Employees of Dave & Buster's successfully sued the chain for intentionally cutting hours to avoid the Affordable Care Act health insurance mandate. In the lawsuit, they used an unusual approach to advance their argument. Because it may be the first successful suit of its kind, its effect could be felt in California and elsewhere around the country.
The lawsuit alleged the employer intentionally cut the hours of its employees to below 30 per week to take the employees out of the ACA provisions of mandatory healthcare benefits. In their class action suit, the employees used ERISA provisions rather than elements of the ACA. ERISA is normally thought of as an act protecting retirement benefits, but the plaintiffs relied on one specific provision.
Under Section 510 of ERISA, employees cannot be discharged or punished for benefits under an employee benefit plan nor 'for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." The plaintiffs argued that the employer, by reducing their hours, was interfering with the attainment of benefits to which they may be entitled.
The court required the plaintiffs to prove the employer was intentionally attempting to interfere with benefits. The plaintiffs had evidence, including statements made by management, that the restaurant chain was reducing hours solely to avoid the ACA mandate. Based on the court's preliminary ruling and the evidence of the plaintiffs, the parties agreed to a settlement, which requires court approval.
If approved, it is presently unknown whether the preliminary ruling will have any value as precedent. Even if it does not, it may be used as a legal blueprint for other potential plaintiffs to follow. Those who have had their hours reduced or who have had their employee rights violated may wish to speak to an attorney to help them obtain potential relief from the court system.