In an important new decision, the Massachusetts Supreme Judicial Court recently held that a qualifying patient who has been terminated from employment for testing positive for marijuana as a result of her lawful medical marijuana use may state a claim of disability discrimination under that state’s anti-discrimination statute. As we blogged with respect to a after a similar decision in Rhode Island, this holding has significant implications for employers that drug test for marijuana use because 29 states plus the District of Columbia have enacted legislation legalizing medical and/or recreational marijuana use.

Background

The plaintiff received an offer of employment conditioned on her passing a mandatory drug test. Before taking the test, the plaintiff told her would-be supervisor that she would test positive for marijuana because she was a qualifying medical marijuana patient under Massachusetts law and used marijuana to treat her Crohn’s disease and irritable bowel syndrome. The supervisor assured her that her medicinal use of marijuana would not be an issue with the company. After submitting a urine sample for the mandatory drug test, the plaintiff completed her first day of work without incident. At the conclusion of that day, however, she was terminated for testing positive for marijuana. She was told that the company did not consider whether the positive test was due to the lawful medicinal use of marijuana because it followed federal, not state, law.

Court’s Holding and Rationale

The Court rejected plaintiff’s claims under the Massachusetts medical marijuana act, finding there to be no private right of action under the statute, which merely decriminalizes medical marijuana use and does not provide express employment protections. Nonetheless, the Court allowed to the plaintiff’s disability discrimination claim to proceed. In so holding, the Court rejected the employer’s arguments that the plaintiff could not be a qualified handicapped person under the statute because the only accommodation she sought (possession and use of marijuana) is a federal crime, and that the plaintiff was discharged because she tested positive for an illegal substance, not because of her disability.

Rather, the Court concluded that, at least in some circumstances, an employer may have an obligation to accommodate the off-duty use of marijuana for medicinal purposes. Like the Rhode Island trial court in Callaghan v. Darlington Fabrics Corporation, the Massachusetts Court determined that the medical marijuana act implicitly recognizes that off-site medical marijuana might be a permissible accommodation of an individual’s disability, and further concluded that the fact that marijuana may be illegal under federal law does not make it per se unreasonable as an accommodation.

The court rejected arguments that the federal classification of marijuana as a controlled, and thus illegal, substance should preempt the state law classification. First, the court noted that only the plaintiff, and not the employer, risked federal prosecution for using marijuana, and therefore the legality of its use should not impact a determination of its reasonableness as an accommodation. Second, the court concluded that to adopt the federal classification would be to improperly reject the determination of Massachusetts voters to legalize the drug for medical use.

Notably, just because the plaintiff may proceed on her disability discrimination claim does not mean she ultimately will succeed. This decision comes at the motion to dismiss stage, and the employer still has the opportunity to demonstrate on summary judgment or at trial that accommodating the plaintiff’s marijuana use would constitute an undue hardship.

Key Takeaways

This decision is the first in any state in which the applicable medical marijuana act merely decriminalizes to permit a disability discrimination claim to proceed on such facts. The decision calls into question whether, even in these states, employers may maintain zero tolerance marijuana testing policies. Prior to this year, decisions in other jurisdictions have held that employers operating in such jurisdictions may enforce such policies and take adverse action against medical marijuana users simply for testing positive. With claims in Rhode Island and now Massachusetts surviving motions to dismiss, these decisions may indicate a trend by courts to provide greater protections for lawful medical marijuana users.

Wherever employers operate, it is clear that they must take added precautions in administering their drug testing policies. While employers may continue to prohibit the on-duty use of or impairment by marijuana, employers must consider the following when testing for marijuana:

  • Employers should review their drug-testing policies to ensure that they (a) set clear expectations of employees; (b) provide justifications for the need for drug-testing; and (c) expressly allow for adverse action (including termination or refusal to hire) as a consequence of a positive drug test.
  • Employers may consider or be required to adjust or relax certain hiring policies to accommodate lawful medical marijuana users.
  • When an individual tests positive ostensibly because marijuana is used to treat a disability, employers, particularly those in Massachusetts, may be required to engage in the interactive process. First, however, employers should evaluate whether the individual has a qualified disability that warrants an accommodation and whether allowing the individual to use medicinal marijuana would allow rather than hinder the individual’s ability to perform the essential functions of the job.
  • Employers concerned with the application of federal law may, during the interactive process, explore whether another equally effective medical alternatives to marijuana use may enable the individual to perform the essential functions of the job. Note, however, employers in states requiring accommodation of medical marijuana use may be prohibited from exploring these alternatives.
  • Where no such alternative exists or can be agreed upon, employers who cannot accommodate even lawful, off-duty medicinal marijuana use must be prepared to demonstrate that such accommodation would constitute an undue hardship.
  • Any such decision should be well-documented and well-coordinated by the relevant stakeholders.
  • In any case, hiring managers should be trained not to provide assurances as to whether and how marijuana use may be accommodated. If an applicant or employee discloses marijuana use, that disclosure should immediately be referred to Human Resources and addressed by a Human Resources professional in coordination with counsel.

