Evans v. Books-A-Million

• Decision Date: 29 October 2012
• Docket Number: Civil Action No. CV-07-S-2172-S
• Parties: TONDALAYA EVANS, Plaintiff, v. BOOKS-A-MILLION, Defendant.
• Court: United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama

TONDALAYA EVANS, Plaintiff,
v.
BOOKS-A-MILLION, Defendant.

Civil Action No. CV-07-S-2172-S

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA NORTHEASTERN DIVISION

Dated: October 29, 2012

MEMORANDUM OPINION

This is an action in which the plaintiff, Tondalaya Evans, alleged claims against her former employer, Books-A-Million, under four federal statutes: i.e., the Equal Pay Act of 1963, 29 U.S.C. § 206(d)(1); Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; and, the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161 et seq.¹ The case originally was assigned to Magistrate Judge John E. Ott pursuant to 28 U.S.C. § 636(b). Judge Ott subsequently filed a lengthy report in which he recommended that the defendant's motion for partial summary judgment be granted, and that defendant's motion to strike portions of the declaration submitted by plaintiff in opposition to summary judgment be granted in part and denied in part.²

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The action then was reassigned to the undersigned judicial officer for all further proceedings.³

Following consideration of the objections to the Magistrate Judge's report and recommendation filed by plaintiff,⁴ the parties' briefs and evidentiary submissions, and an independent review of the entire file, this court entered a memorandum opinion and order ratifying the Magistrate Judge's recommendations, and dismissing all of the plaintiff's claims, except for her claim based upon the Consolidated Omnibus Budget Reconciliation Act.⁵ The case now is ripe for decision following a bench trial on that claim.

I. INTRODUCTION

The Consolidated Omnibus Budget Reconciliation Act, generally referred to by the acronym "COBRA," was enacted by Congress during 1985, but not signed into law by President Reagan until April 7, 1986.⁶ Among other things, the Act requires "qualifying employers" (generally defined as those persons or entities who or which

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employed twenty or more full-time equivalent employees during the previous calendar year) to offer "qualified employees" (and members of the employee's immediate family) the option to continue coverage under the employer's group health and dental insurance plans whenever a "qualifying event" causes the employee to lose such coverage. See 29 U.S.C. § 1161; see also, e.g., Brown v. Neely Truck Line, Inc., 884 F. Supp. 1534, 1539 (M.D. Ala. 1995). Examples of some of the "qualifying events" listed in the statute include a person's loss of group health or dental insurance coverage due to: (1) the death of the covered employee; (2) a divorce or legal separation of the covered employee that terminates the ex-spouse's eligibility for benefits; (3) a dependent child attaining the age at which she or he is no longer eligible for coverage under the employer's group plans; or (4), as in the present case, the voluntary or involuntary termination of a covered employee for any reason other than "gross misconduct." See 29 U.S.C. § 1162(2); Brown, 884 F. Supp. at 1539; Lloynd v. Hanover, 72 F. Supp. 2d 469, 478 (D. Del. 1999).⁷ COBRA requires that the continuation coverage offered to the qualified employee extend at least eighteen months past the date of the "qualifying event." 29 U.S.C. § 1162(2)(A)(i).

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In addition to requiring that the qualified employee be given the option to extend coverage under the employer's group health or dental insurance plans for at least eighteen months past the date of a "qualifying event," COBRA also mandates that the employee be given notice of his or her option to do so. See 29 U.S.C. 1166. The employer must notify the health plan administrator within thirty days of the "qualifying event" that triggered the termination of the group health or dental insurance coverage of the employee; and, the health plan administrator must then notify the employee of his or her option for extended coverage within an additional fourteen days. See 29 U.S.C. §§ 1166(a)(1)-(2), 1166(a)(4), 1166(c); see also 29 C.F.R. §§ 2590.606-2(b), 2590.606-4(b)(1). When, as here, the defendant-employer also is the administrator of the group health and dental insurance plans, those two periods are added together; in other words, the employer/plan administrator is allowed a total of forty-four days within which to provide notice to the former employee. See 29 C.F.R. § 2590.606-4(b)(2).

