the employer’s business and, in order to take the test, he was required to: 1) agree to indemnify Quest; 2) agree to submit to New Jersey jurisdiction; 3) allow a third party to electronically access his private information by putting cookies on his private computer system; and 4) allow a third party to share his personal health information with third parties for reasons unrelated to the test. The employee and his wife were offered $1,200 to submit to medical inquiries and complete a screening assessment. He was not allowed to add his spouse to his insurance unless she took the test and completed the assessment.

Stigmatized. The employee went to a Quest clinic and asked to only be tested for nicotine use, or at the very least to view the screening assessment before agreeing to complete it. Quest refused both requests and, when he wouldn’t take the full test, the employee was labeled as a smoker though he claimed he was not. He appealed but was ignored, though he claimed that Xerox regularly acted on the appeals of younger employees. He also claimed the defendants communicated to “others” that he uses nicotine, which “tends to lower a person’s reputation.” In addition, he asserted that he will always carry that stigma, particularly with insurers.

After the employee’s appeal and an EEOC complaint, the employer allegedly altered his benefits and demanded he take unreasonable computer security measures while off duty, essentially holding him out as “being a smoker or having private information that he did not want to share and therefore must be hiding something of a negative sort.” He claimed that as a result, colleagues and vendors treated him differently. He filed suit under Title VII, the Genetic Information Nondiscrimination Act (GINA), HIPAA, the ADA, the ADEA, and state law.

Motion to compel arbitration. ACS and Xerox moved to compel arbitration under a dispute resolution plan (DRP) consisting of the plan document itself and an acknowledgement signed by the employee. Reading the two documents together, the court found that the employee agreed to be contractually bound by the DRP and its arbitration provisions requiring that any dispute over a legally protected right arising from or relating to his employment with Xerox must be arbitrated (either directly or after trying optional informal processes under the DRP). Indeed, the DRP defined dispute to include any alleged violation of federal, state, or other law, statute, regulation, or ordinance. The court further concluded that, to the extent the employee challenges the enforceability of the DRP, he must bring that dispute to an arbitrator as well under the express terms of the DRP.

Although the employee argued that the DRP did not require him to arbitrate because he had also named a third part, Quest, as a defendant, the court explained that the joinder of a non-signatory did not defeat the employee’s contractual obligation to arbitrate his claims against ACS and Xerox. Based on the foregoing, and in the interest of judicial economy, the court dismissed the claims against Xerox and ACS.

No attorneys’ fees awarded. However, the court denied the Xerox’s request for attorneys’ fees under Rule 11, explaining that while the employee should have pursued his claims against the company through arbitration, his position concerning the effect of Quest’s involvement and its relationship to Xerox was not completely groundless. It was at least plausible to argue that due to Quest’s involvement in the events giving rise to the dispute, it would not make sense to arbitrate without Quest and have potentially duplicative parallel proceedings.

No employment relationship with Quest. The court also granted Quest’s motion to dismiss, finding that the employee did not sufficiently allege an employment relationship under Title VII and consequently under GINA or the ADA either (both of which incorporate Title VII’s definition for “employer”). Furthermore, he failed to sufficiently allege a basis to hold Quest liable under an agency theory. There was no allegation that Quest controlled important aspects of his employment. Instead, the employee conclusorily alleged that Quest was an agent of Xerox and employer for purposes of those discrimination claims. His HIPAA claim also failed because that statute does not provide a private right of action. The court declined to exercise supplemental jurisdiction over the remaining defamation claim against Quest under state law.

SOURCE: Dittmann v. ACS Human Services LLC, (N.D. Ind.), No. 2:16-cv-16-PPS-PRC, September 26, 2016.

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