Employee Retaliation Claims Under the Affordable Care Act

April 3, 2013


As the Affordable Care Act (ACA) takes effect, employers of all sizes are concerned with how provisions may impact them. With regard to adverse employment actions, the ACA prohibits employers from retaliating against employees for exercising their rights under the bill.

Protected Activity

The ACA amended the Fair Labor Standards Act (FLSA) to add 29 U.S.C. §218C (section 18C), which provides protection to employees against retaliation by public and private employers for engaging in certain protected activities. The term “employee” means any individual employed by an employer. It also includes former employees and applicants for employment.

Employers may not discharge or retaliate in any manner against employees who:

  • Received a tax credit or a cost sharing reduction for purchasing insurance through an Exchange
  • Provided information relating to any violation of Title I of the ACAor any act they reasonably believed to be a violation of Title I of the ACAto (1) the employer, (2) the federal government, or (3) the attorney general of a state
  • Testified, assisted, or participated in a proceeding concerning a violation of Title I of the ACA, or are about to do so
  • Objected or refused to participate in any activity they reasonably believed to be in violation of Title I of the ACA

Retaliation Claims—Interim Final Rules

The interim rule establishes procedures and time frames for the handling of retaliation complaints under section 18C. Employees will need to file a complaint with OSHA within 180 days of the alleged ACA violation. OSHA will share the complaint with the IRS, the Treasury Department, the Department of Health and Human Services, and/or any other relevant branches of the Department of Labor.

Complaints are screened to determine if a complainant makes an initial showing that protected activity was a contributing factor in the adverse employment action alleged in the complaint. Preliminary reinstatement can be ordered. Employers typically will have 20 days to submit a position statement, and OSHA will issue its findings (and, if necessary, the preliminary order) 60 days after the filing of the statement.

If OSHA determines a violation has occurred, the preliminary order can include affirmative action to abate the violation; reinstatement; back pay and interest; and compensatory damages, including attorneys’ fees. Within 30 days, either party can file objections or request a hearing. If no objection or request for hearing is filed, the preliminary order becomes a final decision.

Employees can file a claim in federal District Court within 90 days after receiving findings and a preliminary order, or after 210 days from the date of filing if no preliminary order has been issued (providing there is no final decision). Either party is entitled to a trial by jury.

If a timely objection is filed, all provisions of the preliminary order will be suspended, except for an order of preliminary reinstatement. Reinstatement is effective immediately upon the receipt of the findings and preliminary order, even if objections or a request for hearing are filed. A stay of a preliminary order of reinstatement can be granted based on exceptional circumstances.

Hearings are held before an administrative law judge (ALJ), where the Complainant must prove that protected activity was a contributing factor in the challenged adverse employment decision. The burden then switches to the employer who must prove that the same choice would have been made regardless of any protected activity. The ALJ will issue a written decision, which becomes final, unless either party files a petition for review within 14 days.

Petitions for review of an ALJ decision are filed with the Administrative Review Board (ARB). The ARB can accept or reject the petition for review. If the ARB does not accept the petition for review, the parties can appeal the ALJ’s decision to the relevant federal court of appeals. If the ARB accepts the petition for review, the final decision of the ARB will be issued within 120 days of the petition. The parties then have 60 days to appeal the ARB’s decision to the relevant court of appeals.

Bottom Line

ACA retaliation claims are another way in which employees can challenge termination decisions, methods of discipline, or any other adverse employment actions. Employers should carefully document any adverse employment actions which arguably affect employees engaged in activities protected under the ACA. It is important that notices and handbooks are up-to-date and supervisors and human resource professionals are up to speed on employees’ rights under the ACA.

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