Employer Sued for Reducing Employee Hours After ACA

The lawsuit claims Dave & Buster’s effort to “right size” its workforce was done to avoid paying for health care benefits.

An employee of Dave & Buster’s Inc. in New York City has filed a lawsuit claiming the company violated the Employee Retirement Income Security Act (ERISA) Section 510 interference of benefits provisions when it reduced full-time employees’ hours following passage of the Patient Protection and Affordable Care Act (ACA).

Maria De Lourdes Parra Marin filed the suit on behalf of herself and all other Dave & Buster’s employees in the U.S. whose hours were involuntarily reduced by Dave & Buster’s from June 1, 2013, to the present and whose reduction in hours resulted in either the loss of coverage under the company’s health plan or a reduction to inferior coverage. According to the complaint, Marin’s hours were reduced from 30 to 45 hours per week to 10 to 25 hours per week.

The lawsuit alleges that, at a meeting attended by Marin, a general manager of Dave & Buster’s stated that the ACA’s provisions would cost the company as much as $2 million and to avoid that cost, it planned to reduce the number of full-time employees at Marin’s store. The lawsuit assumes that similar meetings were held by Dave & Buster’s across the country.

The lawsuit cited a news report in The Dallas Morning News, in which a human resources officer for the company said, “Like many companies, D&B is in the process of adapting to upcoming changes associated with the health care reform.” However, in response to a letter from Marin’s attorney, the company stated that Marin’s reduction in hours was part of a nationwide “program in 2013 intended to right-size the number of full-time and part-time employees in [its] stores.”

The lawsuit asks the court to reinstate employees to their full-time positions and restore their rights as participants in Dave & Buster’s health plan. It also asks for an award to plaintiffs to make them whole for the loss of wages and benefits, with interest, from the date of reduction in their hours.

Last year, a federal district court moved forward a lawsuit claiming an employer refused to advance a part-time employee to a full-time position to avoid paying for health coverage.