Florida Company Loses COBRA Notice Case

June 28, 2002 (PLANSPONSOR.com) - A Florida beverage distributor hired an outside vendor to send mandatory notices to former employees about receiving continuing medical coverage, however, an appeals court ruled that the company didn't go far enough.

Judges at the US Eleventh Circuit Court of Appeals said Suncoast Beverage Sales still had responsibility to make sure the notices required under the Consolidated Omnibus Budget Reconciliation Act (COBRA) actually got put in the mail.

“Simply hiring an agent and then instructing the agent to send notice is not sufficient to satisfy the statute, where there is no evidence that the agent sent out a notice to the plaintiff, nor any evidence that the principal took the necessary steps to ensure that the agent would, in all cases, make such notification,” wrote Circuit Judge Cornelia.

The Eleventh Circuit ruling upheld a decision by a federal district judge in the Middle District of Florida, which awarded the case to Ivory Scott, a former Suncoast delivery driver who sued after not receiving the mandated COBRA notice.

Scott may have won on his COBRA claim, but he lost with his allegations that Suncoast had racially discriminated against him. Appeals judges ruled that one racist comment by a co-worker didn’t rise to the level of discrimination.

The case is Scott v. Suncoast Beverage Sales Ltd., 11th Cir., No. 01-11734, 6/25/02.