Ryder System Inc. agreed to pay $390,000 to settle a proposed class action claiming it sends legally insufficient COBRA notices informing former workers of their right to keep their company-provided health coverage.
The settlement is expected to benefit about 23,200 people who didn’t elect COBRA coverage after being sent COBRA notices from Ryder between 2018 and 2022. The deal provides for gross payments of $16.80 for each class member, with net payments valued at between $7.50 and $10, according to a settlement motion filed Wednesday in the US District Court for the Southern District of Florida.
Class members aren’t required to file a claim to receive benefits, and any unclaimed amounts in the settlement fund will go to Legal Services of Greater Miami, according to the filing.
The lawsuit accuses Ryder, a trucking and transportation company, of violating the Consolidated Omnibus Budget Reconciliation Act. This federal law requires companies with 20 or more employees to allow workers and their covered family members to continue their employer-sponsored health coverage for a brief period after they’ve been terminated or experienced another qualifying event.
The statute requires employers to notify workers of their COBRA rights and dictates what information must be included in the notices, with violations subject to penalties of up to $110 per day for each affected individual.
Plaintiff James Thompson III argued that Ryder failed to include all legally required information in a single COBRA notice. Thompson also challenged Ryder’s alleged practice of pointing workers to a “catch-all” human resources number instead of adequately explaining the process for enrolling in coverage.
The deal is subject to approval by Judge Cecilia M. Altonaga, who in 2022 allowed portions of the case to advance over Ryder’s motion to dismiss.
Dozens of proposed class actions alleging COBRA notice failures have been filed in the past few years. Some companies have signed class settlements, including
Thompson is represented by Wenzel Fenton Cabassa PA and Justice Litigation Associates PLLC, which stand to receive up to one-third of the settlement amount as attorneys’ fees if the deal is approved.
Constangy, Brooks, Smith & Prophete LLP represents Ryder.
The case is Thompson v. Ryder Sys., Inc., S.D. Fla., No. 1:22-cv-20552, motion for preliminary settlement approval 3/15/23.
To contact the reporter on this story:
To contact the editors responsible for this story:
To read more articles log in.
Learn more about a Bloomberg Law Subscription.