UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Transcription

1 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 1 of 44 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Equal Employment Opportunity ) Commission, ) ) Plaintiff, ) ) Civil Action No. 14-CV v. ) ) Honeywell International Inc., ) ) Defendant. ) MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF S MOTION FOR TEMPORARY RESTRAINING ORDER AND EXPEDITED PRELIMINARY INJUNCTION Honeywell International Inc. ( Honeywell ) hereby submits this Memorandum of Law in Opposition to Plaintiff s Motion for Temporary Restraining Order and Expedited Preliminary Injunction ( Plaintiff s Motion ). I. INTRODUCTION Preliminary injunctive relief is a drastic and extraordinary remedy that should only be granted in rare cases. This is not one of those cases. The EEOC must prove four elements: 1) irreparable harm; 2) likelihood of success on the merits; 3) that the balance of harm favors an injunction; and 4) that the public interest favors an injunction. As demonstrated below, the EEOC cannot satisfy any of these elements. The claims at issue here involve challenges to a wellness program that Honeywell offers to its employees as part of its group health plan. Honeywell offers its employees the option to participate in a self-insured group health plan The Honeywell High

2 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 2 of 44 Deductible Health Plan ( HDHP ). Employees (and their spouses) who are enrolled and participate in the HDHP can choose to participate in a wellness program. As a sponsor of a self-insured group health plan, Honeywell engages an independent third party actuarial firm to perform an underwriting analysis each year. This analysis examines past claims experience, current and future plan design parameters, and the impact of Honeywell s wellness plan for purposes of estimating future plan costs. This iterative process results in the future design and pricing of the Honeywell plan (including the operation of the wellness program) in order to establish the anticipated cost of the plan for the following year. The Honeywell wellness program includes free biometric screening, which captures basic health information, including blood pressure, HDL cholesterol level, total cholesterol level, glucose level, height, weight, waist circumference, and nicotine level. 1 An independent health management company (i) receives each participant s individualized results, (ii) informs participants of their individual health status and risks, and (iii) provides information on improving those health risks, which should result in improved health and decreased healthcare costs. Honeywell does not have access to, and is not provided with, any individual results from the biometric screenings. The underlying charges for which the EEOC seeks immediate injunctive relief challenge the surcharges for employees who choose not to participate in Honeywell s wellness program. The EEOC, on behalf of three complainants (out of Honeywell s tens 1 It does not entail a broad health questionnaire or any questions related to an employee s family medical history. 2

3 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 3 of 44 of thousands of employees), in essence contends that Honeywell s wellness program violates the Americans with Disabilities Act ( ADA ) because it has been structured as a monthly surcharge assessed on non-participants rather than a monthly incentive given to participants. The EEOC further contends that Honeywell s program relating to biometric screening for spouses violates the Genetic Information Nondiscrimination Act ( GINA ). As shown below, the EEOC s positions are without merit and there is certainly no basis for emergency injunctive relief. First, the EEOC has failed to make any showing of the existence of irreparable harm in the absence of an immediate injunction. Astonishingly, all of the charging parties on whose behalf the EEOC seeks an injunction have already taken the very biometric screening for 2015 about which the EEOC is objecting. Moreover, each of the charging parties similarly chose to take the screening last year, even though there was no associated surcharge in 2014 for failing to participate. Thus, there is absolutely no need for emergency injunctive relief on behalf of the charging parties. Moreover, contrary to the EEOC s characterization that Honeywell requires its employees to do biometric screening, there is no such requirement. Employees are not required to do the biometric screening to obtain health coverage, nor can any employee be disciplined or terminated for not participating. In reality, the only thing the EEOC is challenging are surcharges that will be imposed, starting in January of 2015, on employees who choose not to participate in the wellness program under the HDHP (i.e., non-participants in the wellness program will pay more for their health coverage). Thus, for any individual who decides he/she does not want to do biometric screening (which does not include the 3

4 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 4 of 44 charging parties), the only potential harm is the monetary surcharge, which is a monthly pre-tax wage deduction that does not even commence until January Even if the EEOC ultimately prevails, which it will not, a monetary award can fully refund any surcharges that are paid. With a clear and adequate remedy at law, there is no argument in support of irreparable harm in this case. Second, the EEOC does not have a substantial likelihood of prevailing on the merits. A wellness program (including with surcharges) that is part of a group health plan, just like Honeywell s program, is lawful under the ADA insurance safe harbor provision. The EEOC s argument that Honeywell does not engage in underwriting or risk classification activity and is not covered by the safe harbor provision is factually wrong and ignores clear persuasive authority. In addition, under an alternative provision of the ADA, Honeywell s wellness program is permissible because it is in fact voluntary. More than 30,000 employees/spouses (53% of those eligible) have already chosen to participate in the wellness program as constructed. Encouraging employees to participate through economic incentives (surcharges or otherwise) does not make the wellness program involuntary. Any employee can choose not to participate in the wellness program and all they have to do is pay more for their health care coverage. Contrary to the EEOC s contention that the financial surcharges are too high, in fact, they are well within the limits established and endorsed as acceptable by the Affordable Care Act ( ACA ) and the Health Insurance Portability and Accountability Act ( HIPAA ). Finally, the EEOC s argument that Honeywell s wellness program violates GINA is frivolous. It is clear under GINA that a biometric screening, like the one here, does not 4

