In AT&T Mobility v. Concepcion, the United States Supreme Court held that a business could compel a group of individuals to waive their right to file a class-action lawsuit and instead arbitrate their collective dispute. Employers rejoiced, believing that they finally had the weapon they needed to battle the scourge of wage-and-hour class actions.
The National Labor Relations Board, however, had different ideas.
In its seminal 2012 decision, D.R. Horton Inc., the NLRB held that an arbitration agreement violated the National Labor Relations Act’s protections for employee concerted activity. The facts are pretty straightforward. The employer required all of its employees, as a condition of their employment, to sign a master arbitration agreement, under which they agreed:
To submit all disputes and claims relating to their employment to final and binding arbitration.
That the arbitrator “may hear only … individual claims,” and “does not have authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one arbitration proceeding.”
To waive “the right to file a lawsuit or other civil proceeding relating to … employment with the Company.”
The NLRB concluded that the agreement “unlawfully restricts employees’ Section 7 right to engage in concerted action for mutual aid or protection,” and held that the employer “violated Section 8(a)(1) by requiring employees to waive their right to collectively pursue employment-related claims in all forums, arbitral and judicial.”
In the four years since they decided D.R. Horton, the NLRB has invalidated too many similar arbitration agreements and class-action waivers to count, and further expanded D.R. Horton to make it nearly impossible for any class-action waiver to pass muster. The board has even gone so far as to invalidate agreements that expressly carve out the right for employees to pursue claims with state and federal administrative agencies such as the NLRB.
In the board’s opinion, even those agreements are illegal because rank-and-file employees aren’t lawyers and aren’t capable of reading and understanding the agreement: “Viewed from an employee’s perspective … it would take ‘specialized legal knowledge’ to determine whether employees’ right to file Board charges is permitted or precluded by these caveats.”
On appeal, however, not all federal circuit courts have been kind to D.R. Horton. The 5th Circuit overturned D.R. Horton itself, while other circuits have sided with the NLRB on this important issue.
Now, however, the Supreme Court is poised to have the final say. It has agreed to hear the appeal of three cases, which should put this issue to bed once and for all.
In NLRB v. Murphy Oil USA (5th Cir., holding that the “corporation did not commit unfair labor practices by requiring employees to sign its arbitration agreement or seeking to enforce that agreement in federal district court.”); Lewis v. Epic Systems (7th Cir., holding that an arbitration agreement that “precludes employees from seeking any class, collective, or representative remedies to wage-and-hour disputes” violates the NLRA); and Morris v. Ernst & Young LLP (9th Cir., agreeing with Lewis, holding that “an employer violates the National Labor Relations Act by requiring employees to sign an agreement precluding them from bringing, in any forum, a concerted legal claim regarding wages, hours, and terms and conditions of employment.”), the justices agreed to decide whether agreements to require employees to forgo class actions or collective proceedings, and instead resolve employment disputes via individual arbitration, violate the NLRA.
How the Supreme Court decides this issue is of critical importance to employers. Wage-and-hour class actions are one of the biggest risks that employers face.
The law that governs the payment of minimum wage and overtime in the country, the Fair Labor Standards Act, is more than 70 years old. It shows every bit of its age.
Over time it’s been amended again and again, with regulation upon regulation piled on. What we are left with is an anachronistic maze of rules and regulations in which one would need a Ph.D. in FLSA (if such a thing existed) just to make sense of it all.
Since most employers are experts in running their businesses but not necessarily experts in the ins and outs of the intricacies of the Fair Labor Standards Act, they are fighting a compliance battle they cannot hope to win. And the prize for noncompliance is the cost of defending a class-action lawsuit.
Employers desperately need the Supreme Court to overturn D.R. Horton so that they can recapture a key weapon against the wage-and-hour class actions.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
“Jon, you write a management-side blog. Why are you running a contest to find the worst employer of 2017?”
Because of employers like this one (via Courthouse News):
Plaintiff was diagnosed with kidney cancer and required immediate surgery to remove the tumor. Defendant Slutskaya denied his request for a 10-day leave of absence and told plaintiff she doesn’t “need people with cancer working in her office” and further stated, “this is America and in America you have to work even if you’re sick.” After berating him because of his illness, she finished by informing him that “with your illness [cancer], people die and I cannot keep you as a worker not knowing what is going to happen to you.”
