The two-year old lawsuit is brought by an employee who alleged her hours were cut from approximately 40 a week to less than 30. This resulted in her being ineligible for health benefits. According to the lawsuit, Dave & Buster’s reduced its workers’ hours to prevent them from continuing to receive health benefits under the company plan.
Should the proposed settlement receive final court approval, some 1,200 class members would benefit. This is the first Employee Retirement Income Security Act lawsuit that alleged an employer, in response to the employer mandate of the Affordable Care Act, intentionally interfered with workers’ benefits by cutting their hours to make them part time, Biglaw.com reports. The number of full-time workers a company has factors into whether the mandate requires them to provide those workers with health coverage. The employee brought the case pursuant to an ERISA provision that prohibits employers from taking an employment action with the specific intent to interfere with benefits.
In 2016, a federal judge in New York refused to dismiss the lawsuit, finding instead that sufficient evidence existed to support the workers’ claims that the company acted with an “unlawful purpose” when it reduced the hours of hundreds of employees and thereby made them ineligible for health benefits.