Clearly, employers enforcing zero-tolerance policies should be prepared for future challenges to such policies. In Massachusetts as well as in those states prohibiting discrimination against and/or requiring accommodation of medical marijuana users, such challenges are now more likely to survive a motion to dismiss.

An employee on an extended medical leave to recuperate from shoulder surgery posts pictures of his active Caribbean vacation. His employer is justified in terminating him, right?  Maybe not.

On April 19, 2017, the Eleventh Circuit reversed a trial court ruling and held that a former employee had raised a genuine issue of material fact regarding whether he was terminated in retaliation for using FMLA despite the former employee posting pictures from various vacations on Facebook during his time off of work to recuperate from surgery. This case, Jones v. Gulf Coast Health Care of Delaware, LLC, 2017 U.S. App. LEXIS 6766 (11th Circ. 2017), serves as a cautionary tale of why employers need to be careful and consistent while following proper steps when terminating employees—even in situations where the evidence of employee wrongdoing might appear obvious.

The plaintiff, Rodney Jones, was formerly employed as the activity director for the defendant, Accentia Health. His job included desk work as well as regular physical activity.  During his employment, Accentia Health approved Jones’s request for FMLA leave for shoulder surgery.  When Jones was unable to resume his full-time job duties at the end of the 12-week FMLA period, Jones requested a modified duty assignment, which was rejected by Accentia Health. Jones then requested additional time off from work, and Accentia Health granted another 30 days of “non-FMLA medical leave” in order to complete his physical therapy.

During the additional 30 days of leave, Jones twice visited the Busch Gardens theme park and went on a trip to St. Martin. Jones took pictures while on the vacations—including pictures of himself on the beach, posing by a boat wreck, and in the ocean—and then posted those pictures on Facebook.  An anonymous co-worker provided the pictures to management.  When Jones returned to work at the end of the additional time off, Jones was suspended by his supervisor and was later terminated. Accentia claimed that Jones was fired because he “(1) posted photos from his outings in violation of the company’s social-media policies, and (2) displayed poor judgment as a supervisor in posting these photos, even if this activity did not violate the company’s social-media policies.”

The appellate court found that Jones presented sufficient evidence that a fact-finder could conclude that Accentia Health’s stated reasons for the termination were pretexual. In arriving at this decision, the court focused on inconsistencies and contradictions in the reasons presented to Jones.  These inconsistencies included a formal termination letter that didn’t mention the Facebook photos, and failing to let Jones know at any time that he violated the company’s social media policy.

Employers need to be consistent when taking adverse action against an employee when FMLA is involved. This includes making sure that both written and oral communications to the affected employee are consistent and clear. Employers should take the time necessary to gather the proper facts and have better communication with the potentially affected employee before deciding upon a course of action and before letting the employee know what action might be taken. This will help ensure that any eventual adverse action is communicated clearly and consistently to the affected employee and will help limit the potential for allegations of a pretexual termination.

In a landmark decision, the U.S. Court of Appeals for the Seventh Circuit, sitting en banc, held that discrimination on the basis of sexual orientation is covered under Title VII of the Civil Rights Act’s protections against discrimination on the basis of sex.

In Hively v. Ivy Tech Community College of Indiana, Kimberly Hively, a lesbian part-time professor at Ivy Tech, applied for but was denied several full-time positions with the college. After her employment was later terminated, she filed a lawsuit alleging that she was denied promotion and then terminated because of her sexual orientation. The lower courts held that they were bound by Seventh Circuit precedent to rule that sexual orientation was not a protected category under Title VII. On July 28, 2016, a three-judge panel of the Seventh Circuit held that sexual orientation discrimination is not sex discrimination. The Seventh Circuit agreed to hear the case en banc with all 11 judges.

Deviating from almost every other circuit court, the Seventh Circuit voted 8-3 that discrimination on the basis of sexual orientation is a form of sex discrimination. In March, the Eleventh Circuit held in Evans v. Georgia Regional Hospital, et al. that it was bound by precedent that concluded that Title VII does not extend protections on the basis of sexual orientation. Later in the month, the Second Circuit reached a similar conclusion in Christiansen v. Omnicom Group, et al. While that court found that the plaintiff had no viable claim for sexual orientation discrimination, it remanded the case to the Southern District of New York to address whether the plaintiff’s claims could be considered sex stereotyping discrimination.