Using the worst employers to teach those who are better intentioned regarding the correct (and legal) way to manage employees is an invaluable tool. I have a strong suspicion that this employer will have a strong showing when we sort out the worst from the really worst at year’s end.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
Yesterday, however, in NLRB v. SW General, Inc. [pdf], the Supreme Court held that Mr. Solomon’s tenure from January 5, 2011, through October 29, 2013, was unlawful, as it violated the Federal Vacancies Reform Act of 1998 (FVRA).
What is the FVRA (besides a statute I had never heard of until yesterday)? It provides the succession plan for certain federal appointments (such as NLRB general counsel), and authorizes the President to override its automatic succession via temporary appointments (as President Obama did when he appointed Mr. Solomon acting general counsel). The FVRA also prohibits someone from serving as an acting officer if the President has nominated that person to fill the vacant office permanently (as President Obama did with Mr. Solomon on January 5, 2011).
The specific question SCOTUS answered in SW General is whether the FVRA equally applies to individuals already serving in that same position (as Mr. Solomon had been since June 2010) at the time of his or her official nomination to fill the vacancy permanently. SCOTUS held that the FVRA’s prohibition applied to Mr. Solomon even though he had already been serving as NLRB acting general counsel at the time of his nomination.
This is all very interesting reading on the inner workings of our federal government, and the power, ability, and willingness of the Supreme Court to check presidential powers (a very important issue about which I predict we will be hearing a lot over the next four years).
The deeper question, however, is what this case means to decisions rendered by the NLRB on complaints authorized by Mr. Solomon during his unlawful tenure as NLRB general counsel. The answer is likely very little. And the key to why it means very little hides in footnote 2 of the opinion:
The FVRA exempts “the General Counsel of the National Labor Relations Board” from the general rule that actions taken in violation of the FVRA are void ab initio. 5 U. S. C. §3348(e)(1). The Court of Appeals “assume[d] that section 3348(e)(1) renders the actions of an improperly serving Acting General Counsel voidable” and rejected the Board’s argument against voiding Solomon’s actions. The Board did not seek certiorari on this issue, so we do not consider it.
In other words, because the NLRB did not appeal the void-versus-voidable issue, SCOTUS did not consider it. And this distinction is huge. If the actions of an improperly serving Acting General Counsel are void, then all Board decisions that flowed from those actions automatically become invalid. Because, however, they are merely voidable, the losing party must do something (i.e., file some sort of court action to vacate the decision) to secure the undoing of the otherwise unlawfully rendered decision. And, because these cases are up to six years old, many, if not most, are going to be closed, and statutes of limitations will foreclose any further action. (I’ll leave to others who have more free time on their hands than me to categorize the voidable cases as “closed” or “subject to further action”.)
Thus, while SW General is intellectually interesting, it will likely have little impact on President Obama’s NLRB legacy, a legacy that President Trump’s NLRB will likely undo over the next four years anyway.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
The EEOC last June issued a comprehensive, bipartisan report on harassment in the workplace. The report’s stated purpose was to “reboot workplace harassment prevention efforts” by focusing on efforts employers can take “in designing effective anti-harassment policies; developing training curricula; implementing complaint, reporting, and investigation procedures; creating an organizational culture in which harassment is not tolerated; ensuring employees are held accountable; and assessing and responding to workplace “risk factors” for harassment.”
One such tool the EEOC provided was a series of four checklist for employers to use to create an effective harassment prevention program.
Leadership and accountability.
Anti-harassment policies.
Harassment reporting systems and investigations.
Compliance training.
At last week’s SHRM Legislative Conference, EEOC Commissioner, and one of the co-chairs of the EEOC Select Task Force on the Study of Harassment in the Workplace, Chai Feldblum, reiterated the importance and usefulness of these checklists. Because the EEOC feels so strongly about the utility of these lists for employers, I’m sharing them in full.
