Aarp v. United States Equal Employment Opportunity Commission
Civil Action No. 2016-2113
| D.D.C. | Dec 20, 2017Background
- AARP challenged EEOC regulations under the ADA and GINA that allowed employer wellness-plan incentives or penalties up to 30% for providing medical/genetic information (29 C.F.R. §§ 1630.14(d)(3), 1635.8(b)(2)(iii)).
- On Aug 22, 2017, the Court found EEOC failed to provide a reasoned explanation supporting the 30% incentive level and remanded the rules to EEOC but initially declined to vacate them to avoid mid‑plan‑year disruption.
- AARP moved under Rule 59(e) to alter the judgment, asking either vacatur stayed until Jan 1, 2018, or an injunction effective Jan 1, 2018; it later proposed vacatur for plans beginning six months after the order.
- EEOC opposed immediate vacatur citing disruption to employers/employees and indicated a lengthy rulemaking timeline (NPRM not until Aug 2018; final rule not until Oct 2019 and effective likely by 2021).
- The Court reconsidered remedies, applying the Allied‑Signal vacatur test (seriousness of agency’s deficiencies vs. disruptive consequences) and weighed prejudice to AARP members if rules remained.
- Court granted AARP’s motion: it vacated the 30% incentive portions of the ADA and GINA rules but stayed the vacatur’s effective date until Jan 1, 2019, and urged EEOC to accelerate rulemaking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court should vacate EEOC’s 30%‑incentive rule given agency’s lack of reasoned explanation | AARP: Vacatur is the normal remedy under APA; remand without vacatur continues harm to members | EEOC: Vacatur causes widespread disruption to employers/employees if imposed before plan year | Court: Vacatur warranted due to serious reasoning defects, but vacatur stayed until Jan 1, 2019 to avoid disruption |
| Whether reconsideration via Rule 59(e) is appropriate to revisit remedy | AARP: Rule 59(e) motion should be allowed to address remedy; remand without vacatur is unjust | EEOC: AARP could have sought vacatur earlier; relief now is prejudicial | Court: Even under Rule 59(e) standards, reconsideration is appropriate given briefing and evolving facts |
| Proper remedial balancing test to apply | AARP: Allied‑Signal balancing favors vacatur once sufficient lead time exists | EEOC: Disruptive consequences outweigh benefits of vacatur near plan year | Court: Applied Allied‑Signal; serious agency error + ability to avoid disruption by delaying vacatur favors vacatur effective 1/1/2019 |
| Timing and scope of relief (prospective application to plans) | AARP: Vacatur effective for plans starting ≥6 months after order or Jan 2018 | EEOC: Needs ~6–12 months; earlier vacatur too disruptive | Court: Chose calendar approach: vacatur effective Jan 1, 2019 to give all employers ~12 months and accommodate non‑calendar plans |
Key Cases Cited
- Ciralsky v. CIA, 355 F.3d 661 (D.C. Cir.) (standard for Rule 59(e) motions and reconsideration)
- Allied‑Signal, Inc. v. U.S. Nuclear Reg. Comm’n, 988 F.2d 146 (D.C. Cir.) (vacatur balancing test: seriousness of deficiency vs. disruptive consequences)
- Advocates for Highway & Auto Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d 1136 (D.C. Cir.) (vacatur normally required when agency action is arbitrary and capricious)
- Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir.) (courts should consider remedial briefing; agencies must respond to contrary empirical evidence)
- Friends of the Earth, Inc. v. EPA, 446 F.3d 140 (D.C. Cir.) (district court has remedial discretion to stay vacatur)
- Int’l Union, United Mine Workers v. Fed. Mine Safety & Health Admin., 920 F.2d 960 (D.C. Cir.) (court may reconsider vacatur if agency does not proceed with reasonable diligence)