5 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 5 of 44 constitute a genetic test and does not reveal any genetic information about an employee and therefore, is not in violation of the statute. Third, the balance of harm caused by injunctive relief weighs heavily against granting such an extraordinary remedy. Honeywell and its employees face substantial harm. Honeywell would be required to rewrite its 2015 benefit plan that was developed over a long period of time on an emergency basis. If employees are now told that there will be no surcharges and they therefore choose not do the biometric screening, such employees will not have the ability to make a different health plan choice during 2015 and will incur the surcharges if Honeywell later prevails. In other words, employees will be deprived of the ability to make an accurate, fully-informed economic choice. In addition, if Honeywell is required to fund HSA accounts for employees who refuse to participate in the wellness program, as the EEOC demands, Honeywell will almost certainly not be able to recoup the HSA funds if Honeywell later prevails. In contrast, if employees choose not to do the screening now and the EEOC later prevails, they simply can be reimbursed by Honeywell for any surcharges that they incur and be provided any HSA contributions they did not receive during the months before a decision on the merits. Finally, if the expected biometric surcharges cannot be collected as planned, the cost for coverage for all employees would rise to make up the difference, thereby causing direct harm to the tens of thousands of Honeywell employees who choose to live a healthier lifestyle. Lastly, the EEOC s argument that the public interest favors an injunction to further the purposes of the ADA and GINA is equally without merit. Contrary to the 5

6 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 6 of 44 concerns underlying the ADA, here, Honeywell does not have access to any individual results of the biometric screenings. There is absolutely no basis to assert that emergency injunctive relief is needed to protect employees from any of the harms designed to be protected by the ADA or GINA. In contrast, other federal statutes like HIPAA and the ACA both encourage and endorse steps to incentivize employees to engage in wellness programs and in healthy behaviors, and Honeywell s incentives are well within the ranges identified in those statutes as encouraged and permissible. Finally, and most perversely, the EEOC s requested relief would likely only cause employees not to engage in biometric screening, and it is simply not in the public interest to discourage employees from learning about their health status and about ways to improve their health. For all of these reasons, Plaintiff s Motion for Temporary Restraining Order and Expedited Preliminary Injunction should be denied. II. FACTUAL BACKGROUND A. The Honeywell High Deductible Health Plan ( HDHP ) And Wellness Program. Honeywell offers its employees and their families health insurance coverage through a self-insured group health plan called the HDHP. Gregg Decl. 3. As part of that plan, Honeywell offers a wellness program, which is designed to assist Honeywell s employees and their spouses 2 with understanding and improving their health and wellness. Id. 8. Only employees and their spouses who participate in the HDHP are eligible to participate in the HDHP s wellness program. Id. The overarching purpose of 2 As used herein, the term spouse refers to spouses and domestic partners. 6

7 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 7 of 44 the wellness program is to inform HDHP participants about their health status, to provide them with important information that they can use in managing and improving their health, and ultimately to reduce claims costs under the HDHP. Id. 17. In connection with the HDHP open enrollment process for obtaining health insurance coverage under the HDHP, employees and their spouses are given the option to participate in the wellness program. Id. 9. Participation is purely voluntary. Id. Employees and their spouses are eligible for health insurance coverage regardless of whether they choose to participate in the wellness program. Id. Employees are not subject to any discipline or termination if they choose not to participate. Id. B. Biometric Screening Under The HDHP. Employees and spouses who choose to participate in the HDHP wellness program agree to participate in a biometric screening. Id. 10. Each employee and spouse independently decides whether or not to participate in the biometric screening. Id. For those who choose to participate in the biometric screening, each employee and spouse is provided with a separate log-in and password to enable them to view only their own results (i.e., not their spouse s results). Id. The biometric screening collects basic information about the employee s or spouse s blood pressure, HDL cholesterol level, total cholesterol level, glucose level, height, weight, waist circumference, and nicotine level. Id. 11. The Honeywell wellness program does not include a health questionnaire, and it does not request any personal or family medical history from employees or spouses. Id

8 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 8 of 44 The biometric screening can be completed at Quest Diagnostics ( Quest ) at no charge to the employee or spouse. Id. 13. Quest has approximately 2,000 locations across the country and for the convenience of its employees, Honeywell arranged to have Quest available for on-site screening at many of its locations. Id. Honeywell pays the cost of the biometric screening. Id. 11. Alternatively, employees and spouses who wish to participate in the wellness program can choose to submit a form from their personal physician in the event that they already have attended an annual preventative health visit in 2014 that included biometric screening. Id. 14. In addition, employees and spouses who are unable to obtain a biometric screening, for example due to pregnancy or other medical condition, may request a waiver from participating in biometric screening. Id. 15. Quest transmits the biometric screening results to an independent health management company that administers Honeywell s wellness program. Id. 16. These results are kept in the strictest confidence by the independent health management company, and Honeywell does not receive any of the individual results of its employees and their spouses screenings (e.g., HDL levels, blood pressure numbers, etc.). Id. Each employee and spouse independently receives, in writing, their own biometric screening results describing the health risks (if any) identified by the screening and, if applicable, providing general information regarding reducing those health risks, which they can then discuss with their personal physician. Id