Checklist One: Leadership and Accountability
The first step for creating a holistic harassment prevention program is for the leadership of an organization to establish a culture of respect in which harassment is not tolerated. Check the box if the leadership of your organization has taken the following steps:
Leadership has allocated sufficient resources for a harassment prevention effort
Leadership has allocated sufficient staff time for a harassment prevention effort
Leadership has assessed harassment risk factors and has taken steps to minimize those risks
Based on the commitment of leadership, check the box if your organization has the following components in place:
A harassment prevention policy that is easy-to-understand and that is regularly communicated to all employees
A harassment reporting system that employees know about and is fully resourced and which accepts reports of harassment experienced and harassment observed
Imposition of discipline that is prompt, consistent, and proportionate to the severity of the harassment, if harassment is determined to have occurred
Accountability for mid-level managers and front-line supervisors to prevent and/or respond to workplace harassment
Regular compliance trainings for all employees so they can recognize prohibited forms of conduct and know how to use the reporting system
Regular compliance trainings for mid-level managers and front-line supervisors so they know how to prevent and/or respond to workplace harassment
Bonus points if you can check these boxes:
The organization conducts climate surveys on a regular basis to assess the extent to which harassment is experienced as a problem in the workplace
The organization has implemented metrics for harassment response and prevention in supervisory employees’ performance reviews
The organization conducts workplace civility training and bystander intervention training
The organization has partnered with researchers to evaluate the organization’s holistic workplace harassment prevention effort
Checklist Two: An Anti-Harassment Policy An anti-harassment policy is a key component of a holistic harassment prevention effort. Check the box below if your anti-harassment policy contains the following elements:
An unequivocal statement that harassment based on any protected characteristic will not be tolerated
An easy-to-understand description of prohibited conduct, including examples
A description of a reporting system – available to employees who experience harassment as well as those who observe harassment – that provides multiple avenues to report, in a manner easily accessible to employees
A statement that the reporting system will provide a prompt, thorough, and impartial investigation
A statement that the identity of an individual who submits a report, a witness who provides information regarding a report, and the target of the complaint, will be kept confidential to the extent possible consistent with a thorough and impartial investigation
A statement that any information gathered as part of an investigation will be kept confidential to the extent possible consistent with a thorough and impartial investigation
An assurance that the employer will take immediate and proportionate corrective action if it determines that harassment has occurred
An assurance that an individual who submits a report (either of harassment experienced or observed) or a witness who provides information regarding a report will be protected from retaliation from co-workers and supervisors
A statement that any employee who retaliates against any individual who submits a report or provides information regarding a report will be disciplined appropriately
Is written in clear, simple words, in all languages commonly used by members of the workforce
Checklist Three: A Harassment Reporting System and Investigations
A reporting system that allows employees to file a report of harassment they have experienced or observed, and a process for undertaking investigations, are essential components of a holistic harassment prevention effort. Check the box below if your anti-harassment effort contains the following elements:
A fully-resourced reporting process that allows the organization to respond promptly and thoroughly to reports of harassment that have been experienced or observed
Employer representatives who take reports seriously
A supportive environment where individuals feel safe to report harassing behavior to management
Well-trained, objective, and neutral investigators
Timely responses and investigations
Investigators who document all steps taken from the point of first contact and who prepare a written report using guidelines to weigh credibility
An investigation that protects the privacy of individuals who file complaints or reports, individuals who provide information during the investigation, and the person(s) alleged to have engaged in harassment, to the greatest extent possible
Mechanisms to determine whether individuals who file reports or provide information during an investigation experience retribution, and authority to impose sanctions on those who engage in retaliation
During the pendency of an investigation, systems to ensure individuals alleged to have engaged in harassment are not “presumed guilty” and are not “punished” unless and until a complete investigation determines that harassment has occurred
A communication of the determination of the investigation to all parties and, where appropriate, a communication of the sanction imposed if harassment was found to have occurred
Checklist Four: Compliance Training
A holistic harassment prevention effort provides training to employees regarding an employer’s policy, reporting systems and investigations. Check the box if your organization’s compliance training is based on the following structural principles and includes the following content:
Structural Principles
Supported at the highest levels
Repeated and reinforced on a regular basis
Provided to all employees at every level of the organization
