Workplace pros weigh in on U-Haul antismoking hiring policy

U-Haul is bracing for industry pushback after implementing an anti-nicotine hiring policy.

The nationwide moving company announced on Dec. 30 it would no longer consider job applicants who use nicotine products in the 21 states where it’s legal to do so. U-Haul’s new hiring policy will go into effect Feb. 1, and existing employees who use nicotine products will not be affected. Employees hired under the policy will be required to undergo periodic nicotine screening.

“Not one person will benefit from this non-smoking hiring procedure,” says Ryan Mottley, a recruiter for PPS Professional Personnel Services — a Maryland-based staffing agency. “No one at U-Haul will breathe better."

U-Haul’s policy will cover traditional cigarettes and the increasingly popular e-cigarettes and vaporizers. While the health risks of cigarettes are well documented — the World Health Organization estimates tobacco kills about 8 million people every year — the long-term implications of vaping are still at large. However, the American Cancer Society says researchers are starting to see a correlation between vaping and serious lung diseases. It’s unclear how U-Haul’s nicotine testing will impact employees who use nicotine replacement therapies, like gum and patches, as part of a quitting regimine.

In response to U-Haul’s new policy, Mottley expressed concern that refusing to hire smokers could lead other companies to decide to exclude other types of candidates — alcoholics and obese people, for example. However, an employment and benefits attorney says that isn’t possible because both alcoholics and obese people are protected under the Americans with Disabilities Act. But U-Haul may have opened themselves up to other discrimination lawsuits by adopting an anti-nicotine policy.

“Even in the 21 states that allow this policy, smokers could claim disability discrimination,” says Kate Ulrich Saracene, practice head of Katten Muchin Rosenman LLP — a law firm with offices in New York and Chicago. “It doesn’t mean it would win, but it would cause a lot of trouble and litigation [expenses].”

Saracene says that under the application of Title VII of the Civil Rights Act, there are neutral categories that qualify as discrimination if it has a disparate impact on a race, sex or ethnic origin. Smoking is one of those neutral categories, and since African American men and American Indian women are more likely to smoke, the courts could determine the policy has a disparate impact on them, she says. In order to defend themselves against a similar charge, U-Haul would have to prove its antismoking policy is strictly job-related.

“Hospitals have similar non-smoking policies, but being in the healthcare industry allows them to say it’s directly job-related,” Saracene says. “A company like U-Haul is going to have a much harder time proving that.”

In conjunction with the new hiring policy, U-Haul added a program to help existing employees quit smoking to its benefit package. But providers of this type of wellness benefit aren’t on board with the idea of companies excluding smokers as job candidates.

“Smokers already have a harder time getting hired and restricting employment opportunities because of a treatable addiction — one most smokers want to break free from — further exacerbates that inequity,” says Robin Koval, CEO and president of the Truth Initiative — a nonprofit that created the EX Program, an employee benefit for helping smokers quit. “A cessation program is the single most cost-effective health insurance benefit provided by any company. Employers should expand their quit smoking benefits to include these programs, instead of refusing to hire smokers.”

Even employer groups where the practice is legal are concerned anti-nicotine hiring policies will disproportionately affect working class employees — and for good reason. The Centers for Disease Control estimate working class and impoverished Americans are almost 40% more likely to smoke. Many of these workers perform blue collar labor for companies like U-Haul. Given the current talent shortage, how will anti-nicotine hiring policies affect industries that rely on blue collar workers?

“When discussing this news with our employers, one member with a manufacturing workforce indicated that they wouldn’t have an applicant pool if they implemented a similar policy,” says Michael Howard, president and CEO of the Alabama Employer Health Consortium, a coalition of employers from across the state.

Smokers cost U.S. employers an extra $170 billion for medical care, and more than $156 billion from lost productivity every year, the CDC estimates. While U-Haul’s policy is marketed as a wellness initiative, Saracene, as an employment attorney, speculates the decision was made to cut down on the costs associated with having smokers on staff. U-Haul did not respond to requests for comment.

“It’s pretty clear U-Haul’s decision was motivated by insurance costs,” Saracene says.

However, anti-nicotine hiring policies, like U-Haul’s, may not be enough to prevent smoking from impacting an employer’s healthcare costs. The CDC says second-hand smoke exposure costs employers around $5.6 billion in lost productivity — something employers can’t control outside of working hours. Employees also aren’t the only ones benefiting from their health plan.

“If your goal is to drive down health plan costs, it might not have the intended impact with family tobacco users,” says Jacob Mattinson, partner at global law firm McDermott, Will & Emery.

Employers can require their workforce to be nicotine-free (in states where it’s legal), but they can’t extend that policy to their employees’ family members, Mattinson says. They can help curb the additional costs those dependents incur by structuring their health plans to include additional charges for smokers, but it needs to be done carefully to comply with state laws.

States where employers can enact antismoking hiring policies include: Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Maryland, Massachusetts, Michigan, Nebraska, Pennsylvania, Texas, Utah, Vermont, Virginia and Washington.

Mattinson also says it’s important for employers to remember that they can’t ask their health provider to report whether or not employees are smoking, as it would be a HIPPA violation. Doing so can result in civil penalties and large fines.

“Granted, not everyone is going to be honest about nicotine use during the hiring process, but [employers] can’t ask health providers for that information,” Mattinson says. “But they can test their workforce for nicotine where state law allows it — that has nothing to do with benefit plans.”

While employers can decide to revoke a conditional offer of employment based on the results of a nicotine screening, they can’t terminate existing employees who don’t pass, Saracene says. Doing so would be a violation of the Employee Retirement Income Security Act, Section 510 — the law that protects against workplace retaliation. That includes employees hired under U-Haul’s new anti-nicotine policy; if they test positive for nicotine — as part of a company wellness program — after working at the company for a year, the company can’t fire them even if they tested negative during the hiring process, Saracene says.

“It’s obvious that’s why U-Haul left out existing employees when they crafted this policy, but the thing that concerned me is the part where employees need to consent to future testing,” Saracene says. “Those [EEOC] regulations on wellness programs restrict what employers can do with employees who don’t pass. They can’t terminate them.”

Saracene says the Equal Employment Opportunity Commission is deciding whether to allow companies to inflict financial penalties on employees who don’t comply with wellness programs. Employers currently can under the Affordable Care Act, but the courts are debating whether it conflicts with the ADA. Saracene’s advice to employers: Wait and see what the EEOC decides.

“My thought would be to let the bigger companies test it and litigate it first,” Saracene says. “Do you want to spend your money to be the test case? Larger companies can absorb the risk better than small or mid-sized companies.”

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