9 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 9 of 44 C. Incentives For Participation In The HDHP Wellness Program. As noted above, participation in the HDHP wellness program is purely voluntary. Honeywell employees are not subject to any discipline or loss of coverage for choosing not to participate in biometric screening. Id. 21. Honeywell offers its employees who participate in the HDHP financial incentives to encourage them to participate in the wellness program. Id. 19. Employees who choose to participate and whose annual base salary is less than $100,000 receive a company-provided Health Savings Account ( HSA ) contribution ranging from $250 to $1, Id. In addition, employees who choose to participate in the wellness program pay a smaller employee contribution for HDHP coverage than those who choose not to participate. Id. 20. A $500 biometric surcharge is added to the annual health insurance contribution of employees who choose not to participate in biometric screening. Id. On a monthly basis, the surcharge amounts to a modest pre-tax monthly deduction from their pay in an amount approximately equal to $ Id. Employees are not assessed a surcharge with respect to spouses covered under the HDHP who choose not to participate in the biometric screening. Id. Biometric screening is not new at Honeywell. Id. 22. This is the third year Honeywell has offered employees the option of participating in biometric screening in connection with the HDHP. Id. All three complainants chose to participate in biometric screening in 2013 in connection with the 2014 HDHP, which was the first year their 3 A HSA is a tax-exempt account used to pay or reimburse certain medical expenses of employees and family members. See Internal Revenue Service, Publ n 969, available at 9

10 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 10 of 44 business unit participated in the HDHP. Id. However, many other Honeywell employees choose not to participate in biometric screening. Id. 23. In 2013, for example, approximately 23% chose not to participate in biometric screening. Id. 4 Employees and spouses have had the opportunity to complete biometric screening for the 2015 HDHP s wellness program since August 12, Id. 35; Exhibit 1. More than 30,000 employees and spouses already have chosen to participate in the 2015 HDHP wellness program s biometric screening. Id. 38. This is equal to approximately 53% of the total number of employees and spouses who are anticipated to enroll in the 2015 HDHP. Id. Employees who choose not to participate in the 2015 HDHP wellness program will not be assessed any surcharge prior to January 1, 2015, the effective date of the 2015 HDHP. Id. 36. All three of the complainants on whose behalf the EEOC seeks an injunction already chose to participate in the wellness program and completed the biometric screening in 2014 for the 2015 HDHP plan year. Id. 33. D. The Tobacco Surcharge. The HDHP rewards non-tobacco users by charging them less for coverage than tobacco users. Id. 24. Like all U.S. employers, Honeywell faces the challenge of improving health related outcomes and quality of life for employees, while managing health care costs. Id. 7. It is well-established that tobacco use leads to diseases and causes health care costs to rise. Id. 25. According to the New England Journal of 4 Biometric screening under the 2014 HDHP was identical to the biometric screening under the 2015 HDHP, except there was no nicotine screening in the 2014 HDHP biometric screening. Under the 2014 HDHP, there was no $500 biometric surcharge for employees who chose not to participate in biometric screening, but HSA contributions were offered to employees who participated. Gregg Dec

11 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 11 of 44 Medicine, health care costs for smokers of tobacco at a given age are as much as 40 percent higher than those for non-smokers of tobacco. Id. To help offset those higher costs for Honeywell and employees, Honeywell will charge each employee who participates in the 2015 HDHP $1,000 more in HDHP premiums for each employee and each spouse who is a tobacco user, as compared to those who are not a tobacco user. Id. 26. The tobacco surcharge also is not new. The HDHP charged tobacco users a surcharge in the 2013 and 2014 plan years as well. Id. 27. Tobacco status previously was determined based on self-certification of employees and their spouses regarding whether they used tobacco. Id. Under the 2015 HDHP, employees and spouses who choose to participate in biometric screening and who screen positive for nicotine are presumed to be tobacco users. Id Employees and spouses who choose not to participate in biometric screening also are presumed to be tobacco users. Id. All of the presumed tobacco users can avoid the tobacco surcharge in three ways. First, they can agree to enroll in a tobacco cessation program, at no cost to the tobacco users. See Gregg Decl. 30 & Exhibit B at FAQ The individual need only enroll and participate in the tobacco cessation program. Id. 31. Actual cessation of tobacco use is not required to avoid the tobacco surcharge. Id. Second, they can provide a complete biometric screening report from their personal physician showing that they in fact do not use tobacco. Id. at 30 & Exhibit B at FAQ 27. Third, they can work with a Health Advocate to establish [they] are not a tobacco user... subject to Honeywell s Code of Conduct and Ethics Policy. Id. at 30 & Exhibit B at FAQs In other 11