Conducted by qualified, live, and interactive trainers
If live training is not feasible, designed to include active engagement by participants
Routinely evaluated and modified as necessary
Content of Compliance Training for All Employees
Describes illegal harassment, and conduct that, if left unchecked, might rise to the level of illegal harassment
Includes examples that are tailored to the specific workplace and the specific workforce
Educates employees about their rights and responsibilities if they experience conduct that is not acceptable in the workplace
Describes, in simple terms, the process for reporting harassment that is experienced or observed
Explains the consequences of engaging in conduct unacceptable in the workplace
Content of Compliance Training for Managers and First-line Supervisors
Provides easy-to-understand and realistic methods for dealing with harassment that they observe, that is reported to them, or of which they have knowledge or information, including description of sanctions for failing to use such methods
Provides clear instructions on how to report harassing behavior up the chain of command, including description of sanctions for failing to report
Encourages managers and supervisors to practice “situational awareness” and assess the workforces within their responsibility for risk factors of harassment
As the EEOC reiterates in its report, the checklists are “meant to be a useful tool in thinking about and taking steps to prevent harassment in the workplace, and responding to harassment when it occurs. … Checking all of the boxes does not necessarily mean an employer is in legal compliance; conversely, the failure to check any particular box does not mean an employer is not in compliance.” While checking the boxes may not equal legal compliance, it provides a great tool to talk about legal compliance among HR, managers, supervisors, legal and ownership/C-suite, and you cannot bring your organization into compliance without these important conversations.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
It would allow employers to offer health insurance premium rebates to employees who take part in workplace wellness programs, many of which include genetic screenings. Those who decline to participate are not forced to pay any additional health care costs, nor would they see any increase in their health insurance premiums.
The bill has received criticism because, as a result, employees who refuse to participate and make their genetic information available to their employer may have to pay thousands of dollars more a year on health insurance than those who do participate.
Employees would not be forced to disclose genetic information to employers, as some critics have suggested. But, according to online news site Vox, those who opt out would have to pay $5,400 more a year for the average family plan than those who opt in, based off of 2016 insurance price data. This sum might make opting out not viable to some employees.
Those supporting HR 1313 point out that providing this genetic information is, in fact, voluntary. Employees have a choice to opt in or opt out.
The American Benefits Council, a trade association that advocates for employer-sponsored benefits plans, also is a proponent of the bill.
Critics of bill include AARP and the American Society of Human Genetics, which argues that HR 1313 would eliminate privacy protections provided by the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act of 2008.
Recruiters need to track their recruiting conversion funnel.
Recruiting software provider Lever recently conducted hiring research that collected data from more than 600 small- and medium-sized businesses for over a year. The data was collected to help “startups and SMBs understand whether what they’re seeing unfold in their hiring practices is typical,” said Amanda Bell, director of recruiting at San Francisco-based Lever.
According to Bell, a data-driven recruiter analyzes their recruiting-conversion funnel. “This is how many candidates are making it from the top of your pipeline to a screen, from a screen to an onsite interview, and so on. It’s the information you need to spot inefficiencies in your process and understand what benchmarks to hold your team accountable to,” said Bell.
Among the findings is that 31 percent of candidates decline their offers. “As a recruiter, by the time you extend a candidate an offer, you’ve invested substantial time in them. You’re emotionally invested too, so it’s tough if they say no,” said Bell, whose company promotes a 50-50 gender balance among its 92 employees. Companies should be aware that it’s normal for almost one in every three candidates to turn their offer down, and then take steps to curb that as much as possible.
The research showed only 17 percent of candidates make it to the first stage and 32 percent of screened candidates make it to the on-site interview stage.
“This data is a useful benchmark for a recruiting leader at a small company,” said Bell. “If the conversion rate dips, it means my recruiters are spending too much time on candidates that don’t meet the bar … and time is our most precious commodity.”
The significance behind hire rates is candidate-to-hire ratio, said Bell. Knowing the right number of candidates needed at the top of the funnel maximizes chances of making a hire. The research showed SMBs go through an average of 120 engineering candidates to make one hire. “Unless your ratios are meaningfully better, if you’ve only filled your pipeline with 80 engineering candidates, you risk needing to start your search back at square one,” said Bell.
Data revealed it takes 86 candidates from all sources for every hire, but far fewer employee referrals — just 12 — to make one hire. “One in every 64 proactively sourced candidates is hired, which proves the importance of candidate sourcing as a core component of a proactive talent strategy,” said Bell. Combining sourcing and referrals is important for hitting aggressive hiring targets.