The court acknowledged that the three-member panel in 2016 “described the line between gender nonconformity claim and one based on sexual orientation as gossamer-thin;” the majority now concludes that such a line “does not exist at all.”

Citing to the Supreme Court’s decisions in Meritor Sav. Bank, FSB v. Vinson (sexual harassment is discrimination on the basis of sex), Price Waterhouse v. Hopkins (sex stereotyping is discrimination on the basis of sex), and Onacle v. Sundowner Offshore Servs., Inc. (same sex harassment is discrimination on the basis of sex), the court held that sex discrimination has been understood to “cover far more than the simple decision of an employer not to hire a woman for Job A or a man for Job B.”

The majority addressed Hively’s two legal theories – (1) the comparative method, whether a woman and a man would be treated differently under the same facts, and (2) the associational theory, whether discrimination occurs against an individual because of the protected characteristic of one with whom the individual associates. Under each theory, the court reduced each inquiry to a simple question – if the employee in question were male instead of female, would it matter that the employee was in a relationship with a woman? Answering that if the sex of a plaintiff such as Hively in a lesbian relationship was changed, then the outcome would be different, the Court held that discrimination on the basis of sexual orientation necessarily is discrimination on the basis of sex.

The court acknowledged the long-standing critique of the judiciary with respect to civil rights issues – that the court was attempting to “legislate from the bench.” Writing for the majority, Chief Judge Diane P. Wood wrote that the decision to “amend” Title VII to add sexual orientation as a new protected category “lies beyond our power.” She further wrote: “We must decide instead what it means to discriminate on the basis of sex, and in particular, whether actions taken on the basis of sexual orientation are a subset of actions taken on the basis of sex. This is a pure question of statutory interpretation and thus well within the judiciary’s competence.” In response to the dissent’s reliance upon legislative intent, the Court noted that the definition of sex discrimination has expanded in numerous ways since the passage of Title VII, and that the Congress that enacted Title VII likely would be surprised as to the extent of expansion.

In an expectedly colorful concurrence, Judge Posner acknowledged that the Court is, in fact, re-writing Title VII because society’s definition of “sex” has changed over the past 50 years. Instead of relying solely upon stereotyping claims, as the majority writes, Judge Posner instead recognized that the judiciary has long been interpreting statutory language in the context of society’s new and changing understanding of terms. And here, Posner writes, that we should not rely upon the 88th Congress’ “failure” to divine how society’s interpretation of the term would change. Rather, he writes: “We understand the words of Title VII differently not because we’re smarter than the statute’s framers and ratifiers but because we live in a different era, a different culture.”

With a Circuit split, the question of whether sexual orientation is a protected characteristic under Title VII is ripe for review by the Supreme Court, although this case likely will not be the vehicle. Ivy Tech has released a statement that it does not intend to appeal. The decision in this case, however, may affect the Eleventh Circuit’s decision to rehear the Evans case en banc. When this issue does reach the Supreme Court, the soon-to-be-confirmed Supreme Court justice Neil Gorsuch could render an impactful vote should this reach the highest court.

Dallas, TexasIn a decision impacting the interactive process, the Northern District of Texas held in EEOC v. Methodist Hospitals of Dallas, No. 3:2015-cv-03104 (N.D. Tex. Mar. 9, 2017), that employers do not violate the Americans with Disabilities Act (“ADA”) by requiring individuals with disabilities that need reassignment as a reasonable accommodation to compete for vacant positions.

Plaintiff, a former patient care technician, requested an accommodation after an on-the-job injury precluded her from performing the required duties of lifting and transporting patients. Though she met the minimum qualifications for two vacant positions, she was not chosen for the positions and was terminated. The EEOC alleged that the Hospital maintained an unlawful policy by requiring individuals with disabilities to compete for vacant positions where the individual was qualified for the position. The Hospital argued that the EEOC was attempting to mandate additional affirmative action not required by the ADA by asserting that the employer could not choose the most qualified applicant for a vacant position.

Central to the issue in this case, the ADA lists reassignment to a vacant position as a form of reasonable accommodation. 42 U.S.C. § 12111(9). The EEOC guidance on reasonable accommodation also states that an employee does not need to be the best qualified individual for the position in order to be reassigned to a vacant position. However, the circuits have split regarding whether an employer violates the ADA by requiring individuals with disabilities to compete with other candidates for reassignment to a vacant position. Although the Fifth Circuit has not directly addressed this issue, the court reviewed the authority in the Fifth Circuit regarding affirmative action for reassignment and determined that the Fifth Circuit would likely hold, similar to the Eleventh and Eighth Circuits, that the ADA does not require preferential treatment for reassignment and merely requires employers to allow individuals with disabilities to compete equally for vacant positions.  The court declined to follow contrary precedent in the Tenth and D.C. Circuits.

