On January 13, 2014, the Equal Employment Opportunity Commission (EEOC) announced it had reached a settlement with Founders Pavilion, Inc. (Founders), a former nursing and rehabilitation center located in Corning, New York. In the lawsuit, the EEOC alleged that Founders violated the Genetic Information Nondiscrimination Act (GINA). The lawsuit represented only the third time since GINA was enacted that the EEOC had brought a lawsuit against an employer in which it alleged that an employer violated GINA, and the first lawsuit in which the EEOC alleged that the discrimination was systemic.
In EEOC v. Founders Pavilion, Inc., the EEOC alleged that Founders violated GINA because it conducted post-offer, pre-employment medical exams of applicants, in which it requested a family medical history from the applicants. The EEOC also alleged Founders violated the Americans with Disabilities Act by firing an employee after it refused to accommodate her during the probationary period of her employment, and by firing two women because of perceived disabilities. Further, the EEOC alleged that Founders violated Title VII by firing and/or refusing to hire three women because they were pregnant.
After the lawsuit was filed, Founders ceased operating its business in New York and on or about January 9, 2014, entered into a five-year consent decree in which it agreed to settle the lawsuit. Pursuant to the settlement, Founders agreed to establish a fund of $110,400 for distribution to 138 individuals who were asked to provide their genetic information. Founders also agreed to pay $259,600 to five individuals who the EEOC alleged were fired or whom Founders refused to hire in violation of the ADA and Title VII. In addition, Founders agreed that if it were to resume its business, it must post notices to notify its employees of the lawsuit and consent decree, as well as adopt a new anti-discrimination policy and provide anti-discrimination training to its employees.
While the New York Human Rights Law has prohibited employers from discriminating against an employee on the basis of a predisposing genetic characteristic since 1996, GINA goes a step further and makes it unlawful for an employer to request or require employees to provide their own genetic information or the genetic information of family members. Importantly, GINA and the corresponding regulations broadly define genetic information to include, among other things, genetic tests of the individual or family members and family medical history.
In announcing the Founders settlement, the EEOC expressed its intent to continue pursing alleged violations of GINA against employers. This settlement demonstrates the potential liability that an employer could face in the event that the employer violates a provision of GINA. Since GINA and its regulations are relatively new, it is important for employers to consult with their legal counsel to ensure compliance.