Criminal Justice Paper on Failure to Give COBRA Notice

Case Citation: Slipchenko v. Brunel Energy, Inc., Case 4:11-cv-10465 (Courtroom 11-B September 30, 2014)

Plaintiffs: Tamara Slipchenko, David Roswell, and Valerie Barton

Respondent: Brunel Energy Inc.

Citation: 4:11-CV-10465 (2014)                                                              Date: September 30, 2014

Facts of the Case

In Slipchenko V. Brunel Energy, the three plaintiffs Tamara Slipchenko, David Roswell, and Valerie Barton filed a class action suit on behalf of themselves and similarly situated employees of the defendant company; Brunel Energy Inc. The class included all employees of the company who had elected to be covered under its health plan, along with their spouses, and other dependents who were participants in the plan after April 2009 (Slipchenko v. Brunel Energy, Inc., 2014).The defendant company had failed to give COBRA initial notice, failed to provide notice and benefits after a ‘qualifying event’, and failed to inform the class members of their right to continued health-care coverage, even after the termination of their employment contract.

Issues

The plaintiffs filed for a “class” certification under Rule 23, as well as a summary judgment against the defendants. The plaintiffs also sued for compensating of attorney’s fees as well as prejudgment and post-judgment interest.

Ratio Dicidendi

On August 30, 2013, the Federal District Court admitted the class action suit, for Brunel’s: 1) failure to provide the initial COBRA notice, 2) failure to provide notice and benefits following a ‘qualifying event’, and 3) same treatment towards all class members, against whom the same alleged statutory were committed After going through the various procedural formalities, the case ended up with an interim settlement of the COBRA and ARRA claims on August 25, 2014.

Court Holding

The court held that the damages issues were certifiable since they depend on the defendant’s conduct and intent and on January 23, 2015, the District Court decreed a final settlement of $ 1million, which would give a payout of $5,000 to each of the 70 class members, while the remaining $650,000 covered the attorney’s fees and other costs.

Analysis

The Court followed the Federal Rules of Civil Procedure 23 (e), with regards to class settlements for ensuring that all class members got a fair share. The notices were issued to all members, and the members had sufficient time to object to the settlement though none of the members raised objection. In adjudicating the claims, the District Court did not make personal comments of prejudice and bad faith of the employer, but grouped all the plaintiffs into a class, though it failed to see the different dates on which members acquired their qualifying events. In ignoring these individual differences, the court had erred in certifying the suit as a class action suit.

Case Significance

The $1 million settlement in Slipchenko V. Brunel, highlights the heavy penalty to be paid due to failure in adhering COBRA guidelines. The suit is only one of the three that have been certified as class action suits and shows that courts change their views ignoring the facts that show negligence on the part of the employer leading to the detriment of the employees. This big amount in settlement, might also have been prompted by the bad actions of Brunel, which lead the courts to heavily penalize the employers. The case thus acts as a wake-up call to employers to take a more proactive approach in following to the COBRA guidelines.

 

References

Slipchenko v. Brunel Energy, Inc., Case 4:11-cv-10465 (Courtroom 11-B September 30, 2014).