Employers should review their policies regarding reassignment for employees requesting an accommodation due to a disability and, as there is currently a circuit split, review the applicable law in their jurisdiction to ensure their policies are lawful. When an employee seeks reassignment to a vacant position as a reasonable accommodation, employers should work with counsel to determine whether they can require that employee to compete with other applicants for that position.

In a decision with significant implications for private hospitals, on March 7, 2017, the Third Circuit held in Doe v. Mercy Catholic Medical Center that medical residents may bring private causes of action for sex discrimination under Title IX against private teaching hospitals operating residency programs, and are not limited to claims under Title VII.

Title IX of the Education Amendments of 1972, 20 U.S.C. §1681, et seq., prohibits sex discrimination in any “education program or activity receiving federal financial assistance.” 20 U.S.C. § 1681(a). A former resident alleged the director of her program repeatedly sexually harassed her and then retaliated against her for resisting his advances and complaining about them, culminating in her termination from the program. In deciding a question of first impression, the Third Circuit held that Mercy could be sued under Title IX because, under the allegations of the complaint, its medical residency program constituted an “education program or activity” provided by a private organization principally engaged in the business of providing health care, 20 U.S.C. §1687(3)(A)(ii), that received Federal financial assistance. In so holding, Court established a test to determine whether a program is educational, asking whether it is structured as an educational program, allows participants to obtain a degree or certification or qualify for an examination, has instruction, tests, or grades, accepts tuition, and is promoted as educational.  The Court had little trouble finding that the allegations demonstrated plaintiff was enrolled in a multi-year regulated program of study and training that led to qualification to take a certification examination, and that this program was run by Mercy in affiliation with Drexel University’s College of Medicine, a university program also plausibly covered by Title IX.

Notably, the Court did not reach the question of whether Mercy’s receipt of Medicare payments constituted “Federal financial assistance” under Title IX because Mercy had not raised this issue in the District Court, although it expressed some skepticism towards Mercy’s argument that such payments merely flowed from “contracts of insurance.” In this regard we note that a number of courts have found Medicare payments can constitute Federal financial assistance for the purpose of coverage under Title VI and the Rehabilitation Act.

Importantly, the Court rejected Mercy’s argument that the plaintiff’s remedy should be limited to an action under Title VII (which would have been time-barred) because she was also an employee, finding that there is concurrent liability under Title IX. In this regard it followed decisions from the First and Fourth Circuits, rejecting conflicting decisions from the Fifth and Seventh Circuits that predated the Supreme Court’s decision in Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005), where the Supreme Court found a high school coach who alleged a retaliatory termination could sue under Title IX. Thus, it found that causes of action exist under Title IX for claims of both retaliation and quid pro quo sexual harassment and that, where an individual is covered by both Title IX and Title VII, that plaintiff can file complaints through either means. However, the Court did not reach the question of whether Title VII’s potential applicability barred a Title IX claim for hostile environment because that claim was time-barred under Title IX’s two-year statute of limitations.

This case stands as a warning to hospitals and other health care institutions providing accredited teaching and training programs to ensure that they have in place and follow policies that not only bar sexual discrimination, harassment and retaliation, both in general and with respect to medical residency and other educational programs, but also provide an effective complaint procedure for addressing claims that these policies have been violated.  These institutions also should be aware that employees covered under both Title VII and Title IX may pursue their discrimination claims under Title IX in federal court without first exhausting their administrative remedies, as required under Title VII.

How will the Trump administration handle discrimination cases involving transgender employees? The EEOC’s pursuit of a sex discrimination claim on behalf of Aimee Stephens, a transgender woman who was terminated by a Michigan funeral home for expressing her intention to dress in conformance with her gender identity, will be an early indicator.

In a brief filed with the Sixth Circuit on January 26, 2017, Stephens argues that the interests of transgender individuals will not be adequately represented under the new administration. Under the Obama administration, the EEOC sued Stephens’ former employer, R.G. & G.R. Harris Funeral Homes, for sex discrimination on her behalf. The funeral home owner argued permitting Stephens to dress as a woman would conflict with his Christian beliefs and pose a threat to his free exercise of religion. The Eastern District of Michigan dismissed the EEOC’s lawsuit in August 2016 on the grounds that the funeral home is exempt from Title VII under the Religious Freedom Restoration Act (“RFRA”). Although the EEOC appealed to the Sixth Circuit in October 2016, Stephens filed a motion to intervene as plaintiff-appellant, citing her belief that the new administration would not adequately represent her interests.