12 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 12 of 44 words, just like last year, presumed tobacco users can avoid the tobacco surcharge by simply certifying to the Health Advocate that they do not use tobacco, which is what many employees have done this year already. Id. at 30. All three of the complainants (and any covered spouses) certified last year that they are not tobacco users, so none of them should face a tobacco surcharge. Id. at 27. E. The Planning And Development Of The 2015 HDHP. Honeywell has been planning and developing the 2015 HDHP for more than 10 months, since January Id. 46. As an employer that sponsors a self-insured health plan, Honeywell engages an independent third party actuarial firm (staffed with individuals who are members of the Society of Actuaries) to perform an underwriting analysis each year. Id. 44. This analysis examines past claims experience, current and future plan design parameters, and the impact of Honeywell s wellness program in order to estimate future plan costs. Id. This iterative process results in the future design and pricing of the Honeywell health plan (including the operation of the wellness program) in order to establish the anticipated cost of the plan for the following year. Id. 45. This is exactly the same process that the underwriters at an insurance company use to determine the design and premiums for insurance coverage and related wellness programs. Id. Honeywell and the actuarial firm completed this process for the 2015 HDHP in April 2014, and they have been designing and rolling out the 2015 HDHP since that time. Id. 46. The biometric screening has been available for employees to complete since August 12, Id

13 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 13 of 44 F. The Complainants. Keenan Hall, Sueann Schwartz and Thomas Aguirre are current Honeywell employees who recently filed Charges with the EEOC claiming that the wellness program component of Honeywell s 2015 HDHP violates the ADA and GINA. In connection with participating in the HDHP and wellness program, Mr. Hall, Ms. Schwartz and Mr. Aguirre have already participated in biometric screening this year for the 2015 HDHP and they all did the biometric screening last year as well. Id. 22, 33. Neither Mr. Hall nor Ms. Schwartz has a covered spouse under the HDHP. Id. 32. Mr. Hall dropped his spouse from coverage on October 7, Id. Although Mr. Hall and the EEOC now assert that he did so because his spouse refused to participate in biometric screening, he previously represented to Honeywell that he was dropping his spouse from coverage because her work hours had increased and she had become eligible for health insurance coverage through her employer. Id. Mr. Aguirre has a covered spouse who already has completed biometric screening for the 2015 HDHP. Id. Thus, none of the charging parties are subject to any surcharge for lack of participation and all of them will receive HSA contributions for participating in the biometric screening. Id. 33. III. ARGUMENT A. The EEOC Must Satisfy All Requirements For Obtaining A Temporary Restraining Order. A temporary restraining order is a drastic and extraordinary remedy that is not to be routinely granted. Travel Tags, Inc. v. UV Color, Inc., 690 F. Supp. 2d 785, 797 (D. 13

14 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 14 of 44 Minn. 2010); accord Life Time Fitness, Inc. v. DeCelles, 854 F. Supp. 2d 690, 694 (D. Minn. 2012) (same). A temporary restraining order is appropriate only if the moving party can demonstrate: (1) a likelihood of success on the merits (2) irreparable harm in the absence of injunctive relief; (3) that the balance of harm favors the movant; and (4) that the public interest favors the movant. Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981). The Court must balance these factors to determine whether the temporary restraining order is warranted. Id. at 113. Plaintiffs bear the burden of proving all four factors. See Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003). In all cases, a showing of irreparable harm is required in order to obtain a temporary restraining order. General Motors Corp. v. Harry Brown s LLC, 563 F.3d 312, 318 (8th Cir. 2009) ( Regardless of the strength of its claim on the merits, a movant... should show a threat of irreparable harm ); United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1183 (8th Cir. 1998) (holding that a failure to demonstrate the threat of irreparable harm is sufficient to deny injunctive relief). It is well-established that the EEOC must prove all of these same elements in order to obtain injunctive relief on behalf of employees. See EEOC v. Target Stores, Inc., No , 1984 WL 1071, at *1-2 (D. Minn. Sept. 21, 1984) (citing EEOC v. Anchor Hocking Corp., 666 F.2d 1073 (6th Cir. 1981)); EEOC v. Work Connection, No , 1986 WL (D. Minn. July 29, 1986) (requiring the EEOC to show irreparable harm in order to obtain temporary restraining order on behalf of employee); see also EEOC v. Astra U.S.A., Inc., 94 F.3d 738, 743, 747 (1st Cir. 1996) (holding that the EEOC 14

