Dive Brief:
- National entertainment chain Dave & Buster's is the first business accused in a lawsuit of cutting its workers' hours to avoid providing healthcare under the Affordable Care Act, a violation of the Employee Retirement Income Security Act (ERISA), reports The National Law Review.
- The complaint, filed in the United States District Court for the Southern District of New York, alleges D&B's health plan was offered to full-time employees but that the company launched a nationwide effort to "right-size" its workforce so that a number of full-time employees' hours were cut to less than 30 hours a week at many of its restaurants in order to switch employee status from full- to part-time.
- The Law Journal story says the plaintiffs seek relief under ERISA Section 510, which prohibits employers from interfering with employees' receipt of ERISA-governed benefits, such as health insurance. The lawsuit claims relief in the form of payment of lost wages and reinstatement in the employer health plan.
Dive Insight:
The National Law Review article, from firm Squire, Patton, Boggs, noted that although ERISA does not control all aspects of how a company does business, status changes of employees who are currently receiving benefits under benefits plans must be made carefully with an eye toward ERISA compliance.
The article also said that while the suit appears to be the first of its kind, it was no surprise, as employment lawyers eventually expected this type of litigation to occur.
"While we don't know for sure what the outcome of this class action will be, by not ensuring ERISA compliance, Dave & Buster's cost-cutting measures may impact their ability to serve up its fun fare," partner Susan M. DiMickele wrote.
It's going to be interesting to see if any other employers take on this specific risk with ACA/ERISA regulations. That is, if Dave & Buster's has actually done it, which will be determined through this case.
