The website is still up and running, with lots of photos of staff and patients dressing up, goofing around and having what fun can be had at a nursing and rehabilitation center in Corning, N.Y. But in the wake of a landmark lawsuit settlement with the Equal Employment Opportunity Commission, Founders Pavilion Inc. is no more.
The company operated a nursing/rehab center in upstate New York for nearly 45 years, apparently quite successfully. But as the EEOC has expanded its enforcement activities to include such discriminatory practices as the gathering or use of genetic information in the human resources process, Founders Pavilion hit a wall.
As alleged by the EEOC in its suit lodged last May, "Founders Pavilion requested family medical history as part of its post-offer, pre-employment medical exams of applicants. The Genetic Information Nondiscrimination Act (GINA), passed by Congress in 2008 and enforced by the EEOC, prevents employers from requesting genetic information or making employment decisions based on genetic information."
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Taking its case a step further, the EEOC claimed that Founders fired a couple of employees "who were perceived to be disabled," and used pregnancy as a covert reason in several other HR decisions that deprived women of work.
The parties settled, with Founders forking over $370,000. The company, according to the EEOC, agreed to "provide a fund of $110,400 for distribution to the 138 individuals who were asked for their genetic information … (and) also pay $259,600 to the five individuals who the EEOC alleged were fired or denied hire in violation of the ADA or Title VII."
Meanwhile, Founders sold off the nursing home and went out of business as an entity. Those actions triggered a couple of interesting interdictions from the EEOC.
First, the EEOC ordered, "If Founders Pavilion resumes conducting business, the consent decree requires Founders Pavilion to post notices and send a memo to employees regarding the lawsuit and consent decree. They will also adopt a new anti-discrimination policy that will be distributed to all employees, provide antidiscrimination training to all employees and provide periodic reports to the EEOC regarding any internal complaints of discrimination."
Next, the EEOC set some new rules for the buyer of the home. "Pavilion Operations, the buyer of the Corning, N.Y., nursing facility, agreed as a non-party signatory to the consent decree. They will revise their antidiscrimination policies and will include specific references to genetic information discrimination, disability discrimination, and pregnancy discrimination laws and will include a complaint and investigation procedure for employee complaints of discrimination. Pavilion Operations will also provide antidiscrimination training to all of its employees."
What's the takeaway for the business community? Writing for the Seyfarth Shaw LLP bog, attorneys Reema Kapur and Lily M. Strumwasser said the Founders Pavilion suit was yet another example of the EEOC's "focus on high-impact and high-profile cases."
In a note to employers, they said: "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. … 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."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
