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Ex-Starbucks worker's spouse doesn't have to arbitrate ERISA claim, court rules
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Ex-Starbucks worker's spouse doesn't have to arbitrate ERISA claim, court rules
Dec 16, 2024 10:36 AM

Dec 16 (Reuters) - A U.S. appeals court on Monday said

Starbucks cannot force a former employee's husband to

arbitrate claims that the company failed to notify him about

continuing healthcare coverage under the company's policy after

his wife lost her job.

A unanimous three-judge panel of the Atlanta-based 11th U.S.

Circuit Court of Appeals said that because Raphyr Lubin never

worked for Starbucks, he was not bound by an agreement his wife

had signed to arbitrate legal claims stemming from her

employment with the company.

Lubin in a 2020 proposed class action accused Starbucks of

failing to provide beneficiaries of its healthcare plan with

adequate notice of their ability to enroll in continuing health

coverage provided under the Consolidated Omnibus Budget

Reconciliation Act, or COBRA, when they or their spouses stopped

working for the company.

"His claim has nothing to do with his wife's employment

agreement; rather, it centers on his statutory right to receive

an adequate COBRA notice," Circuit Judge Barbara Lagoa wrote.

Starbucks and lawyers for Lubin did not immediately respond

to requests for comment.

The ruling means that Starbucks may have to face a trial in

the case, though it was not clear if the proposed class will be

limited to beneficiaries of the healthcare plan who did not work

for the company. A former Starbucks employee who sued along with

Lubin agreed to arbitrate his claim after the company moved to

compel arbitration.

Lubin's wife was terminated from her job with Starbucks in

early 2019, and they each received a notice from the

administrator of the company's healthcare plan regarding COBRA

coverage. But the notices omitted information, such as how to

enroll and where to send payments, required by the federal

Employee Retirement Income Security Act of 1974, according to

filings in the case.

Lubin and the former Starbucks employee, Ariel Torres, sued

the company in Tampa, Florida, federal court in 2020.

Lubin opposed Starbucks' ( SBUX ) motion to compel arbitration, and

U.S. District Judge Charlene Honeywell in 2021 ruled that

because he was not a party to his wife's arbitration agreement,

his claim could proceed in court.

Starbucks appealed, arguing that Lubin's claim was

derivative of his wife's employment agreement. But the 11th

Circuit on Monday said Lubin was suing to enforce his own

statutory right to adequate COBRA notice.

"Those notice duties do not arise out of any provision of

his wife's employment contract," Lagoa wrote.

The panel included Circuit Judges Andrew Brasher and Gerald

Tjoflat.

The case is Torres v. Starbucks, 11th U.S. Circuit Court of

Appeals, No. 21-11215.

For the plaintiffs: Brandon Hill and Luis Cabassa of Wenzel

Fenton Cabassa

For Starbucks: Sherril Colombo and Stefanie Mederos of

Littler Mendelson

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