Since our earliest postings, we have warned of a notion, prevalent among employee counsel, that an employer plan sponsor unlawfully retaliates against an employee by reducing her work hours in order to deprive her of ACA “full-time” coverage offer eligibility. The musings that we have heard and read rarely distinguish claims under ERISA § 510 (29 U.S.C. § 1140) and ACA § 1558 (29 U.S.C. § 218c). Pending review of judicial opinions addressing such claims, we have been skeptical. It seems to us that, if managing work hours to minimize ACA “full-time” exposure violates ERISA or the ACA, then managing weekly work hours of all employees to limit future exposure to FLSA claims once raised by some should violate the FLSA’s anti-retaliation provision, 29 U.S.C. § 215. But, typically, non-discriminatory management of future exposure is permitted. In the ACA context, it’s a main theme of the IRS employer mandate rules.
On February 9, 2016, without addressing those points, the court in Marin v. Dave & Buster’s, Inc., S.D. N.Y. No. 1:15-cv-03608 denied a defense motion to dismiss such a claim under ERISA § 510. The court found sufficient Plaintiff’s evidence that a Times Square store manager and assistant manager had told employees that work hours were cut because the employer forecast that, absent such management, the ACA would impose as much as two million dollars of new expense in 2015. The store’s number of full-time employees fell from over 100 to about 40. That evidence was enough, said the court, to satisfy the requirement for proof of a specific intent to interfere with benefits.
This potentially disruptive opinion bears watching. In the meantime, if you’re looking for a corporate logo, don’t pick a bulls-eye.