HR Management & Compliance

News Flash: Employer’s Denial Of COBRA Benefits Leaves Court With Bad Taste

A federal court in Delaware has ruled that Hanover Foodsviolated federal law by refusing to offer COBRA benefits to a worker who was fired for leaving onion powder out of a batch of ravioli. The company claimed that Heather Lloynd tried to sabotage the ravioli because she was assigned to work with an employee she didn’t like. Hanover declared her ineligible for COBRA benefits, relying on aprovision of the law which says you don’t have to provide employees the option of continuing health care coverage if they were terminated for gross misconduct. But a federal court ruled that Hanover didn’t have any evidence that Llyond had intentionally sabotaged the ravioli, and it said her act didn’t amount to gross misconduct. Hanover now must pay Llyond $25,250 based on $50 for each day that she should have received benefits—and reimburse her for any medical expenses that she incurred after her termination.

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