Referrals get hired at high rates, so they represent a small percentage of the candidate pool, but much larger percentage of total hires. “When comparing benchmarks to companies like Lyft, which has seen employee referrals account for as high as 40 percent of hires — startups and SMBs realize it’s worthwhile keeping the focus on employee referrals high,” said Bell.
Bell recommends tracking conversion rates, offer-acceptance rates, hire ratios and time to hire. In addition to knowing these metrics, the most efficient way to leverage recruiting data is to understand how the processes vary by role.
“Invest in the right places by knowing the most efficient sources of hire,” said Bell.
According to Bell, create an inclusive culture by asking the right questions that will evaluate talent based on their work abilities. Know what you’re looking for beforeyou go into an interview. “This allows you to ask candidates similar questions for fair comparison and reduces bias through objective decision-making,” said Bell.
After making an offer, special touches are helpful.
“At Lever, we’ve pulled all sorts of crazy stunts to make sure our offerees feel valued, like shipping a travel care package to a candidate who was about to head to Australia on vacation. You simply can’t afford to let up,” said Bell.
Mia Mancini is a Workforce intern. Comment below or email editors@workforce.com.
What the h-e-double hockey sticks with this headline, right? Why on earth would I promote the idea that diversity should be selfish? What about inclusion? Unity? Collaboration? Equality? It all depends on who’s being selfish and why.
Earlier this month I found this article on Forbes.com. In it staffer Katheryn Thayer detailed the story of Dots, a 4-year-old mobile app gaming company helmed by co-founder and CEO Paul Murphy. According to the article, he built his company to “make something that would appeal to everyone, not just gamers.”
Since his primary customer base, or players are women, he hired a lot of them, building a 50-person company comprised mostly of women or racial or ethnic minorities. Unlike others in the tech industry, he said doing so wasn’t hard. He lured them in with a flexible work environment, opportunities for development, and deliberately reached out to anyone whose network included the female talent he was trying to acquire. Now, “at Dots, women hold leadership roles in the development, game design, product, marketing, operations and finance teams.”
After that initial wave of women was working, others followed, as like attracted like. Thayer wrote, “Dots also sought cultural diversity for what Murphy calls a ‘selfish reason.’ ”
A team-first attitude can help unify a diverse workplace.
“Our game is played globally. It’s got a hundred million people that have downloaded and played our products and we think it’s really important that we have a team that reflects in some way the diversity of our player base.” So they’ve made an effort to hire employees from across Asia, Europe and the Americas. “We wouldn’t have been able to build the company without them here.”
We can infer three things from Murphy’s actions:
If you look for and make them welcome, you can find female tech talent.
The quickest way to make a successful diversity strategy work is to ensure top executives take an active role in its creation and execution.
Being selfish is not always a bad thing.
This version of selfish is actually inclusive, unified, collaborative, and most importantly it’s diverse. Or, some facets of it are. I will admit that a primarily female staff might not pass the sniff test under conventional definitions for diversity, but contextually? That’s a different thing.
Bottom line? Diversity can be achieved. Even in industries where its presence has not historically been of value, if leaders believe in the business case and take talent-oriented steps to bring about its deliverance: networking to facilitate recruiting, creating the right culture to support business and talent goals, and ensuring that the global marketplace at large knows of the company’s position on diversity and inclusion in the workplace.
According to the article Dots’ international staff were, shall we say, displeased with the recent travel ban. It “hit a nerve for us,” Murphy said. To make it crystal clear the company did not support the ban or that the actions reflected its values, Dots created an in-app pop-up to fundraise for the American Civil Liberties Union.
“In a single Saturday night, Murphy says the team developed a dozen translations of their message and worked out cultural nuances that might affect how players in specific regions, such as Taiwan versus mainland China, might interpret it.” Dots couldn’t track how much money players donated to the ACLU, but their reports showed their efforts drove 500,000 players to donation pages in a single weekend in late January.
I’m sure building Dots’ diverse workforce wasn’t quite as easy and straightforward as it seemed in this article. But it proves that with a little strategy and effort, it can be done.
Kellye Whitney is associate editorial director for Workforce. Comment below or email editor@workforce.com.
It is no secret that health care costs for employers and their employees are out of control. Many employers have attempted to hold down these rising costs by offering wellness-program incentives.
