The Dave & Buster’s restaurant chain recently settled a class action lawsuit claiming it violated ERISA’s “discrimination” rules by reducing hours of various employees to cause them to lose eligibility for the company’s group health plan. After over three years of litigation in the Southern District of New York and suffering some procedural losses along the way, Dave & Buster’s agreed to settle the matter for $7.425 million. After attorneys’ fees and costs, we estimate the employees will receive about $2,100 each.
Dave & Buster’s took the action in response to the “employer mandate” provisions of the Affordable Care Act, which require large employers to offer compliant and affordable group health coverage to full-time employees, generally defined as those working an average of at least 30 hours each week, in order to avoid potentially substantial tax penalties. The saga took a long time to play out. The law passed in March 2010. Dave & Buster’s started reducing employees’ hours in mid-2013. The lead plaintiff worked a reduced shift and lost eligibility for group health insurance in March 2014. She filed suit in May 2015. The court approved the settlement in December 2018. The class members have to be notified, the plaintiffs’ attorneys will seek their fees and the court is expected to approve everything once and for all in mid-May 2019. After that, class members will be paid, likely well into late-2019. Continue Reading