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A federal judge in New York rejected a proposed $7.425 million deal between Dave & Buster’s Inc. and a worker who said the restaurant and entertainment chain illegally reduced employees’ hours to deprive them of health-care benefits.
The case is the first Employee Retirement Income Security Act lawsuit that alleged an employer, in response to the employer mandate of the Affordable Care Act, intentionally interfered with workers’ benefits by cutting their hours to make them part time. The number of full-time workers a company has plays in to whether the mandate requires them to provide those workers with health coverage.
In her lawsuit, Maria de Lourdes Parra Marin requested a certain type of class treatment, to be reinstated in her job, and other kinds of relief that Judge Alvin K. Hellerstein Dec. 1 found inconsistent the remedies she sought in the multimillion-dollar proposed settlement she filed last month.
Marin also failed to provide damages calculations or other evidence to show that the settlement was fair and reasonable, Hellerstein said.
Last year, Hellerstein declined to dismiss the lawsuit, holding that there was enough evidence to support the worker’s claims that the company acted with an “unlawful purpose” when it reduced the hours of hundreds of employees and thereby made them ineligible for health benefits.
The proposed settlement, which sought to end the litigation, would have provided relief to approximately 1,200 class members.
Based in Dallas, Dave & Buster’s owns and operates locations across the U.S. and Canada, with the vast majority of its restaurants concentrated in California, New York, and Texas, according to company information on the Bloomberg Terminal.
The parties didn’t immediately respond to Bloomberg Law’s request for comment outside normal working hours.
Abbey Spanier LLP, Conover Law Offices, and Frumkin & Hunter LLP represent the proposed class. Paul, Weiss, Rifkind, Wharton & Garrison LLP represents Dave & Buster’s.
The case is Marin v. Dave & Buster’s, Inc. , S.D.N.Y., No. 1:15-cv-03608, order denying plaintiff’s motion for conditional class certification, and for preliminary approval of class action settlement 12/1/17 .
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