Over the course of Obama’s presidency, the trend in federal government was the extension of protections for transgender individuals. Many federal agencies, including the EEOC, OFCCP, OSHA, and HHS, previously promulgated rules and guidance affording increased protections for transgender individuals. Numerous federal courts, including the First, Sixth, Ninth, and Eleventh circuits, have applied theories of sex stereotyping under Section 1983 or Title VII, resulting in protections for transgender individuals. Few courts, however, have found gender identity or transgender status is a protected class under Title VII. Indeed, the district court in G.R. & R.G. Funeral Homes rejected that position when presented by the EEOC.

Whether the EEOC will continue to aggressively pursue the expansion of Title VII to include transgender protections remains an open question. While still just a rumor, it has been reported that the Trump administration is considering an executive order that would provide individuals and organizations the ability to deny employment, as well as services and other benefits, to LGBT individuals on religious grounds. In her motion, Stephens references the removal of the White House webpage dedicated to LGBT rights, the federal government’s requests for extensions of time in other civil rights cases, and the President’s authority over EEOC appointments as reasons she believes her interests may not be adequately represented. Further, the current acting chair of the EEOC, Victoria Lipnic, was one of two commissioners who voted against the EEOC’s July 2015 decision that held that sexual orientation is included within the definition of sex for discrimination purposes under Title VII. The Trump administration also has rescinded guidance previously issued by the departments of Education and Justice under the Obama administration that took the position that the Title IX prohibitions of discrimination “on the basis of sex” require access to sex-segregated facilities based on gender identity.

On the other hand, the EEOC filed its opening brief with the Sixth Circuit just two weeks after Stephens moved to intervene, arguing that (a) discrimination based on transgender status and/or transitioning is inherently sex discrimination under Title VII; and (b) the RFRA does not provide the for-profit funeral home a defense in this case. This stance is consistent with that taken by the EEOC while Obama was in office. Further, Trump has indicated Executive Order 13672, which banned federal contractors from discriminating against LGBT employees, will stand.

Stephens’ case may have implications for the protection of transgender employees at the federal level, but employers need to keep in mind that many states explicitly prohibit discrimination against transgender workers. At least sixteen jurisdictions – including California, Illinois, Maryland, Massachusetts, New Jersey and the District of Columbia – now include gender identity as a protected characteristic under their discrimination laws.

Employers are advised to familiarize themselves with their state and local laws, to take a proactive role in preventing transgender, or gender identity, discrimination in the workplace, and to have a plan in place to accommodate the potential needs of transgender workers.

In a notable recent court decision highlighting transgender issues and employer sponsored benefit plans, on January 13, 2017, in Baker v. Aetna Life Ins. Co., 2017 U.S. Dist. LEXIS 5665, 2017 WL 131658 (N.D. Tex.), Aetna Life Insurance Co. (“Aetna”) defeated a claim by a transgender employee of L-3 Communications Integrated Systems LP (“L-3”) who alleged that Aetna’s denial of her disability benefits constituted discrimination based on her gender identity. The plaintiff, Charlize Marie Baker (“Baker”), is a participant in L-3’s Employee Retirement Income Security Act (“ERISA”) covered group health plan and short term disability benefits plan (“STD Plan”). Aetna is the third party administrator (“TPA”) of the group health plan and the claim fiduciary and administrator of the STD Plan.

In 2011, Baker began transitioning from male to female, legally changing her name and gender designation on all government issued documents. In 2015, after a consultation with a health care professional who determined that breast implants were medically necessary to treat gender dysphoria, Baker scheduled surgery and sought benefits under the STD Plan to cover her post-surgery recovery. Coverage under the group health plan and benefit claims under the STD Plan were denied. Filing suit against Aetna and L-3, Baker alleged that Aetna and L-3 discriminated against her based on her gender identity in violation of Section 1557 of the Affordable Care Act (the “ACA”), that Aetna denied her benefits under the STD Plan in violation of ERISA, and that Aetna and L-3 violated Title VII by discriminating against her based on her sex.

The court held that there is no controlling precedent that recognizes a cause of action under Section 1557 for discrimination based on gender identity with Baker failing to cite any precedent that recognizes such a cause of action. The court also held that ERISA does not recognize such a claim. Specifically, the court concluded that it is up to Congress to decide whether it wants to create in ERISA a protection that the statute does not expressly provide. Lastly, regarding Baker’s Title VII claims, the court found that Aetna was not an employer of Baker under the “single employer” test or the “hybrid economic realities/common law control” test. However, the court declined to dismiss Baker’s Title VII claims against L-3, finding Baker did sufficiently argue that she was denied employee benefits due to her sex.

Takeaways

While the Northern District of Texas declined to find a cause of action for gender identity discrimination under Section 1557 of the ACA, there are several cases of gender identity or transgender discrimination pending that may further impact the law for these benefit claims under Section 1557. There is little likelihood, however, that a claim of gender identity discrimination will be successful under ERISA. If the ACA is repealed under the Trump administration, Section 1557 will no longer be available and transgendered employees would be limited to claims under Title VII, to the extent that employees are successful in arguing that discrimination on the basis of gender identity constitutes sex discrimination.

