Starbucks Sued Over Health Coverage Notices Sent to Ex-Employees

A former Starbucks employee filed a proposed class action in Florida federal court accusing the company of sending legally deficient notices of workers’ right to remain on the company health plan after leaving their jobs.

The notice Starbucks sends former workers violates federal law because it doesn’t explain how to enroll in coverage or include an election form, Ariel Torres alleges in a complaint filed Monday in the U.S. District Court for the Middle District of Florida. Instead, the notice directs employees to a “catch-all” human resources phone number, which is insufficient under the Consolidated Omnibus Budget Reconciliation Act, Torres claims.

COBRA is the federal law requiring companies with 20 or more employees to allow workers to continue their health coverage after they’ve been terminated. The statute dictates what information must be included in the notices and when they must be sent, and employers that violate these requirements may face penalties of up to $110 per day for each affected individual.

Employers have been hammered in recent months with class suits challenging their COBRA notices. More than a dozen COBRA lawsuits have been filed in the past three months alone, with defendants including Citigroup Inc., Bank of America Corp., Sysco Corp., DollarDays International Inc., Greif Inc., Albany International Inc., and Nestlé Waters North America.

Causes of Action: Violation of COBRA’s notice requirements.

Relief: Order requiring proper notices be sent at Starbucks’ expense, declaration of deficient notices, injunction blocking use of deficient notices, statutory penalties, attorneys’ fees, and costs.

Potential Class Size: Thousands of participants and beneficiaries in Starbucks’ health plan who received COBRA notices but didn’t elect COBRA coverage.

Response: Starbucks didn’t immediately respond to a request for comment.

Attorneys: Wenzel, Fenton, Cabassa PA and Justice for Justice LLC represent the proposed class.

The case is Torres v. Starbucks Coffee Co., M.D. Fla., No. 8:20-cv-01311, complaint 6/8/20.