Benefits And Compensation

Class Motion Declare Dismissed: No Proof of Harm Attributable to Alleged COBRA Discover Violation


Many instances have lately challenged the technical content material in numerous employer-provided COBRA notices. The premise of those lawsuits has been that even minor deviations from COBRA rules from the U.S. Division of Labor (DOL) ought to make a plan administrator answerable for penalties even when the notices in any other case included complete COBRA data. Actually, plan directors ought to work onerous to make sure COBRA notices are clear and complete; nevertheless, a latest determination helps the view that hyper-technical compliance isn’t the objective—clear explanations of the COBRA rights must be sufficient for compliance functions.


An employer/plan administrator satisfied a courtroom to dismiss a category motion declare alleging it violated COBRA’s election discover requirement. A federal district courtroom in Florida agreed that the claims of aggrieved former worker didn’t sufficiently show that she was injured by the alleged discover failures. The case is Carter v. Southwest Airways Co. Board of Trustees, Case No. 8:20-cv-1381-T-02JSS (M.D., Fla., December 14, 2020).

Info of the Case

Cherrita Carter was terminated from employment with Southwest Airways on Could 8, 2019. Southwest alleged that it despatched her a COBRA election discover on Could 14, 2019, which she denied receiving. Carter challenged her termination by way of a union’s grievance course of underneath which her well being protection was maintained—the method particularly offered she was not required to make a COBRA election through the grievance process, as protection would proceed.

The union in the end denied Carter’s grievance on August 5, 2019, which led to the termination of her well being protection. Southwest despatched Carter a COBRA election discover on August 6, 2019. Carter acknowledged receiving it however didn’t elect COBRA protection. In her lawsuit, Carter claimed that the COBRA discover she obtained was poor as a result of it was late, lacked important data, and confused her.

She filed a category motion declare for COBRA discover violations, alleging that Southwest’s discover failures led her to lose protection, incur vital medical payments, and chorus from looking for mandatory medical care. She sought financial damages, attorneys’ charges, and an injunction barring Southwest from utilizing the faulty discover and requiring it to mail corrective notices.

Southwest sought dismissal of the declare, contending that Carter lacked standing as a result of she failed to ascertain a concrete harm; she by no means defined particularly how she was harmed by the alleged deficiencies. Southwest additionally argued that Carter had no declare as a result of the COBRA discover offered to her considerably complied with the relevant legal guidelines and rules. The courtroom appeared to case legislation, in addition to the DOL’s discover rules, in agreeing with Southwest, addressing Carter’s declare as follows.

Carter claimed that Southwest despatched a late COBRA discover on August 6, 2019—90 days after her termination of employment. The courtroom discovered this “implausible.” Carter made it seem as if she misplaced protection instantly after her Could termination of employment; nevertheless, the courtroom famous that this was not true. She had protection—possible cheaper than COBRA protection—at the very least by way of August 5, 2019, when the union rejected her grievance and upheld her termination. Moreover, Southwest defined that Carter was despatched her first election discover in Could 2019. Carter denied receiving that discover. The courtroom, nevertheless, defined that, for COBRA functions, the authorized customary for good-faith compliance is whether or not the plan administrator despatched the discover utilizing strategies which might be “fairly calculated” to succeed in plan members, comparable to sending the discover by first-class mail.

Nonetheless, the courtroom decided that Carter had no purpose to enroll in COBRA protection proper after her termination of employment, and he or she had no purpose to chorus from looking for medical care till August 5, 2019. Earlier than that time, the courtroom famous that Carter had group well being protection in place. It was, within the courtroom’s opinion, “unclear how [Carter] could possibly be injured by a lack of know-how about COBRA throughout a interval when she had no must elect COBRA protection.” Accordingly, the courtroom held Carter suffered no financial or informational harm that may justify her having standing to carry her claims.

Subsequent, the courtroom rejected Carter’s claims that the August discover was informationally poor as follows:

  1. It didn’t embody the date the qualifying occasion occurred. The DOL COBRA discover rules don’t require that plan directors/employers embody the precise date on which the qualifying occasion occurred, based on the courtroom.
  2. It failed to incorporate “the title of the plan.” Carter alleged that the COBRA discover simply referred to Southwest Airways and its group well being plan with out offering the formal plan title, which was the Southwest Airways Co. Well being and Welfare Profit Plan. The courtroom held that she did not show how the omission of these 5 phrases harmed her or her capacity to elect COBRA protection, notably because the discover clearly associated to her termination from Southwest and clearly handled COBRA protection, which was group well being plan continuation protection.
  3. It failed to offer contact data for the “plan administrator.” The COBRA discover did have contact data for Southwest. Nonetheless, Carter contended that the DOL COBRA discover rules require that the discover embody the identification of the formal plan administrator, Southwest Airways Board of Trustees. The courtroom rejected this reasoning, noting that (a) the regulatory provision at situation doesn’t, in reality, point out the time period “plan administrator”; (b) the rules replicate the sensible actuality that “individuals specializing in COBRA administration” are distinct from “plan directors” as a result of most companies delegate COBRA administration to 3rd events; and (c) the DOL’s mannequin election discover instructs events to incorporate “the Plan Administrator or different celebration chargeable for COBRA administration.”
  4. It was not written “in a way calculated to be understood by the common plan participant.” Carter alleged that the discover confused her; nevertheless, the courtroom famous she didn’t clarify how or why it did so and why it impaired her determination to elect COBRA.

Accordingly, the courtroom dismissed Carter’s claims.


As beforehand reported, quite a few COBRA class motion instances have challenged COBRA notices based mostly on comparatively minor discrepancies with the DOL rules. The Carter determination is important as a result of the courtroom stepped again and, successfully, mentioned, “Even when these notices are complicated or missed some technical guidelines, how precisely did that hurt the plaintiff class?” A basic rule in litigation is {that a} plaintiff should reveal an harm, and the Carter courtroom was not persuaded that the plaintiff was really harmed by the alleged deficiencies.

After all, one other courtroom might attain a distinct conclusion.

Leave a Response