With flu season quickly approaching, health care employers may be considering mandatory influenza vaccinations for their workforce. Mandatory vaccination policies may dramatically increase patient safety, but they may also cause friction within the workforce when employees object on religious grounds to being vaccinated.

While no federal and few state statutes address the legality of enforcing mandatory vaccination policies, the EEOC and private litigants recently have moved this issue forward in the courts. Under Title VII of the Civil Rights Act of 1964 (“Title VII”), employees with sincerely held religious beliefs are entitled to a reasonable accommodation of those beliefs, provided that such accommodation does not create an undue hardship for their employer. This year, the EEOC has filed at least three separate lawsuits against hospitals in Pennsylvania, Massachusetts, and North Carolina alleging failure to accommodate religious beliefs in relation to such hospitals’ respective mandatory influenza vaccination policies.[1]

These lawsuits follow shortly on the heels of a decision in the District Court of Massachusetts, granting summary judgment in favor of a hospital employer that terminated an employee who refused a mandatory flu vaccination because of her religious beliefs. In Robinson v. Children’s Hospital Boston, Civ. No. 14-10263 (D. Mass. Apr. 5, 2016), the defendant hospital implemented a policy requiring all persons who worked in or accessed patient care areas to be vaccinated against the flu to ensure the safest possible environment and highest possible care for its patients.

The plaintiff, one of the first hospital employees to interact with patients as they entered the emergency room, refused the flu vaccination for religious reasons and was permitted by the hospital to explore whether there was another internal position outside of patient care that would exempt her from the flu vaccine. The court concluded that the hospital’s efforts to locate another position for the plaintiff—including allowing her to use earned time off to search for employment elsewhere—and to label her termination a voluntary resignation to preserve her ability to re-apply for other hospital positions in the future, constituted a reasonable accommodation under Title VII.

The court also concluded that granting the plaintiff’s request not to be vaccinated would have caused the hospital an undue hardship because it would have increased the risk of transmitting influenza to the hospital’s already vulnerable patient population. The admissible evidence led the court to find that (i) health care employees are at a high risk for influenza exposure, which can be fatal to vulnerable patients; (ii) numerous medical organizations support mandatory influenza vaccination for health care workers; and (iii) the medical evidence in the record demonstrated that a vaccination is the single most effective way to prevent the transmission of the flu.

While the hospital’s policy in Robinson only covered patient-facing employees, health care employers with flu vaccination policies impacting all employees should be aware that they will be subject to heightened scrutiny by regulators such as the EEOC. For instance, in EEOC v. Baystate Medical Inc., Civ. No. 3:16-cv-30086 (D. Mass. June 2, 2016), Baystate’s policy required employees who refused the flu vaccination to wear a surgical mask at all times while working at the hospital’s facilities. The employee in question worked in human resources, had no patient contact, and argued that it was not reasonable for her to wear the mask because people complained that they could not understand what she was saying. Following several occasions in which the employee pulled the mask down away from her mouth so that people could understand her, the plaintiff was discharged for violating Baystate’s policy. While the facts have yet to be developed, these allegations were sufficient to prompt the EEOC to file suit.

Other courts addressing religious discrimination claims in this context also have indicated the importance of the employee’s interaction with patients in determining whether and to what extent a mandatory vaccination policy may be enforced. In Chenzira v. Cincinnati Children’s Hosp. Med. Ctr., Civ. No. 1:11-cv-00917 (S.D. Ohio Dec. 27, 2012), the plaintiff-employee alleged that her adherence to veganism prohibited her from receiving a flu shot. On a motion to dismiss, the court allowed a religious discrimination claim to proceed, finding that the plaintiff could subscribe to veganism with a sincerity equating to that of sincerely held religious views. Notably, the court made a point of stating that the decision did not address the safety of patients at the hospital, which was the hospital’s presumed justification for terminating the plaintiff. The court signaled that it would consider this justification in light of what, if any, contact the plaintiff had with patients, and/or what sort of risk her refusal to receive a vaccination could pose in the context of her employment. (The case later settled.)

Employers looking for additional guidance as to whether and to what extent they must accommodate an employee’s refusal be vaccinated against seasonal influenza also should look to any state or local laws that may impact their ability to mandate flu vaccinations. For instance, a New York statute requires people to be vaccinated if they are affiliated with or employed by a health care facility and who engage in activities that could potentially expose patients to influenza.[2] Those who decline the flu shot during flu season must wear a surgical mask while in areas where patients are normally present. The statute also requires health care facilities to supply such masks to personnel free of charge.