If the former employee is not provided the required notice within the time allowed by statute, he or she is afforded a private right of action. See 29 U.S.C. § 1132(c)(1). Hence, this suit.

II. FINDINGS OF FACT

A. Plaintiff's Employment, Termination, and Insurance Coverage

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Plaintiff, Tondalaya Evans, began work at Books-A-Million ("BAM") in November 1997 as a staff accountant, and; she was promoted to the position of Payroll and Insurance Manager in 2000.⁸ For reasons that were not directly at issue during trial, plaintiff's employment with BAM ended on March 27, 2007.⁹

BAM offered group health and dental insurance benefits to its employees through Blue Cross/Blue Shield of Alabama.¹⁰ At the time of her termination, plaintiff was not covered by BAM's group health insurance plan, but she did maintain dental insurance coverage under BAM's group plan.¹¹ She continued to receive dental coverage through BAM until May 30, 2007: two months after her employment ended.¹² Plaintiff remained unemployed until October 22, 2007, when Bruno's Supermarkets, LLC ("Bruno's") hired her as a Payroll Supervisor.¹³ During the nearly five months that plaintiff was not employed, she did not have dental insurance

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coverage; nevertheless, she did not incur any dental bills during that period.¹⁴ Plaintiff obtained dental insurance coverage that was comparable to her benefits under BAM's plan through her employment with Bruno's on December 1, 2007:¹⁵ i.e., eight months after the end of her employment with BAM, and slightly more than a month after her employment by Bruno's.

B. BAM's Managerial Structure and COBRA Notification Process

The relevant managerial structure of BAM during 2007 consisted of the following positions: Vice President of Loss Prevention and Human Resources; Benefits Manager; and Benefits Coordinator.¹⁶ Chad Tice served as the Vice President of Loss Prevention and Human Resources.¹⁷ One of his duties was to oversee the individual who managed insurance benefits, i.e., the Benefits Manager. Kathryn Roberts was the Benefits Manager in 2007.¹⁸

As Benefits Manager, Ms. Roberts' primary duty was to supervise the administration of company benefits, including 401k plans, and group medical, life,

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disability, and dental insurance coverages.¹⁹ Two positions reported directly to Ms. Roberts. One of them was the Benefits Coordinator.²⁰ Starting in March 2007, Ms. Kerry Law occupied that position.²¹ As Benefits Coordinator, Ms. Law enrolled employees in benefit plans, and prepared COBRA notices for persons who left the employment of BAM.²²

BAM's process for determining those employees who were due to receive notice of their right to extend group insurance coverages for a period of eighteen months following the termination of their employment with BAM was unwieldy. Kerry Law manually cross-referenced three different lists in order to determine those employees who should be notified of their rights under COBRA. The first list, called the "blue bar report," was generated by Blue Cross/Blue Shield.²³ The blue bar report listed the names of BAM's employees who were covered under the various group plans insured by Blue Cross/Blue Shield.²⁴ Because the blue bar report "identified every participant that Blue Cross had [on] their account" — i.e., about 1,500

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employees on the medical plan and another 1,600 on the dental plan — it was "quite cumbersome" and, inevitably, several inches thick.²⁵

The second list, known as a "termination report,"²⁶ listed the name of every employee who had ceased employment with BAM, voluntarily or involuntarily, during the previous month.²⁷ Kerry Law personally generated and printed that report from data maintained on BAM's computer system.²⁸

The third list, known as the "premium report,"²⁹ identified those employees who had paid insurance premiums through payroll deductions.³⁰ Apparently, Kerry Law also generated and printed the premium report from data maintained on BAM's computer system, although the testimony was less than clear on that point³¹

In any event, once all of those documents — the blue bar report, the termination report, and the premium report — were compiled, it was Kerry Law's responsibility to manually cross-reference the names listed on each report, determine the BAM employees who should receive a COBRA notice, and then type and mail the notices.³²

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The inefficient, unwieldy process occurred every month.³³ Despite being Ms. Law's direct supervisor by virtue of her position as Benefits Manager, Kathryn Roberts repeatedly confessed that she did not know how BAM maintained records indicating that an employee had received the COBRA notice required by statute.³⁴

C. BAM's Nonexistent COBRA Notice to Plaintiff

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