WASHINGTON—Final regulations issued last week by the Equal Employment Opportunity Commission for the Genetic Information Nondiscrimination Act leave firms potentially liable in cases where managers ask innocent questions about workers' welfare, many observers warn.

On the positive side, the regulations, which go into effect Jan. 10, 2011, essentially permit employers to continue offering financial incentives for participating in wellness programs, observers say.

The regulations on the 2008 law that bars workplace discrimination based on genetic information were long-awaited by employers. The EEOC proposed regulations under Title II of GINA on March 2, 2009, followed by a period of public comment.

The long delay from the proposal to last week's final regulations was due to the EEOC carefully vetting the proposal at every stage and consulting with all concerned stakeholders, according to an EEOC spokeswoman.

Regulations in connection with Title I of GINA, which addresses using genetic information in health insurance, went into effect in October (BI, Oct. 12).

Observers said of particular interest in the Title II rules are provisions that provide an exception to the general prohibition against soliciting genetic information from employees. The regulations state the law does not apply when such information is requested or obtained inadvertently.

An EEOC analysis accompanying the regulations, for instance, says employers do not violate GINA when a manager inadvertently overhears genetic information or when a casual question is asked, such as, “How's your son feeling today?”

However, employers cannot ask follow-up questions that are “probing in nature, such as whether other family members also have the condition, or whether the individual has been tested for the condition” because they “are likely to result in the acquisition of genetic information,” according to the EEOC analysis.

Some observers believe these limits are unrealistic and could create liability in cases where supervisors ask innocent questions.

David Gevertz, a shareholder with law firm Baker, Donelson, Bearman, Caldwell & Berkowitz P.C. in Atlanta, said he is concerned that the rules are “attempting to monitor normal workplace conversations that occur routinely between and among employees and supervisors.”

The regulations unsuccessfully attempt to “designate more bright lines” insofar as the inadvertent acquisition of information is concerned, said Lawrence Z. Lorber, a partner with law firm Proskauer Rose L.L.P. in Washington.

Paul E. Starkman, a partner with law firm Arnstein & Lehr L.L.P. in Chicago, said the rules could result in workplace problems “where people are working such long hours and often have worked together for years and maybe are pretty close and actually care about each other.”

“It's one more thing that makes the workplace a little colder and just a little more adversarial,” said Mr. Starkman. While no one can argue in favor of genetic discrimination “how (GINA) plays out in the workplace may be different from what people may have thought when they drafted this law and drafted these regulations.”

However, Wendy Lazerson, a partner with law firm Bingham McCutchen L.L.P. in East Palo Alto, Calif., said the regulations were “designed with common sense in mind.”

“They're not trying to catch people in a "gotcha' kind of moment, but they're really trying to say they don't want people to go after this information purposefully and then use it improperly,” Ms. Lazerson said.

The rules also provide that information inadvertently learned through social networking sites would not be considered a violation of GINA. However, there is some ambiguity in language concerning websites such as Facebook that require registration, with language in two different places that appears contradictory, said Steven J. Pearlman, a partner with law firm Seyfarth Shaw L.L.P. in Chicago.

The regulations prohibit employers from seeking out such information, such as going on the Internet and typing in a worker's or applicant's name and the term “breast cancer” while doing an online search, observers say.

It also includes safe harbor language that employers can use in their requests for medical information to stipulate that workers are not being asked to provide any genetic information (see related story).

Observers say GINA is more likely be a “tacked-on” charge to a suit brought under the Americans with Disabilities Act or Family and Medical Leave Act rather than a primary complaint. In fact, about three-quarters of the more than 200 complaints already filed alleging GINA violations also raise ADA allegations, according to the EEOC.

“Employers almost never use genetic information anyway in making employment decisions,” said Robin E. Shea, an employer attorney with Constangy, Brooks & Smith L.L.P. in Winston-Salem, N.C.

Meanwhile, a provision involving wellness programs in the final regulations is an improvement over the original proposed rule for employers, observers said.

Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J., said the initial proposal would have allowed employers to use genetic information in connection with voluntary wellness programs, but it did not define such programs. That prompted employer concern as to whether wellness programs that provided financial incentives still could be considered voluntary.

That has now been answered in the affirmative in the final regulations, said Mr. Stover.

“The positive news is, you can have a financial incentive,” he said. It “would largely kill” wellness programs if employers could not offer workers incentives for their participation, he said.

The regulations also clarify that employers should ask health care providers not to elicit genetic information, which was an issue of concern to some employers, Mr. Pearlman said.

The regulations are available at http://edocket.access.gpo.gov/2010/pdf/2010-28011.pdf.