Genetic Discrimination

The U.S. Equal Employment Opportunity Commission (EEOC) has settled its first court action challenging the use of workplace genetic testing under the Americans with Disabilities Act of 1990 (ADA).

The EEOC had sought a preliminary injunction against Burlington Northern Santa Fe Railway (BNSF) to end genetic testing of employees who filed claims for work-related injuries based on carpal tunnel syndrome.

“EEOC sought the preliminary injunction to prevent irreparable harm to employees who faced the impossible choice of potentially losing their jobs or revealing their genetic makeup,” says Commission Chair Ida Castro. “Our swift action in this case allows Burlington Northern employees subjected to genetic testing to continue to work free of retaliation and future invasions of privacy in violation of the Americans with Disabilities Act.”

According to EEOC officials, Burlington Northern’s genetic testing program was carried out without the knowledge or consent of its employees, and at least one worker was threatened with termination for failing to submit a blood sample for a genetic test.
Under the settlement, in which BNSF admits that it tested certain employees for a genetic marker, the company agreed to not directly or indirectly require its employees to submit blood for genetic tests.

The Drug Price Fix

The Federal Trade Commission (FTC) in April charged three drug makers — Schering-Plough Corporation, Upsher-Smith Administrative Laboratories and American Home Products Corporation — with entering into anticompetitive agreements aimed at keeping low-cost generic drugs off the market.

The FTC administrative complaint alleges that Schering, the maker of K-Dur 20, a widely prescribed potassium chloride supplement, illegally paid Upsher-Smith and American Home Products millions of dollars to induce them to delay launching their generic versions of the drug.

The agreements, the FTC said, have cost consumers more than $100 million.
K-Dur 20, a prescription potassium chloride supplement, is used to treat patients with low blood potassium levels, a condition that most commonly occurs in people taking certain drugs to treat high blood pressure.

The FTC alleged that Upsher-Smith and Schering settled a patent dispute with an agreement through which Schering would pay Upsher-Smith not to enter the market.

Under this agreement, Upsher-Smith would sell neither the product for which it had filed with the FDA, nor any other generic version of K-Dur 20 (without regard to whether Schering had any basis to claim infringement), until September 2001.
In exchange, Schering paid Upsher-Smith $60 million. Although under the agreement Schering received licenses to market five of Upsher-Smith’s products, the complaint charges that these products were of little value to Schering and that the $60 million payment had little relation to the value of those products.

Schering said its settlements were “lawful and proper” and that the company expects to “vigorously challenge any action taken by the FTC.”

The ATM Charge Scam

Five years after ATM owners began imposing surcharges on non-customers, the cost of using another bank’s ATM machine has nearly tripled, from $1.01 before surcharging to $2.86 today.

A new U.S. Public Interest Research Group (PIRG) survey finds that while in 1996 consumers paid only a single “foreign” ATM fee to their own bank, averaging $1.01, to use another bank’s ATM, they now pay both that foreign fee plus the new surcharge that, combined, average $2.86 in 2001.

The survey also found that the nation’s biggest banks charge the highest combined ATM transaction fees and are leading the way in charging a new annual ATM card “rental” fee.

“Double-dipping ATM surcharges now mean triple costs for consumers,” says Ed Mierswinski, consumer program director for U.S. PIRG. “Charging consumers twice to use the ATM only once is worse than an April Fool’s joke, it’s part of a calculated bank strategy to boost profits: Raise fees, invent new fees, and make it harder for consumers to avoid fees.”

On April 1, 1996, the two largest ATM networks, VISA’s Plus and Mastercard’s Cirrus, ended their prohibition against member banks surcharging non-customers using their ATMs. The ATM owner keeps the entire surcharge and receives a portion of the “foreign” ATM fee nearly all banks had previously and continue to charge their own accountholders who use other owner’s ATMs.

Despite the increase in the number of ATMs surcharging, PIRG’s Mierswinski says some positive signs exist.
Several cities, led by San Francisco and Santa Monica, have banned ATM surcharging, although those bans have been blocked pending court challenge.

Iowa continues to enforce its ban on surcharging. Other cities, including New York and Chicago, are considering bans, but until an appeal on the California court case has been decided, the banks’ lawsuits will continue to have a chilling effect on surcharge ban efforts, Mierzwinski notes. In addition, several networks and alliances of small banks and credit unions are aggressively marketing their own “no-surcharge” and “selective surcharge” policies.

–– Russell Mokhiber