Dr Pepper Accused of Using COBRA Against Striking Workers

CHICAGO (CN) – Eleven Dr Pepper Snapple drivers filed a class action against their employer Tuesday claiming the company illegally forces workers into expensive COBRA health care coverage to break strikes.

(AP Photo/Jim Cole, File)

Jeremey Yancey and 10 other plaintiffs are among 165 workers represented by Teamster Local Union 727 who began a strike at The American Bottling Co. facilities in Northlake and Harvey, Ill., on May 22.  Among other grievances, the drivers say that the Dr Pepper Snapple subsidiary does not pay them as much as drivers for its competitors, including Coca-Cola and Pepsi.

According to their class action filed Tuesday in Chicago federal court, while it is legitimate for employers to terminate health care plans during a strike, Dr Pepper Snapple is not permitted to automatically enroll workers in coverage under the Consolidated Omnibus Reconciliation Act, or COBRA, for the duration of a strike.

The workers say that Dr Pepper Snapple, through The American Bottling Co., sent a letter on the day the strike began informing them that it would suspend their medical benefits until they return to work and that it had automatically enrolled the drivers in COBRA coverage. Family coverage is more than $350 a week, according to the letter cited in the lawsuit.

The workers and their families have 65 days to decide whether to elect COBRA coverage and another 45 days to make their first payment. Dr Pepper, however, allegedly ignored that grace period and “unilaterally usurped” plaintiffs’ rights by electing coverage for them in violation of the Employee Retirement Income Security Act, or ERISA.

Federal law “allows an employer to terminate health coverage during a strike, but it does not permit the employer to use COBRA as a cudgel to win the strike,” according to the 16-page complaint filed by attorney Linda Martin in Philadelphia.

Teamsters Local 727 said in a news release Tuesday that The American Bottling Co. had filed a motion for a temporary restraining order and preliminary injunction against the union to stop members from picketing and handbilling. A judge was set to hear the motion Tuesday morning but the company has asked the court to reassign the case to a different judge, according to the union.

“Instead of spending time and money working to bargain in good faith, and coming back to the bargaining table, this multi-billion dollar corporate bully is choosing to spend money on expensive lawyers, unnecessary security, and baseless legal actions,” union executive John Coli Jr. said in a prepared statement.

On May 20, the drivers declined the company’s final contract offer which would have raised wages but would have fallen short of the hourly rate offered by competitors, according to the Chicago Tribune. The workers have been driving without contracts since May 1, the paper reported.

The 150 drivers in the proposed class each seek statutory penalties of $110 per day and a court order that prevents Dr Pepper Snapple from using a “defective” COBRA notice against striking workers.

Neither Dr Pepper Snapple nor Martin immediately responded Tuesday to requests for comment.

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