Limiting Employee Hours To Avoid ACA Could Violate ERISA, Court Rules

In a first-of-its-kind decision, a federal court recently upheld the right of employees to sue their employer for allegedly cutting employee hours to less than 30 hours per week to avoid offering health insurance under the Affordable Care Act (ACA). Specifically, the District Court for the Southern District of New York denied a defense Motion to Dismiss in a case where a group of workers allege that Dave & Buster's (a national restaurant and entertainment chain) "right-sized" its workforce for the purpose of avoiding healthcare costs.

Although this case is in the very early stages of litigation and is far from being decided on the merits, you should monitor this novel legal approach for developments to determine whether you need to take action to deter potential copycat lawsuits.