15 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 15 of 44 is required to satisfy the traditional requirements for injunctive relief, including irreparable harm). 5 B. There Is No Risk Of Irreparable Harm As There Is A Clear And Adequate Remedy Available If The EEOC Prevails. 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. General Motors, 563 F.3d at 319. The law is clear that irreparable harm does not exist if an employee can be adequately compensated with backpay or monetary damages. See Harris v. U.S., 745 F.2d 535, 536 (8th Cir. 1984) (affirming denial of injunctive relief because plaintiff could be adequately compensated with an award of full backpay at the conclusion of the proceedings, and the absence of a showing of irreparable harm is, in itself, sufficient grounds upon which to deny a preliminary injunction. ); see also Hale v. Wood, 89 F.3d 840, 1996 WL , at *1 (8th Cir. 1996) (unpublished opinion) (affirming denial of injunctive relief on the ground that plaintiff failed to establish a threat of irreparable harm because the injuries he alleged as the basis for his claim for relief wrongfully withheld wages, statutorily inadequate wages, and termination of his work assignment were compensable through his section 1983 claim for money damages. ); Roberts v. Van Buren Pub. Schs., 731 F.2d 523, 526 (8th Cir. 1984) (affirming denial of injunctive relief because backpay would offer a complete remedy ). Courts routinely deny injunctive relief to the EEOC where, like here, the EEOC fails to establish irreparable harm to [itself] or the charging party. Target Stores, See also cases cited infra at

16 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 16 of 44 WL 1071, at *2; Anchor Hocking, 666 F.2d at 1043 (affirming denial of preliminary injunction because the EEOC did not establish irreparable harm to employee or EEOC and rejecting the notion that a statutory violation is irreparable injury per se. ); EEOC v. City of Janesville, 630 F.2d 1254, 1259 (7th Cir. 1980) (reversing trial court s issuance of preliminary injunction sought by the EEOC because irreparable injury does not include loss of income... or financial distress[,] and thus the EEOC failed to sufficiently show irreparable harm in the absence of injunctive relief); EEOC v. Exxon Mobil Corp., No , 2007 WL , at *9 (N.D. Tex. May 30, 2007) (denying the EEOC s application for preliminary injunction because the EEOC has not carried its burden of proving irreparable harm particularly in light of the fact a preliminary injunction is such an extraordinary remedy and that any difference in salary and benefits could be compensated with money. ); EEOC v. Chateau Normandy, Inc., 658 F. Supp. 598 (S.D. Ind. 1987) (where the EEOC sought preliminary injunction enjoining employer from requiring employee to take mandatory pregnancy leave, court denied injunctive relief because the EEOC could not show that employee or the EEOC would suffer any irreparable harm absent injunctive relief); EEOC v. Howard Univ., No , 1983 WL 519 (D.D.C. June 14, 1983) (denying preliminary injunction in part because the EEOC failed to establish irreparable harm to the employee or EEOC); EEOC v. Bay Shipbuilding Corp., 480 F. Supp. 925 (E.D. Wis. 1979) (denying the EEOC s motion for preliminary injunction because EEOC failed to show any irreparable harm). Even in more severe cases where the EEOC has alleged that an employer unlawfully terminated an employee, courts have held that irreparable harm does not exist 16

17 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 17 of 44 because damages can fully compensate the employee for his or her harm at the conclusion of the litigation. EEOC v. Anchor Hocking Corp., No. C , 1980 WL 18649, at *2 (S.D. Ohio Apr. 7, 1980), aff d, 666 F.2d 1037 (6th Cir. 1981) (citing Sampson v. Murray, 415 U.S. 61, 90 (1974) (holding that temporary loss of income, ultimately to be recovered, does not usually constitute irreparable injury. )). In Anchor Hocking, the EEOC alleged that the employer discharged an employee in retaliation for his participation in EEOC charges filed by his coworkers F.2d at The EEOC sought a preliminary injunction requiring the employer to reinstate the employee during the pendency of the trial. Id. The Sixth Circuit affirmed the district court s order denying the EEOC any preliminary injunctive relief, holding that the statutory remedies of reinstatement and back pay will adequately redress his injury if his retaliation claim is successful. Id. at 1044; see also Bay Shipbuilding, 480 F. Supp. at 928 (the EEOC failed to establish irreparable harm to employee because mere sudden loss of employment is insufficient under Supreme Court precedent); EEOC v. Dravo Corp., No , 1984 WL 1144, at *1 (W.D. Pa. July 12, 1984) (denying the EEOC preliminary injunctive relief because the Court does not find that the loss of wages through suspension or discharge constitutes such irreparable harm as justifies the granting of a preliminary injunction and thus we find that as a private plaintiff the two complainants here do not suffer irreparable harm pending the outcome of the matter. ). This case too is about nothing more than money. All three of the charging parties have already taken the biometric screening and chosen to participate in the wellness program, just as each of them did the year before. Gregg Decl. 22, 33. Moreover, 17

18 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 18 of 44 Honeywell employees who object to biometric screening can choose not to participate. The only consequence will be a $500 annual surcharge on their 2015 HDHP employee contribution, which they will pay in $41.67 monthly installments in Employees could also be subject to the tobacco user surcharge (just like last year) as a presumed tobacco user at approximately $83.34 per month, but they can take steps outside the biometric screening process to avoid that surcharge. There is no risk that any employee will lose his or her job or his or her health coverage. If the EEOC ultimately prevails in challenging the biometric screening in this action (which it should not), a damages award of $500 or $1,500 will fully compensate employees. Accordingly, this is a pure damages case, and the EEOC cannot establish irreparable harm warranting a temporary restraining order. The EEOC s argument that employees feel pressure to participate in biometric screening and will ultimately participate in biometric screening against their wishes because of the biometric surcharge is purely speculative and is not an adequate basis for injunctive relief. The EEOC utterly fails to explain how the free, limited biometric screening offered to Honeywell employees could cause any harm, let alone irreparable harm, to an employee or spouse who chooses to do it. The purpose of the biometric screening is to educate employees and their spouses, improve their health, and reduce their healthcare costs, all of which benefit employees and their spouses rather than causing them any harm. Indeed, the EEOC approves of biometric screening so long as it is voluntary (under their unsupported definition), which further confirms that participating in biometric screening is not in any way inherently harmful. Again, all three 18

