Ex-Wells Fargo Worker Drops Claims of ‘Ominous’ COBRA Notices

A former personal banker for Wells Fargo & Co. is dropping her lawsuit accusing the bank of sending threatening and legally deficient notices informing workers of their right to keep their health coverage, according to a Florida federal court order.

Judge Thomas P. Barber dismissed the proposed class action without prejudice on Tuesday, two weeks after plaintiff Mayland Stubbs notified the court of her plans to drop the case. Stubbs’ notice said the voluntary dismissal applied to her “individual claims only.”

Stubbs’ lawsuit, filed in the U.S. District Court for the Middle District of Florida, challenged the COBRA notices Wells Fargo sends to notify former employees of their right to remain on the company health plan after leaving their jobs. Stubbs claimed these notices omit legally required information and include an “ominous” warning suggesting employees could face civil and criminal penalties if they file incomplete COBRA elections.

The Consolidated Omnibus Budget Reconciliation Act 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 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.

Dozens of proposed class actions alleging COBRA notice failures have been filed in the past few years. Several employees have signed class settlements, including Home Depot USA Inc. ($815,000), WCA Management Co. ($210,000), Enhanced Recovery Co. ($140,000), and Goodman Group Inc. ($112,240). Other cases have been voluntarily dismissed in the early stages of litigation.

Wenzel Fenton Cabassa PA represented Stubbs. Bowman & Brooke LLP represented Wells Fargo.

The case is Stubbs v. Wells Fargo & Co., M.D. Fla., No. 8:22-cv-00104, electronic dismissal order 4/19/22.