ERISA Complaints Against Food Companies Dismissed

Last week in the Western District of Tennessee, an attorney who brought three cases on behalf of ex-workers of The Hershey Company, Sysco Corporation, and Sodexo, Inc., asked for and received orders of dismissal of complaints alleging Employee Retirement Income Security Act (ERISA) violations. The purported class actions, filed earlier this year, claimed that the companies failed to provide a putative class of ex-employees with adequate notice of their rights to receive continued healthcare insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

The complaints asserted that each of the food industry companies’ notification of COBRA benefits was deficient. For example, in the filing against Hershey, the plaintiff contended that the notice “fail[ed] to sufficiently identify the Plan Administrator… [and] omit[ted] several critical information items.” In the suit against Sysco, the plaintiff averred that the notice confused him and “resulted in his inability to make an informed decision as to electing COBRA continuation coverage.” The Sysco notification also lacked information on how to enroll in COBRA and where to mail the payment, the plaintiff claimed.

In the case against Sodexo, the plaintiff argued that, among other contradictory and confusing provisions, the notice “never informed [him] of the date his COBRA coverages, if elected, would end.” The same complaint claimed that Sodexo’s notification defects ultimately threatened the “very interests Congress sought to protect through ERISA and COBRA.”

Each complaint was filed as a class action. The putative classes sought to include participants and beneficiaries of the defendants’ health plans, who were sent a COBRA notice “during the applicable statute of limitations as a result of a qualifying event,” who did not elect COBRA.

Sysco responded to the complaint by filing a motion to dismiss, asserting that its COBRA notification was adequate and that the complaint was untimely. The court did not rule on the motion before the plaintiff in that case voluntarily dismissed. In the other two suits, Hershey and Sodexo had not yet filed responses before the plaintiffs’ voluntary dismissal last week.

The plaintiffs are represented by Morgan & Morgan PA. Hershey is represented by Constangy Brooks Smith & Prophete LLP. Sodexo is represented by Ogletree Deakins Nash Smoak & Stewart PC. Sysco is represented by Jackson Lewis PC.