19 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 19 of 44 of the charging parties have already completed their biometric screening for this year and all three did it last year even when there was no extra surcharge for failing to participate. Gregg Decl. 22, 33. There is simply no basis to assert that the charging parties would suffer irreparable harm in the absence of an injunction. Additionally, the law is clear that [i]njunctive relief is not appropriate when the harm is merely speculative or based on a mere assumption of possible results. Aune v. Ludeman, No , 2009 WL , at *4 (D. Minn. June 3, 2009). The EEOC offers mere speculation and no proof that employees are forced (have no reasonable alternative) to complete the biometric screening because of the surcharges. The factual record reveals that the alleged economic pressure is pure fiction. Employees and spouses have had the opportunity to complete biometric screening for the 2015 HDHP s wellness program since August 12, 2014, and only half of the total number of employees and spouses who are anticipated to enroll in the 2015 HDHP have chosen to complete the screening to date. Gregg Decl. 35, 38. This fact plainly refutes the EEOC s speculative assertion that the biometric surcharge is causing immediate pressure warranting a temporary restraining order. Moreover, 77% of all employees/spouses last year signed up for biometric screening when there were no surcharges, which belies any notion that individuals do not want to do biometric screening. Id. 23. The EEOC s assertion that, based on the surcharges, employees have no possible choice but to sign up for the biometric screening (i.e., the Honeywell coverage is not affordable if they incurred the surcharges) is completely contrary to the standards set forth in the ACA as to what constitutes affordable care. The EEOC does not articulate 19

20 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 20 of 44 any standard for what amount of a surcharge would purportedly make biometric screening involuntary. Under the EEOC s argument, even a $50 annual surcharge would transform a voluntary biometric screening into involuntary biometric screening. This position lacks any reasoned basis. The Court should instead follow the ACA, in which Congress has supplied a reasoned and appropriate standard for determining whether a surcharge is affordable (and thus voluntary) or unaffordable (and thus involuntary). The ACA defines affordable care as any cost up to 9.5% of an employee s adjusted gross income. 6 With or without all applicable surcharges, the cost of healthcare coverage for Honeywell employees falls below the 9.5% threshold. Gregg Decl. 21. None of the three charging parties would have had to pay even close to the 9.5% threshold had they chosen not to participate in the wellness program. Id. Thus, as a matter of law, the charging parties (and for that matter, all Honeywell employees) were/are offered affordable healthcare even if all applicable surcharges for not participating in the wellness program are included. Id. Thus, the HDHP meets Congress definition of affordable and there is no viable argument that due to the coverage cost (with applicable surcharges) employees have no reasonable alternative but to do the biometric screening. To the extent the EEOC argues that it will suffer irreparable harm absent injunctive relief, there is no basis in the law for the EEOC s assertion. In order to obtain injunctive relief based on harm to the EEOC, the EEOC must show that without 6 See Internal Revenue Code 36B(c)(2)(C)(i); Internal Revenue Code Regulations H-5(e). 20

21 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 21 of 44 injunctive relief, its ability to investigate the charging parties charges will be impeded. Anchor Hocking, 1980 WL 18649, at *2 (denying injunctive relief because [w]ith regard to the EEOC, there must be a showing that [the defendant] has impeded its investigative functions. This showing has not been made. ). The EEOC cannot make this showing where the Commission has only barely begun its investigation and, consequently, is in no position to gauge to what extent, if any, its investigation will be impaired. Id. (quoting Bay Shipbuilding, 480 F. Supp. at 928). As the Anchor Hocking court explained, it generally is the EEOC s responsibility to investigate and adjudicate charges of discrimination in the first instance, before any judicial ruling. Absent actual, threatened irreparable harm to a charging party, the sole basis for allowing the EEOC to obtain injunctive relief is to assur[e] that the Commission is able to carry on its investigation unfettered by interference from the defendant. Id. Where no such interference is shown, alleged harm to the EEOC is not a valid basis to obtain injunctive relief. Id.; accord Bay Shipbuilding, 480 F. Supp. at 928; see also EEOC. v. Howard Univ., No , 1983 WL 519, at *4 (D.D.C. June 14, 1983) (holding that the EEOC failed to show irreparable harm where, although the EEOC encountered reluctance on the part of potential witnesses, it had not yet resorted to the use of the full panoply of its powers to issue administrative subpoenas or initiate an investigation). Here, the EEOC has not even alleged or argued that its investigation has been or will be impeded by Honeywell. Quite to the contrary, Honeywell expeditiously responded to the first two charges provided by the EEOC and submitted a detailed position statement on the issues in this case within six days of being notified by the 21

