Employers are typically familiar with prohibitions against retaliating against their employees for engaging in protected activity under a statute. Employers, however, may be unaware of additional anti-retaliation provisions that have been established under the Affordable Care Act (“ACA”).
One of the lesser known provisions of the ACA is its amendment to the Fair Labor Standards Act (“FLSA”) to protect employees who receive certain benefits under the ACA or who report violations related to their employer’s failure to meet certain requirements of the ACA. Specifically, Section 158 of the ACA, which creates Section 18C of the FLSA, prohibits employers from discharging, or in any manner discriminating against, an employee with respect to the employee’s compensation, terms, conditions, or other privileges of employment because the employee: 1) received a tax credit or a subsidy under the ACA; 2) provided information to any governmental entity relating to a violation of the ACA; 3) testified or is about to testify in a proceeding concerning the violation; 4) assisted or participated in such a proceeding; or 5) objected or refused to participate in any activity reasonably believed to be in violation of any provision of the ACA.
Section 158 of the ACA is enforced by the Occupational Safety and Health Administration (“OSHA”). An employee who reasonably believes that he or she has been retaliated against by his or her employer in violation of Section 158 may seek relief within 180 days of the claimed retaliation. An employee must file his or her retaliation claim with OSHA before he or she may file suit in Federal Court. The employee must establish a prima facie case that the protected activity engaged in by the employee was a “contributing factor” in any alleged adverse employment action. The employer will have 20 days to respond to the employee’s complaint, and may provide written statements and affidavits supporting its position.
The standard for establishing a prima facie case is very favorable to employees. To establish a prima facie case, the employee must show, by a preponderance of the evidence, that: 1) the employee engaged in a protected activity; 2) the employer knew or suspected the activity; 3) the employee suffered an adverse employment action; and 4) the circumstances are sufficient to lead to the inference that the protected activity was a contributing factor to the retaliatory action. If the employee establishes his or her prima facie case, the employer must then show by clear and convincing evidence that it would have taken the same employment action notwithstanding the occurrence of the protected activity.
The foregoing demonstrates the significant burden employers will face when defending a claim that the employer violated the ACA’s anti-retaliation provisions. It is far easier to satisfy a preponderance of the evidence standard than to satisfy a clear and convincing evidence standard.
OSHA is required to issue its written findings within 60 days of the filing of the complaint. If OSHA finds reasonable cause to believe the alleged retaliation has occurred, it will issue a preliminary order directing appropriate action by the employer. Either party can file written objections to OSHA’s findings or preliminary order within 30 days, and request a hearing before an administrative law judge. If no party objects to the findings or requests a hearing within 30 days, OSHA’s findings and preliminary order will become final and not subject to additional judicial review. If no binding decision has been issued within 210 days of the filing of the complaint, the employee is then authorized to bring an action in the United States District Court.
It is important to note that the remedies available under the ACA are substantial. Specifically, the ACA authorizes all relief necessary to make the employee whole, including injunctive and compensatory damages. This includes, for example, reinstatement, back pay with interest, and special damages, which may include litigation costs, attorney’s fees and expert fees.
Based on the foregoing, it is essential that employers be aware of the ACA’s retaliation provisions and take meaningful steps to ensure that the provisions are not violated. For example, employers should promptly supplement their handbooks to specify that engaging in protected activity under the ACA is among the categories of activity for which retaliation by the employer is prohibited. Additionally, if reasonably practical, individuals who are empowered to make employment decisions within an organization should be shielded from information related to employees who have received tax relief or subsidies under the ACA. It can be expected that retaliation claims under the ACA will be a significant feature of employment litigation going forward.
As always, any employer seeking assistance in complying with the retaliation provisions of the ACA is invited to contact Ferguson, Schetelich & Ballew, P.A. at (410) 837-2200.