Equal Employment Opportunity Commission v. Flambeau, Inc.
2017 U.S. App. LEXIS 1289
7th Cir.2017Background
- Flambeau implemented a wellness program (health questionnaire + biometric testing) and required participation as a condition for receiving employer-subsidized health insurance for 2012–2013.
- Employee Dale Arnold missed the deadline for 2012 testing; Flambeau terminated his coverage and offered COBRA; Arnold did not elect COBRA and his coverage lapsed briefly.
- After complaints to DOL and EEOC, Flambeau agreed to reinstate Arnold’s coverage retroactively once he completed testing and paid premiums; Arnold completed testing and coverage was restored.
- Flambeau discontinued mandatory testing before 2014 for cost-effectiveness reasons; Arnold resigned in March 2014; EEOC filed suit in September 2014 alleging ADA violations (involuntary medical examinations under 42 U.S.C. § 12112(d)(4)).
- The district court granted summary judgment to Flambeau, finding the ADA’s insurance safe-harbor could cover some wellness programs; EEOC appealed; appellate court sua sponte addressed mootness and available relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ADA’s insurance safe-harbor excludes wellness programs from the ban on involuntary medical exams | EEOC: safe-harbor does not apply to wellness programs; mandatory testing violated §12112(d)(4) | Flambeau: safe-harbor §12201(c) covers wellness programs administered as part of benefit plans | Not decided on merits — court declined to resolve statutory question because no live relief was available |
| Whether the testing was voluntary | EEOC: mandatory testing (tied to insurance subsidy) was involuntary | Flambeau: testing was not a condition of employment and thus not involuntary | Not decided on merits — mootness/relief issues precluded ruling |
| Mootness / voluntary cessation — is injunctive relief available? | EEOC: cessation is voluntary; voluntary-cessation exception applies so case not moot | Flambeau: program ended for unrelated cost reasons before suit; no reasonable expectation of resumption | Claim for injunctive relief is moot — voluntary-cessation exception does not apply because Flambeau ended program for unrelated, non-litigation reasons and effects were eradicated |
| Monetary relief (out-of-pocket, emotional distress, punitive) for Arnold | EEOC: Arnold seeks $82.02, emotional distress, and punitive damages | Flambeau: no compensable out-of-pocket loss; emotional distress evidence insufficient; punitive damages unwarranted given unsettled law and defendant’s good-faith reliance on counsel | Monetary relief denied: out-of-pocket not paid, emotional-distress testimony insufficient, punitive damages unavailable given legal uncertainty and lack of reckless indifference |
Key Cases Cited
- Brown v. Bartholomew Consolidated School Corp., 442 F.3d 588 (7th Cir.) (a live controversy must exist at all stages of review)
- Banks v. National Collegiate Athletic Ass'n, 977 F.2d 1081 (7th Cir.) (party must retain personal stake or case is moot)
- Kolstad v. American Dental Ass'n, 527 U.S. 526 (U.S.) (punitive damages require malice or reckless indifference; reliance on unsettled legal theory can preclude punitive damages)
- Seff v. Broward County, 691 F.3d 1221 (11th Cir.) (safe-harbor applied to wellness plan in earlier decision)
- Norman-Bloodsaw v. Lawrence Berkeley Laboratory, 135 F.3d 1260 (9th Cir.) (cessation of conduct does not moot a case absent explanation for change of policy)