Smart Benefits: New ACA Litigation - Dave & Buster’s Dismissal Denied

Monday, March 07, 2016

Rob Calise, GoLocalWorcester Business/Health Expert

PHOTO: Wikipedia

A New York federal judge recently denied Dave & Buster’s motion to dismiss a lawsuit accusing the restaurant chain of violating ERISA by reducing the hours of its workforce in 2013 to avoid the costs associated with providing health insurance to its full-time employees in compliance with the ACA. The class action lawsuit, Marin v. Dave & Busters, Inc., was filed last May and involves potentially 10,000 employees whose weekly hours were reduced in 2013, when they were moved from full-time to part-time status.

Maria De Lourdes Parra Marin worked approximately 30 to 45 hours a week at Dave & Buster’s from 2006 through May 2013, and as a full-time employee, she participated in the company’s health insurance plan. Beginning in June 2013, Ms. Marin’s hours were reduced to fewer than 30 hours per week and, in August 2013, her hours were reduced to fewer than 20 hours per week. She was notified in March 2014 that she no longer qualified for coverage under the company’s health plan because she did not work an average of at least 28 hours per week, which was required to be classified as a full-time employee.

Marin contends that by converting employees from full-time to part-time status, Dave & Buster’s interfered with the attainment of their rights to participate in the company’s health plan in violation of ERISA Section 510. Section 510 makes it unlawful “to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary…for the purpose of interfering with the attainment of any right to which such participant may become entitled under” an employee benefit plan or ERISA.

In the context of reducing employees’ hours, the decisive issue under ERISA Section 510 may boil down to whether managing the hours of a workforce constitutes a legitimate business decision involving cost management or an intentional interference with an employee’s benefit rights.

As the first case of its kind, and notwithstanding the fact that no findings have been made on the merits, could have major implications for companies contemplating a workforce realignment.

Rob Calise is the Managing Director, Employee Benefits. of Cornerstone|Gencorp, where he helps clients control the costs of employee benefits by focusing on consumer driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance.

Video Wall photo courtesy of wikipedia

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