By Reema Kapur and Lily M. Strumwasser

Just nine days into the new year the EEOC settled its first systemic lawsuit ever filed alleging genetic discrimination under the Genetic Information Nondiscrimination Act (“GINA”).  Over the past several years the EEOC has trumpeted its focus on high-impact and high-profile cases and the $370,000 settlement of EEOC v. Founders Pavilion Inc., No. 13-CV-06250 (W.D.N.Y. Jan. 9, 2014), is no exception. In the Commission’s press release, it reminded employers that “when illegal questions are required as part of the hiring process, the EEOC will be vigilant in ensuring that no one is denied employment opportunities on a prohibited basis.” This case highlights the EEOC’s focus on the National Priorities laid out in its Strategic Enforcement Plan (“SEP”), including “eliminating barriers in hiring and recruitment” and “emerging and developing issues” such as enforcement of the Genetic Information Nondiscrimination Act (“GINA”).

An Overview Of GINA

GINA prohibits discrimination against applicants and employees on the basis of genetic information. More specifically, it “prohibits the use of genetic information in making employment decisions, restricts employers and other entities covered by the statute from requesting, requiring or purchasing genetic information, and strictly limits the disclosure of genetic information.” Genetic information broadly includes an individual’s genetic tests, family medical history, and the genetic tests of his or her family members. 

EEOC v. Founders Pavilion Inc.

On May 6, 2013, the EEOC filed its first systemic lawsuit alleging violations of GINA in EEOC v. Founders Pavilion Inc. According to the EEOC’s Complaint, Founders Pavilion conducted post-offer, pre-employment medical exams of applicants. As part of the exam, Founders Pavilion allegedly requested applicants provide it with information about their family medical history. The EEOC also claimed Founders Pavilion fired an employee after refusing to provide her with an accommodation in violation of the Americans With Disabilities Act (“ADA”), refused to hire two women because of a perceived disability, and either refused to hire or fired three women because they were pregnant in violation of Title VII.

Ten months after the EEOC filed its Complaint, the parties reached a $370,000 settlement agreement. The settlement fund is divided into two groups: Founders Pavilion will provide $110,400 for distribution to the 138 individuals who it allegedly asked for their genetic information, and Founders Pavilion will pay $259,600 to the five individuals the EEOC claimed were fired or denied employment for alleged violations of the ADA or Title VII. 

Although Founders Pavilion recently sold its facility to another company, if Founders Pavilion resumes conducting business it must abide by several restrictions set out in the settlement agreement. Namely, Founders Pavilion must post notices to employees regarding the lawsuit and consent decree, adopt a new anti-discrimination policy and distribute it to all employees, provide antidiscrimination training to all employees, and provide periodic reports to the EEOC regarding internal complaints of discrimination. The settlement agreement is binding for five years.

Implications For Employers

In 2013, the EEOC filed several – and settled one – lawsuit under GINA.  Founders demonstrates that in 2014 employers can expect the Commission to closely follow the mandate laid out in its SEP and to continue to devote considerable resources to the “Big 6” national priorities. Further, it shows that charges and lawsuits alleging GINA violations often go hand-in-hand with ADA claims. This overlap raises the stakes for employers who may potentially face liability for their employment practices under both laws.

Readers can also find this post on our EEOC Countdown blog here.