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Dr. Pepper employees say company violated ERISA rules

When a Tennessee employee loses his or her job, among other concerns may be the loss of health care benefits, especially if the worker’s family is also covered through the employer-based insurance policy. Through the Consolidated Omnibus Reconciliation Act, workers have the option of continuing their benefits after a job loss or other event that results in the termination of coverage. One company in another state is facing a lawsuit for violating the Employee Retirement Income Security Act, or ERISA, when it denied workers the option to refuse the COBRA coverage.

Drivers for Dr Pepper Snapple say the company used COBRA to bully them into ending their strike. The workers went on strike after refusing the company’s contract offer that fell short of competitive wages. The same day, Dr Pepper Snapple allegedly suspended their insurance coverage and enrolled them in COBRA coverage. It can be expensive to continue the same coverage outside an employer’s plan, and not everyone chooses to continue the coverage.

Employers have the right to terminate health care benefits for workers on strike. However, the workers complain that by unilaterally enrolling them in the expensive COBRA coverage, Dr Pepper Snapple violated their right to a 65-day grace period for deciding whether to continue their coverage. They claim it is another example of Dr Pepper Snapple’s refusal to bargain in good faith.

It remains to be seen whether a court will agree that the company violated the rights of its workers under ERISA. Tennessee employees should be aware of the limitations their employers have when it comes to making decisions regarding a worker’s health care benefits. For answers to questions and guidance in fighting violations, many turn to an experienced attorney.