22 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 22 of 44 EEOC. See Exhibit 1, Oct. 22, 2014 Ltr. from M. Burkhardt to J. Rowe (attachments omitted). The EEOC instead makes the vague and ambiguous argument that its ability to enforce the Acts, including by preventing discrimination from occurring, will be irreparably harmed. There is no basis in the law or facts to support such an argument. Accordingly, the EEOC has not demonstrated and cannot demonstrate any irreparable harm, and on this basis alone, Plaintiff s Motion for Temporary Restraining Order and Expedited Preliminary Injunction should be denied. General Motors, 563 F.3d at 318 (a showing of irreparable always should be required before granting injunctive relief); United Indus. Corp., 140 F.3d at 1183 (failure to demonstrate irreparable harm is sufficient to deny injunctive relief). C. The EEOC Is Not Likely To Prevail On The Merits. To obtain a temporary restraining order, a movant also must establish a likelihood of success on the merits. See Barrett v. Claycomb, 705 F.3d 315, 320 (8th Cir. 2013) (vacating preliminary injunction because the absence of a likelihood of success on the merits strongly suggests that preliminary injunctive relief should be denied. ) (quoting CDI Energy Servs., Inc. v. West River Pumps, Inc., 567 F.3d 398, 402 (8th Cir. 2009) (affirming denial of injunctive relief because the movant failed to meet his burden to prove likelihood of success on the merits )). Here, Plaintiff cannot demonstrate the necessary likelihood of success on the merits, because, as shown below, Honeywell s wellness program fully complies with all applicable federal laws, including the ADA and GINA. 22

23 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 23 of The HDHP Wellness Program Complies With The ADA Under The Insurance Safe Harbor. Although Subchapter I of the ADA generally prohibits employers from requiring employees to undergo medical examinations unless they are job-related and consistent with business necessity, 42 U.S.C (d)(4)(A), that prohibition does not apply to medical examinations conducted in accordance with the ADA s insurance safe harbor provision. This safe harbor provision states that the prohibitions in Subchapters I through III and Title IV of the ADA shall not be construed to prohibit or restrict covered entities from 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. 42 U.S.C (c)(2). The purpose of the safe harbor provision is to permit the development and administration of benefit plans in accordance with accepted principles of risk assessment. Barnes v. Benham Grp., Inc., 22 F. Supp. 2d 1013, 1020 (D. Minn. 1998). Honeywell s wellness program is clearly covered under the ADA s insurance safe harbor provision. The wellness program is offered as part of a bona fide benefit plan, the HDHP, and, therefore, is permissible under the safe harbor provision. In a case directly on point, the Eleventh Circuit Court of Appeals recently upheld an employer wellness program that, like here, was offered as part of a group health plan. See Seff v. Broward County, 691 F.3d 1221, 1223 (11th Cir. 2012). In Seff, an employee challenged a similar wellness program. Employees who participated in the employer s group health plan were invited to participate in the 23

24 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 24 of 44 wellness program by completing a health risk assessment and participating in biometric screening. Id. at Employees who declined to participate in the wellness program were assessed a $20 bi-weekly surcharge (i.e., $40 per month). Id. The Eleventh Circuit held that this wellness program fell within the ADA insurance safe harbor provision and affirmed summary judgment for the employer. Id. at Like the wellness program in Seff, Honeywell s wellness program satisfies all of the insurance safe harbor requirements and is therefore valid. In Seff, the court held that the employer s wellness program was a term of its group health plan because (i) the wellness program was sponsored as part of the contract to provide the employer with a group health plan; (ii) the program was offered to group health plan enrollees; and (iii) the employer presented the program as part of its group health plan in at least two employee handouts. Seff, 691 F.3d at The court held that these facts established that the wellness program was a term of the group health plan even though the group health plan s summary plan documents did not discuss the wellness program. Id. Here, the facts even more clearly establish that the Honeywell wellness program is a term of Honeywell s HDHP group health plan. Only employees and their spouses who participate in the HDHP are eligible to participate in the HDHP s wellness program. See Gregg Decl. 8. The wellness program is offered to HDHP participants in connection with the HDHP s open enrollment process. Id. 9. Moreover, the Summary Plan Description for the HDHP clearly sets forth all applicable provisions of the wellness program, including the biometric screening option. See Gregg Decl. at Exhibit A, HDHP 24

