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