Takeaways

Particularly given the implications to patient safety, health care employers are well within their rights to implement a mandatory flu vaccination policy. Nonetheless, employers should be prepared to address requests for reasonable accommodation made by employees who decline a vaccination because of sincerely held religious beliefs. In those circumstances, employers should engage in the interactive process, with the following considerations in mind:

  • Consider the nature of the employee’s position, as you may have more difficulty in enforcing the policy against employees who do not routinely interact with patients. Courts are more likely to require an alternative accommodation for employees in non-patient-facing roles.
  • Determine whether the employee can be accommodated by wearing a surgical mask or by temporarily or permanently transferring that employee to another position that does not implicate patient safety.
  • Ensure that any refusal to be vaccinated originates from a sincerely held religious belief, but be aware that challenges to a sincerely held belief have been heavily scrutinized by the courts.

A version of this article originally appeared in the Take 5 newsletter Five Key Issues Impacting Health Care Employers.”

[1] EEOC v. St. Vincent Health Ctr., No. 16-224 (W.D. Pa. Sept. 22, 2016); EEOC v. Baystate Med. Ctr., Inc., No. 3:16-cv-30086 (D. Mass. June 6, 2016); EEOC v. Mission Hosp., Inc., No. 1:16-CV-00118 (W.D.N.C. Apr. 28, 2016).

[2] New York State Sanitary Code, 10 N.Y.C.R.R. § 2.59.

In May 2016, the U.S. Department of Health and Human Services (“HHS”) published a final rule implementing Section 1557 of the ACA. Section 1557 prohibits discrimination in the health programs and activities of “Covered Entities” on the basis of race, color, national origin, sex, age, or disability. Section 1557 also imposes detailed and specific notice and disclosure requirements on Covered Entities, including, among other things, the requirement to provide information about the use of auxiliary aids and services, the adoption of grievance procedures, and access for individuals with limited English proficiency. Covered Entities are also required to include specific nondiscrimination protections in the design of group health plans.

A “Covered Entity” is one that receives “federal financial assistance” for a health program or activity from HHS. If any part of a health program or activity receives federal financial assistance from HHS, then all of that entity’s programs and activities are subject to the nondiscrimination provisions of the final rule.

While the nondiscrimination provisions of the final rule went into effect on July 18, 2016, and “Covered Entities” subject to the final rule were required to comply with the notification and grievance procedures by October 16, 2016, entities are still struggling to determine if they qualify as “Covered Entities” subject to the final rule.

Is it only federal financial assistance from HHS that matters for this determination?

In general, Section 1557 of the ACA applies to all health programs and activities, any part of which receives federal financial assistance from any federal agency. However, the requirements in the final rule specifically apply only to recipients of federal financial assistance from HHS.

What does federal financial assistance include?

“Federal financial assistance” includes Medicare Parts A, C, and D and Medicaid payments, grants, loans, subsidies, contracts of insurance, and other types of assistance. Such assistance also includes premium tax credits and advance payments of premium tax credits and cost-sharing reductions for health insurance coverage purchased through the federal and state Health Insurance Marketplaces.

Importantly, HHS does not consider Medicare Part B payments to be federal financial assistance.

What are some examples of “Covered Entities”?

HHS defines “Covered Entities” that are subject to the final rule to include:

  • every health program or activity that receives HHS funding;
  • every health program or activity administered by HHS, such as the Medicare Part D program; and
  • the Health Insurance Marketplaces and all plans offered by issuers that participate in those marketplaces.

“Covered Entities” may include entities that receive federal financial assistance through their participation in Medicare or Medicaid (e.g., hospitals, nursing facilities, and home health agencies) or through grants or subsidies from HHS agencies (e.g., health clinics, community health centers, and health-related schools), state Medicaid agencies, state public health agencies, health insurance issuers that participate in the Health Insurance Marketplaces, Medicare Advantage plans and Prescription Drug Plan sponsors, and physician practices receiving Medicaid payments or other payments from HHS (e.g., meaningful use incentive payments).

What about entities that do not receive funding directly from HHS?

A wide array of entities that provide health-related services do not receive funding directly from HHS but do receive payment for their services through other HHS-funded organizations. The “Covered Entity” status for these entities is more complex and must be examined closely.

By definition, a “recipient of federal financial assistance” is an entity to which such funding is extended directly or through another recipient. However, it is important to look to the entity that Congress intended to assist or subsidize with certain funds when determining whether a downstream entity is a recipient of federal financial assistance.