25 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 25 of 44 Summary Plan Description at It is thus indisputable that Honeywell s wellness program is a term of its HDHP group health plan. Contrary to the EEOC s unsupported argument that Honeywell does not engage in underwriting activity, in reality, Honeywell s wellness program is based on underwriting risks, classifying risks, or administering such risks. 42 U.S.C (c)(2). Risk classification means the process of collecting information about the health of the insured in order to assess risks so the insurer may accurately establish premiums in other words: the process of developing insurance plans. Seff v. Broward County, 778 F. Supp. 2d 1370, 1373 (S.D. Fla. 2011), aff d 691 F.3d 1221 (11th Cir. 2012). In Seff, for example, a health risk assessment and biometric screening were used to identify individuals with certain health risks, and those employees received the opportunity to participate in a disease management program that helped them to manage their health risks. 691 F.3d at The Eleventh Circuit Court of Appeals affirmed the district court s holding that the classification and management of these health risks was sufficient to satisfy this element. Id. The district court s detailed underlying reasoning is directly applicable here: The wellness program... [wa]s designed to develop and administer present and future benefits plans using accepted principles of risk assessment. The program renders aggregate data to the [employer] that it may analyze when developing future benefit plans. The [employer] uses this information to classify various risks and decide what type of benefits plans will be needed in the future in light of these risks. The County is thus determining what kind of coverage will need to be provided. Though it is not underwriting or classifying risks on an individual basis, it is underwriting and classifying 25

26 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 26 of 44 risks on a macroscopic level so it may form economically sound benefits plans for the future. Furthermore, the wellness program is an initiative designed to mitigate risks. It is based on the theory that encouraging employees to get involved in their own healthcare leads to a more healthy population that costs less to insure. In other words, the program is based on underwriting, classifying, and administering risks because its ultimate goal is to sponsor insurance plans that maintain or lower its participant's premiums. Seff, 778 F. Supp. 2d at The EEOC does not dispute that this case is on all fours with Seff; it simply argues that the Seff court reached the wrong result. However, just like in Seff, the biometric screening results here are used to identify and assess health risks, to provide employees and their spouses with resources to manage and reduce health risks, and ultimately to reduce claims costs after the wellness program successfully reduces the health risks. See Gregg Decl , 41. In addition, the aggregate biometric screening results are used by Honeywell and an independent third party actuarial firm during its annual underwriting process to estimate future plan design, pricing, and costs. Id This is exactly the same process that the underwriters at an insurance company use to determine the design and premiums for insurance coverage and related wellness programs, and it is precisely how the employer in Seff used its wellness program information in underwriting and risk classification. Id. 45. In addition, with respect to tobacco use in particular, grouping tobacco users together under an adjusted premium to account for the well-established, increased health risks and costs of tobacco use is clearly part of underwriting risks, classifying risks or administering such risks. Id

27 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 27 of 44 Accordingly, Honeywell s HDHP and the wellness program that is part of that plan satisfy this safe harbor requirement as well. In addition, a case cited by the EEOC, Barnes v. Benham Grp., Inc., 22 F. Supp. 2d 1013, 1020 (D. Minn. 1998), further supports Honeywell s position. In Barnes, the employer required employees to answer a medical questionnaire, which would then be provided to the insurer for the purpose of assessing risks and calculating premium prices for the company s group healthcare plan. Id. at Employees who refused to participate were not eligible for coverage. Id. The district court held that this process was permissible under the ADA s safe harbor provision, because the questions were part of the routine procedures undertaken by [the insurer] in assessing the risks involved in insuring a group of employees. Such questions are permitted by the ADA. Id. at Importantly, the courts in Seff and Barnes found that the safe harbor provision applies regardless of whether the wellness program is voluntary or not. Seff, 691 F.3d at ; Barnes, 22 F. Supp. 2d at In fact, in Barnes, employees who did not participate in the medical questionnaire were ineligible for coverage under the health plan, and the plaintiff was terminated for refusing to submit the medical questionnaire. Barnes, 22 F. Supp. 2d at Thus, Honeywell is not required to show that its wellness program is voluntary to be covered by the insurance safe harbor provision. Clearly, the EEOC cannot establish it is likely to succeed in this action when the only case law addressing the issue directly contradicts the EEOC s position. 27

28 CASE 0:14-cv ADM-TNL Document 20 Filed 10/30/14 Page 28 of 44 Nonetheless, even if the safe harbor provision did not apply, as demonstrated below, Honeywell s wellness program is voluntary, and is thus also consistent with another provision of the ADA that permits the use of voluntary wellness programs. 2. The HDHP Wellness Program Also Is Permissible Under The ADA s Voluntary Wellness Program Provision. Honeywell s wellness program also is valid under the separate ADA provision that permits employers to request medical examinations in connection with voluntary wellness programs. Under 42 U.S.C (d)(4)(B), employers may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program.... Honeywell s wellness program is voluntary. Merely providing a financial incentive to participate in a program does not transform it into an involuntary program. As noted above, Honeywell employees are not subject to any discipline or loss of coverage for electing not to participate in biometric screening. Gregg Decl. 21. Individuals who choose to participate in Honeywell s program simply pay less than those who choose not to participate. Id. 20. Non-participants pay approximately $42 per month (pre-tax) more than participants (as well as a possible $84 per month tobacco surcharge if they do not take steps to avoid that surcharge). 7 Id. Surcharges applicable to participatory wellness programs (e.g., Honeywell s $500 surcharge related to biometric screenings) are both encouraged and permissible under the 7 All three of the complainants (and any covered spouses) certified last year that they are not tobacco users, so none of them should face a tobacco surcharge. Id. at