Ex-Starbucks worker's spouse doesn't have to arbitrate ERISA claim, court rules
By Daniel Wiessner
Dec 16 (Reuters) -A U.S. appeals court on Monday said Starbucks SBUX.O 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' 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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