COBRA Requires Good-Faith Effort at Rights Notice Delivery

June 9, 2007 ( - The 1st U.S. Circuit Court of Appeals said it could not be sure whether an employer knowingly sent a terminated employee's Consolidated Omnibus Budget Reconciliation Act (COBRA) notice to the wrong address, but said that a good-faith effort to deliver the notice to the correct address is required.

The appeals court agreed with the U.S. District Court for the District of Puerto Rico that a good-faith effort to notify a terminated employee of her rights to continued health care service was necessary to meet the COBRA’s notice requirements. However, because of disputed facts over whether Merck Sharp & Dhome (I.A.) Corp. knowingly sent the notice to the wrong address, the court could not be certain that the company met good-faith compliance.  

Kathleen Torres-Negrón worked for Merck-PR from March 1, 1989 until she was terminated on October 19, 2001 on claims that she used the company courier for personal use on several occasions. She worked as a sales representative at Merck-PR from 1989 until 1999, at which time she was transferred to Merck Sharp & Dhome de Mexico S.A. de C.V. (“Merck-Mexico”) on a temporary assignment.

Torres claims that Merck-PR did not comply with COBRA’s notice requirements because it used her old address to notify her of her COBRA rights, despite the alleged fact that she called Merck-PR at some point after December 11, 2001 to inform the company of her new Puerto Rico address.

Noting that Torres admitted to having her mail forwarded from her old address to her new Puerto Rico address, the district court dismissed Torres’s COBRA claim holding that Merck-PR had substantially complied with COBRA’s notification requirements because its notice was reasonably calculated to reach Torres.

The case is Torres-Negron v. Merck & Co., Inc., 2007 .