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Work-hours, health reform class action against Dave & Buster's can proceed

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A U.S. District Court judge has refused to dismiss a putative class action lawsuit filed by a former restaurant worker who claims her employer cut her hours to part time from full time in order to avoid Affordable Care Act costs, in violation of the Employee Retirement Income Security Act.

Maria De Lourdes Parra Marin said in a lawsuit filed in May 2015 that in response to enactment of the ACA, managers at a New York restaurant operated by Dallas-based Dave & Buster's Inc. told workers that to avoid costs totaling as much as $2 million, it would reduce its full-time employees to about 40 from more than 100, according to Tuesday's ruling by the United States District Court for the Southern District of New York in Maria De Lourdes Parra Marin v. Dave & Busters Inc. et al.

She was then reduced from full-time to part-time status, causing a reduction in pay to a range of $150 to $375 per week from a range of $450 to $600 per week, along with the loss of eligibility for medical and vision benefits, according to the ruling.

Ms. Marin then filed suit, charging discrimination under ERISA.

U.S. District Judge Alvin K. Hellerstein denied Dave & Buster's motion to dismiss the case in the ruling.

“Plaintiff has put forward factual allegations supporting her claim that the employer had the specific intent to interfere with her right to health insurance,” said the ruling. “The reduction in plaintiff's hours affected her employment status, her pay, and the benefits she had and to which she would be entitled.”

Commenting on the ruling, Kevin LaCroix, attorney and executive vice president of RT ProExec, a division of R-T Specialty L.L.C. in Beachwood, Ohio, said the ruling illustrates “how employers that try to restructure to find a way to evade the mandates of the ACA could wind up, potentially at least, facing litigation” under ERISA.