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Brenntag Mid-South Settles COBRA Notice Class Suit for $65,000

Oct. 26, 2021, 2:10 PM

Chemical distributor Brenntag Mid-South Inc. negotiated a $65,000 class settlement to end litigation challenging the notices it sends former workers informing them of their health coverage rights, papers filed in a Tampa, Fla., federal court show.

The deal will give more than 900 class members net payments of about $53, according to a settlement motion filed Monday in the U.S. District Court for the Middle District of Florida. Brenntag will pay class counsel $70,000 in attorneys’ fees separate and apart from the settlement amount, the parties say.

The lawsuit, filed in March by former Brenntag worker Alex McNamara, accuses the company of violating the Consolidated Omnibus Budget Reconciliation Act. 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 notices of COBRA rights, and employers that violate these requirements may face penalties of up to $110 per day for each affected individual.

McNamara claimed Brenntag’s COBRA notices failed to include legally required information, including the termination date for COBRA coverage and the identity of the health plan administrator.

Dozens of proposed class actions alleging COBRA notice failures have been filed in the past few years. Several cases have been resolved through voluntary dismissals or individual settlements. Some companies have signed class settlements, including Home Depot USA Inc. ($815,000), WCA Management Co. ($210,000), Enhanced Recovery Co. ($140,000), Goodman Group Inc. ($112,240), and V. Marchese Inc. ($75,000).

Wenzel Fenton Cabassa PA and Morgan & Morgan PA represent the class. Morgan, Lewis & Bockius LLP represents Brenntag.

The case is McNamara v. Brenntag Mid-South, Inc., M.D. Fla., No. 8:21-cv-00618, motion for settlement approval 10/25/21.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com