Nonetheless, whether a downstream entity is covered under the final rule remains far from clear, as HHS offers only limited guidance. HHS makes some distinctions in the final rule. For example, an issuer participating in a Health Insurance Marketplace receives federal financial assistance, but a health care provider that contracts with such an issuer does not become a recipient of federal financial assistance by virtue of that contract. Similarly, physicians who contract to provide health services to hospitals or clinics that receive federal financial assistance do not become recipients of federal financial assistance by virtue of those contracts. However, HHS has confirmed that providers that receive reimbursement from a Medicare Advantage plan are subject to the final rule, regardless of whether payments from the plan go directly to the provider or to the patient.

An entity acting as a third-party administrator for an employer’s employee health benefit plan may not be a “Covered Entity” if the entity is legally separate from an issuer that receives federal financial assistance for its insurance plans. Nonetheless, if an issuer that receives federal financial assistance also provides third-party administrator services, the final rule would apply to those third-party administrator services.

As a general rule of thumb, downstream entities contracting with a recipient of federal financial assistance may not qualify as a “Covered Entity” by virtue of the contract alone. Entities unsure of their status should consider whether they are the intended recipient of the federal financial assistance when making this determination. Entities also should be aware that a “Covered Entity” may include provisions regarding compliance with Section 1557’s nondiscrimination requirements in its contracts with downstream entities. Finally, HHS has reserved the right to engage in a case-by-case inquiry to evaluate whether an entity is appropriately subject to Section 1557. A highly fact-specific inquiry should be undertaken to determine if an entity that does not directly receive funding from HHS might still be a “Covered Entity” in the eyes of HHS.

Takeaways

Entities operating a health program or activity should determine the source of funding for any such program or activity. Those programs or activities receiving federal financial assistance are subject to the nondiscrimination requirements of Section 1557, which include providing a notice of nondiscrimination to the public, implementing a grievance procedure, designating a civil rights coordinator, and providing language assistance to limited English proficiency speakers and appropriate accommodations to individuals with disabilities.

Employers sponsoring group health plans should read the following article by our colleagues to determine the extent to which the Section 1557 nondiscrimination rules apply to them.

A version of this article originally appeared in the Take 5 newsletter Five Key Issues Impacting Health Care Employers.”

Marijuana LegalizationWhile the presidential election has attracted extreme attention, marijuana legalization initiatives were on the ballots in nine states on November 8, 2016. Four states – Arkansas, Florida, Montana, and North Dakota – approved measures providing for the medical use of marijuana, and three states – California, Massachusetts, and Nevada – approved initiatives allowing for recreational use.  The results in Maine are still close to call, but, if that measure is approved, it will be the fourth measure permitting recreational use.  Only one state (Arizona) defeated a marijuana legalization initiative.

The following chart summarizes the approved initiatives, including implications for employers:

 

State Permitted Use Employment Implications

 

Arkansas Medical Employers cannot discriminate based on “past or present status as a qualifying patient or designated caregiver,” but do not have a duty to accommodate an employee’s use “in a workplace” or “working under the influence.”

 

California Recreational The law does not impact employer’s rights to maintain a drug-free workplace or to prohibit marijuana use by employees or applicants, require the accommodation of marijuana use “in the workplace,” or prevent employers from complying with state or federal law.

 

Florida Medical No express employment provisions.

 

Maine
(results still pending)
Recreational Employers are not required to accommodate use “in the workplace,” may enforce policies restricting use by employees, but may not refuse to employ someone “solely for that person’s consuming marijuana outside of the . . . employer’s . . . property.”

 

Massachusetts Recreational Employers are not required to accommodate use “in the workplace,” and may implement workplace policies regarding use by employees.

 

Montana Medical Employers are not required to accommodate use “by a registered cardholder, and may enter into contracts prohibiting use “for a debilitating medical condition.” Employees have no cause of action for wrongful termination or discrimination.

 

Nevada Recreational Employers may enforce workplace policies restricting or prohibiting use.

 

North Dakota Medical No express employment provisions.

 

While not all of the approved initiatives contain express employment protections for marijuana users, employers must contend with the apparent tension between enforcing a workplace drug policy and the state legalization of marijuana use. Because marijuana remains a controlled substance under federal law, maintenance of a zero-tolerance drug policy is likely the most prudent course of action.  Furthermore, employers may take note that each court to consider the wrongful termination claims brought by marijuana users under state laws has sided with employers’ rights to enforce drug-free workplace policies.

Nonetheless, as more states pass marijuana-related laws, and as off-duty marijuana users are discharged for positive drug tests, these policies may come under additional scrutiny in those states that do provide express employment protections. Going forward, employers should consistently enforce their drug-free workplace policies, and be prepared to educate employees about the potential consequence of a positive test for marijuana, regardless of state law protections.  Employers, however, should continue to monitor the legal landscape, particularly in those states providing express employment protections to marijuana users, in the event that courts in those jurisdictions require the accommodation of a worker’s off-duty marijuana use and to take adverse job action only when such an employee is impaired on the job.