The EEOC has signed off on these programs as legal as long as employee participation remains voluntary, which the agency defines as financial incentives for employee participation at or below 30 percent of the cost of coverage. Thus, employees have a choice — participate in the wellness program or pay a surcharge of up to 30 percent.
One area that has remained off limits for employers under these wellness programs, however, has been genetic testing and other personal and family medical histories. A new bill moving through the House of Representatives, however, aims to change that.
HR 1313 — the Preserving Employee Wellness Programs Act [pdf] — seeks to clarify exactly how much personal health data employers can ask their employees to disclose as part of a wellness program, including personal and family medical histories.
Currently, under both the ADA and GINA, employers cannot ask employees about their own personal medical histories and those of their family members as a pre-condition to participation in a wellness program. All employers can do is access anonymous aggregated data collected via wellness programs.
HR 1313 would amend the law to allow employers to ask an employee for his or her personal and family medical histories (which could include historical genetic testing). The disclosure remains voluntary, because an employee could always refuse to disclose and pay the EEOC’s 30 percent surcharge to retain coverage.
This bill is scary. I am admittedly biased on this issue, as my family medical history has a big genetic piece. While I don’t hide Donovan’s Noonan Syndome, I also don’t want to face the Hobson’s choice of disclosing it to my, or my wife’s, employer or paying significantly more for our medical insurance.
Yes, health care and health insurance costs in the country are a big problem. And we must do something to fix it. I do not have the solution (health care is so complicated). I am confident, however, that whatever that solution is, it is not asking employees to sacrifice this amount of personal privacy in exchange for lower insurance premiums.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
In terms of workplace initiatives, corporate wellness is a relatively new concept that didn’t begin developing until the late 20th century. And for a relatively young industry, it has witnessed impressive growth since its inception in the 1980s.
Experts contend that employers must offer wellness benefits to attract and retain employees.
Employers have plenty of options to choose from, as 951 companies specifically specialize in corporate wellness, according to IBISWorld’s industry report from July 2016. And the vastness of the broader wellness industry allows a corporate customer many options including health clubs, weight loss programs and nutrition programs that don’t primarily cater to employers.
Corporate wellness vendors also have a lot more room to grow. IBISWorld estimates industry revenue is projected to grow to $7.6 billion annually by 2021, up 3.3 percent from 2016. Only 9 percent of global workers have access to a workplace wellness program, according to the Global Wellness Institute.
But defining value in wellness remains elusive. The industry’s growth spurt is a boon for vendors as the expansion of wellness to total well-being presents more opportunities, including former Huffington Post Publisher Arianna Huffington’s high-profile debut of her new wellness company Thrive Global late last year.
Stress management programs and financial wellness programs also are spreading, adding to the array of offerings for employees. That’s leading some to question whether the expansion epidemic is too much of a good thing for employers under pressure to make the right choice for their workers, who now expect a wellness offering as part of their benefits package.
‘[Wellness benefits have] moved from nice-to-have status to must-have status’ says Emily Noll of CBIZ Wellness Solutions
Emily Noll, national director of CBIZ Wellness Solutions, said employers are discovering they must offer wellness benefits to attract and retain employees.
“[Wellness] could be different in a few years, but it’ll be there. It’s part of the expectation of what employers offer employees,” she said. “They’ve moved from nice-to-have-status to must-have status.”
Technology from telehealth to fitness apps also continues to promote growth in the industry by allowing vendors to access employees in real time and personalize the employee experience. Employers look toward technology to motivate employees to take an active role in improving their health, Noll added.
Not everyone has a positive perspective on this growth. Wellness has too many vendors, according to Al Lewis, CEO and founder of Quizzify, a company that provides tests designed to make employees smarter about health and health care. “You know there are too many vendors in an industry when seven of them have the same name,” he said.
Such growth doesn’t benefit either the employee or the employer, he argued. Vendors often do wellness to employees rather than for them, without garnering actual results, Lewis said.
At the same time the industry has seen this expansion, it’s paradoxically seeing signs of consolidation, too. Health care transparency company Castlight Health acquired well-being platform Jiff in the first transaction of 2017, and in February 2016 corporate wellness giant Virgin Pulse acquired two wellness companies, Rhode Island-based ShapeUp and Australia-based Global Corporate Challenge.
