Questions of Fact Still Remain Around COBRA Claim

October 15, 2003 ( - Questions of fact still remain in a case involving a terminated employee's Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits, thus precluding summary judgment.

>Even though many of the allegations made by the employee were dismissed by US District Judge Jed Rakoff  the US District Court for the Southern District of New York, Rakoff determined a trail to examine all the facts of the case would be necessary.   This was in order to decide whether the ex-employee had been dismissed for gross misconduct, which would disentitle him to COBRA benefits, or if the nature of his termination entitled him to COBRA benefits.

>Summary judgment on both sides – on the claim of breach of contract for termination without cause and failure to compensate as promised – was denied though as the court found questions of fact regarding whether the employer and employee had a binding employment agreement.   In addition, the court found questions of fact whether the employee had actual notice of the rights of his 401(k) plan, a point the employee argues violates Employee Retirement Income Security Act (ERISA) provisions.

Case History

Adam Deutsch was employed by Kroll Associates, Inc. from June 1991 to April 2000. He was promoted several times, eventually becoming a managing director.  

Beginning in the early part of 2000, the company received complaints about Deutsch’s behavior.   Among the allegations were fits of violence displayed by Deutsch and improper behavior toward female employees. At the time, Kroll considered terminating him, but delayed action.   Later that year, Deutsch was involved in a physical altercation with another executive at Kroll.

Following his run-in with the company executive, Kroll suggested Deutsch take a leave of absence, which he agreed to do.   However on April 14, 2000, he was informed that he was being terminated. Deutsch refused the offered severance package and sued Kroll for numerous violations of employment and contract law.

The case is Deutsch v. Kroll Associates Inc., Southern District of New York, Number 02 Civ. 2892 (JSR).