In his decision, U.S. District Judge John Bates of the District of Columbia in Washington acknowledged the “tension that exists between the laudable goals behind such wellness programs”—which often entail collecting sensitive medical information from employees—and other federal regulations limiting employers’ access to such data.

But he found that the EEOC had failed to adequately explain its decision to interpret the term “voluntary” in those other regulations—the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act—to allow the 30 percent incentive threshold.

“Neither the final rules nor the administrative record contain any concrete data, studies or analysis that would support any particular incentive level as the threshold past which an incentive becomes involuntary in violation of the ADA and GINA,” Bates wrote.

“To be clear, this would likely be a different case if the administrative record had contained support for and an explanation of the agency’s decision, given the deference courts must give in this context. But ‘deference’ does not mean that courts act as a rubber stamp for agency policies.”

Dara Smith, an attorney at the AARP Foundation Litigation, said it will be “extremely difficult” for the EEOC to justify the 30 percent level as the agency revisits the rule. “I think they could come up with a better rule that would actually be fair and prevent coercion,” she said.

EEOC Acting Chairwoman Victoria A. Lipnic said in a statement: “We are assessing the impact of the court’s decision and order, and options with respect to these regulations going forward.”

Bates’s decision granted the AARP’s motion for summary judgment against the EEOC rule. But Bates declined to vacate the rule entirely out of concern for “significant disruptive consequences.”

If the rule were vacated, Bates said, employees who’ve already received wellness program incentives “would presumably be obligated to pay these back,” while employers who effectively imposed a penalty on nonparticipating employees “would likewise be obligated to repay to employees the cost of the penalty.”

Protected health care information that was already disclosed to companies “cannot be made confidential again,” Bates said.

“It is far from clear that it would be possible to restore the status quo ante if the rules were vacated; rather, it may well end up punishing those firms—and employees—who acted in reliance on the rules,” Bates wrote.