While some predicted an acquisition craze in 2016, few blockbuster deals materialized. Still, Noll said to expect more consolidation. Some wellness startups now 3 to 5 years old will have to sell in order to pay back investors. A company also may realize they can’t keep up with the technological demands and partner with a more tech-based company in order to meet client needs.
As wellness vendors become more specialized and technology expands, employers face a workplace wellness world that is no longer a one-stop shop, Noll said. Whereas previously they would use one vendor for all of their wellness needs, that’s becoming less common. Employers may need to collaborate with multiple vendors, she said.
Consolidation may cause challenges for employers as well, Noll added. They should vet the program and account management as if they’re looking at a new company to make sure they don’t lose the personal touch they want from a vendor.
The Value of Wellness
When a company invests in a wellness program, they have a lot to choose from and much to consider before partnering with a vendor.
“Before a company implements a wellness program, they have to understand what their goals are for wellness,” said Adam Ochstein, CEO of HR services company StratEx. “Is it just to have a check in the box to say, ‘We have a wellness program,’ or are they really truly committed to what an effective wellness program does?”
Interestingly, although many employers use wellness programs to control health costs, fewer than half measure their program’s return on investment. And several academic studies have failed to show substantial cost savings, according to a 2016 Willis Towers Watson report.
Wellness advocates address this disconnect between expectations and ROI in several different ways. Some companies look at wellness as a short-term fix rather than a realistic timeline for wellness to work, Ochstein said.
‘The missing element of essentially every wellness program is employee education’ says Quizzify’s Al Lewis.
“A good wellness vendor will be very transparent,” he explained. “Typically, you will see an increase in health care costs in the first two years. Long term, you’ll see a reduction.”
Costs initially rise because employees get an annual check-up and spend money on health-related expenses before they see the any results.
Others argue that workplace wellness has a value, but it’s not economic. It’s proven that such programs are bound to lose money for a company, said Quizzify’s Lewis, and they must rethink the actual value.
“If I’m going to be spending real dollars as well as directing my employees’ valuable attention to this program, how can I be sure these programs will deliver the value I really want?” said Lewis. “For some employers, that might mean a smaller investment and commitment to wellness programs. For others, that might mean a rethinking on whether a wellness program is supposed to lower medical costs or be something that will help make employees easier to recruit and retain and help improve morale in the company.”
Value is exhibited through a company showing it cares about employee well-being, he said. Employers should realize any wellness program will lose them money, though a well-designed program will lose considerably less than a poorly designed one, he said.
Wellness programs won’t change the behaviors of many unhealthy employees, Lewis added, but they will engage the already healthy employees and change the behavior of some of the undecided. “It’s important to give employees the opportunity to take care of their health,” he said.
It’s All in the Design
A major design aspect to improving a wellness program is a performance guarantee that contractually binds a vendor to a set goal, according to Jeff Levin-Scherz, national co-leader at Willis Towers Watson’s Health Management Practice.
“The performance guarantees need to be carefully written, and the goal of them should be to encourage vendors to put the right resources into the employer’s program,” he said. “It’s important not to over-engineer them and not to make them so difficult to agree on that [as a result] you end up spending too much on the performance guarantee and not enough on the actual program.”
A careful use of incentives like rewards and punishments can also help create an effective program, according to Ochstein. People often are motivated by cost.
“If you look at what curbed smoking in this country, it wasn’t the warning label on the side of a pack of cigarettes, which have been there since the ’70s,” he said. “It’s when cities like New York began taxing cigarettes to the point where it impacted the wallet.”
Behavior changes often occur when there is a life-altering diagnosis, such as diabetes or cancer, he added. “And hopefully it impacts our pocketbook before it impacts our life.”
Corporate wellness has not lived up to the guidelines it should aspire to, argued Lewis, who once worked in the industry. Vendors design programs that encourage employees to take on unhealthy behaviors like over-screening in order to make more money, and rarely do companies or HR departments push back. The U.S. Preventive Services Task Force provides guidelines for how often people should get screened for certain problems.
Similarly, programs such as corporate crash diet competitions may motivate employees to take on unhealthy behaviors to lose weight and not support sustained weight loss, Lewis added.
