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COVID-19 & THE EMPLOYMENT LITIGATION HORIZON: UPDATE #5—COBRA LITIGATION

As Georgia and other states begin to “open,” and employers in those states take their first tentative steps toward recalling furloughed workers to previously shuttered workplaces, they face a constantly shifting legal landscape and a host of litigation risks.  As a litigation boutique that represents employers, executives and workers, our purpose here is not  to wade into the debate over the wisdom of such re-openings but, rather, to provide some (hopefully) helpful information to those weighing such difficult decisions—and those impacted by them.  This is the fifth in a series of posts addressing such issues, which we will update consistently over the coming weeks.  This fifth installment addresses claims under the Consolidated Omnibus Budget Reconciliation Act of 1985, or “COBRA”—the federal law that allows laid off workers to continue their employer-provided healthcare coverage.


COBRA Claims.  On March 25, 2020, a former Amazon employee filed a putative class actionagainst the company, alleging that it violated his COBRA rights and those of his fellow class members.  Amazon terminated the employee on December 1, 2019 and, a short time later, mailed him a notice informing him of his right, under COBRA, to continue his Amazon-provided health care coverage.  According to the lawsuit, however, Amazon’s COBRA notice violated the statute because it:

  • Was “not written in a manner calculated to be understood by the average plan participant”;

  • Included “an ominous warning . . . that the submission of even ‘incomplete’ information when electing COBRA coverage [could] result in civil, or even criminal, penalties”; and

  • “[N]eedlessly reference[d] a possible ‘$50 penalty from the IRS’” for failure to provide a correct tax identification number.

The cumulative effect of these deficiencies, the employee alleges, was to “intimidate” and “scare individuals away from electing” COBRA coverage—which the employee declined.


Lawsuits like this one will likely become more common in the COVID-19 era.   An estimated thirty million Americans have lost their jobs since the pandemic began.  Many of those laid off workers also lost their employer-provided health care coverage.  For the sick and vulnerable, the timing could not possibly be worse.   That is where COBRA is supposed to come in.


COBRA allows laid off employees to continue their employer-provided health care coverage.  COBRA’s notice requirement aims to assure that employees receive the information they need to elect continuing coverage, if they so choose.  As alleged in the Amazon lawsuit, “Notice is of enormous importance.  The COBRA notification requirement exists because employees are not presumed to know they have a federally protected right to continue healthcare coverage…”  Given the eyepopping number of recently laid off workers,  and the sheer enormity of the task of properly notifying those employees of their COBRA rights (amidst the chaos wrought by a global health pandemic, no less), we can expect that some employers have committed notification errors, and we can further expect that those notification errors will lead to lawsuits of the type recently filed against Amazon.


For all those potentially impacted, a quick COBRA primer follows:

© 2020 Fried Bonder White, LLC.

Fried Bonder White, LLC. is an Atlanta, Georgia-based litigation boutique that specializes in complex business, employment and personal injury litigation. The firm’s attorneys represent clients, large and small, in the defense and prosecution of lawsuits throughout Georgia and nationwide.