U.S. District Judge Richard D. Rogers of the U.S. District Court for the District of Kansas said Congress has dictated in the American Recovery and Reinvestment Act (ARRA), which amended COBRA to provide a premium subsidy for individuals involuntarily terminated, that the court give “deference” to the determination of the Secretary of Labor. In its determination letter to Stormont-Vail Health Care, the DoL told the employer that “gross misconduct” generally must be something that would rise to the level of a felony or something that might lead to criminal charges.
Rogers noted that the “mooning” incident was intentional, willful and reckless in the eyes of the court, but it was also a single, isolated, impulsive incident which only harmed workplace protocol.
Rogers rejected Stormont-Vail’s contention that the procedure which led to the determination letter is not authorized by the statute which sets forth the expedited review process and is contrary to the Constitution’s Due Process Clause. He noted that one of the purposes of ARRA in general was to swiftly ameliorate some of the nation’s unemployment problems, including the loss of health insurance. “It seems to make little sense to expedite the decision on whether premium assistance is available, but then wait for a more extended process to determine whether an applicant is eligible for COBRA coverage at all,” Rogers wrote.
The court found that Stormont-Vail proved it and the beneficiaries of its health insurance plan would suffer a risk of irreparable harm if the court sided with the employee. However, it ruled that the “balance of equities” in the case weighed against Stormont-Vail since, if the court issued the requested injunction, the employee will not have medical insurance and will be responsible for paying her medical costs, and “she is far less capable of paying those expenses than plaintiff’s medical plan.”
Stormont-Vail argued that the employee will have an avenue to recoup her medical costs if she can prove that COBRA coverage was improperly withheld, but Rogers noted this would require the employee to file a lawsuit which will require time and expense.
Finally, Rogers said the public’s interest in increasing health insurance coverage in this nation is not served by Stormont-Vail’s requested injunction.
According to the court opinion, Jennifer Reavis was employed by Stormont-Vail Health Care as a nurse in February 2010. Stormont-Vail received a report that Reavis, while working in a patient care area, “mooned” a male nurse. The male nurse said Reavis told him to answer some patient call lights, and when he told her he was busy, Reavis bent over with her scrub pants pulled down, exposing her rear end.
Reavis claimed that she was “responding to a provocative finger gesture and that she only partially exposed her backside to the male nurse. However, Stormont-Vail fired Reavis on February 22, 2010, explaining that Reavis had failed “to meet SVHC values” and that the mooning incident constituted “gross misconduct.”
The employer informed Reavis that she would not qualify for continued health insurance coverage under the provisions of the COBRA and ERISA statutes because of her “gross misconduct.” Reavis filed an “Application to the U.S. Department of Labor for Expedited Review of Denial of COBRA Premium Reduction.”
The case is Stormont-Vail Health Care Inc. v. U.S. Dept. of Labor Employee Benefits Security Administration, D. Kan., No. 10-4052-RDR, 5/27/10.