Other than adhering to healthy guidelines, the other key component of workplace wellness is education.
“The missing element of essentially every wellness program is employee education,” said Lewis. Many people know to avoid sugar if they’re trying to lose weight but aren’t aware of how much sugar “healthy” food like granola bars have, he noted as an example. They’ll see the product in the health food aisle and assume it’s good for them without knowing what they’re putting in their bodies.
A Push for Certification
Regulations also may play a larger role in the future, said CBIZ’s Noll. There is little oversight in the wellness industry. Just two organizations, the National Committee of Quality Assurance and the Corporate Health and Wellness Association, certify wellness providers, and fewer than 30 vendors are certified, she noted.
At this point there isn’t a connection between certification and vendor quality, Noll said. But employers may see third-party certification as something that adds a comfort level to their relationship with the vendor. Likewise, vendors may see it as a way to differentiate themselves from the competition.
Patty Curran, principal for the national practices at Conduent HR Services.
Incentives also will play a less important role, said Patty Curran, principal for the national practices at Conduent HR Services.
“The heyday of incentives is probably passed and people are finding that incentives get people’s attention in some things and work in some parts of the wellness program to get people engaged, but for long-term sustainability, they’re not delivering,” she said.
A large trucking company she worked with offered the incentive of joining a raffle for NASCAR tickets, which doubled the number of participants in the wellness program. It worked in the short term, but she said in the long term interest in wellness faded. Employers have to be more focused on communicating the value of the program and educating employees so they can change behavior for themselves.
Lewis said there is a need for change in how some vendors operate. Although there are wellness programs he supports that don’t harm employees, there are others that promote unhealthy behavior.
He referenced the Employee Health Program Code of Conduct created on LinkedIn in August 2016. Vendors can publish on their websites that they officially endorse the code, which acts as kind of a Hippocratic oath. They can promise and make a point to not fabricate outcomes or endorse practices that harm employees.
“This code of conduct has got to be the thing for 2017,” said Lewis. “How can you have an industry if vendors aren’t willing to say, ‘First do no harm?’ ”
Andie Burjek is a Workforce associate editor. Comment below or email aburjek@workforce.com.
The 11th Circuit Court of Appeals, in Evans v. Georgia Regional Hosp. [pdf], recently held that Title VII does not protect sexual-orientation discrimination per se, and that to sufficiently plead such a cause of action under Title VII, one must allege facts sufficient to establish that the employer discriminated based on non-conformity with sex-based stereotypes.
The most curious aspect of the decision, however, comes from the concurring opinion of Judge William Pryor (whom President Trump had considered to fill Justice Antonin Scalia’s Supreme Court seat).
The unsurprising reality that some individuals who have experienced discrimination because of sexual orientation will also have experienced discrimination because of gender nonconformity by no means establishes that every gay individual who experiences discrimination because of sexual orientation has a “triable case of gender stereotyping discrimination.” …
By assuming that all gay individuals behave the same way or have the same interests, the Commission and the dissent disregard the diversity of experiences of gay individuals. Some gay individuals adopt what various commentators have referred to as the gay “social identity” but experience a variety of sexual desires. … Like some heterosexuals, some gay individuals may choose not to marry or date at all or may choose a celibate lifestyle. And other gay individuals choose to enter mixed-orientation marriages.
Perhaps the best counter-argument to this position comes from this question, asked by 7th Circuit Judge David Hamilton during oral argument over the same issue in a case pending in that court: “How do courts draw the line you want us to draw without sounding arbitrary and, occasionally, silly?”
Silly.
All gay and lesbian individuals behave the same way in one key aspect — they all are sexually attracted to people of the same sex. That’s the very definition of gay. Gay men are sexually attracted to other men, and gay women to other women. And when an employer discriminates against a gay or lesbian employee, that employer is inherently discriminating based on the employee’s choice of sexual partner, which equals discrimination based on gender. To view it any other way is intellectually dishonest.
Yes, Congress could simplify this issue by passing the Employment Nondiscrimination Act, or the Supreme Court could do so by overruling Evans. Until then, however, understand that the EEOC, most courts, and many states (but not Ohio) and localities disagree with Evans. More importantly, no matter the state of the law, your business is always free to do right by all of your employees by implementing policies banning LGBT discrimination in your workplace.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
