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Eleventh Circuit Adopts Elastic Standard for COBRA Improper-Notice Claim Accrual

Courts often hold that parties are presumed to know the law.  And sometimes courts say otherwise. That's as much sense as I can make of the Eleventh Circuit's recent decision in Cummings v. Washington Mutual, Case No. 10-10706 (11th Cir, August 22, 2011). 

In Cummings, the court addressed the issue of when the plaintiff's improper-notice claim under COBRA accrued.  Under COBRA, an employer -- through its healthcare administrator -- must notify an employee of his right to continue his healthcare coverage after the termination of his employment. 29 U.S.C. §§ 1163(2), 1166. The employer must notify its healthcare administrator of the employee's termination within 30 days, § 1166(a)(2).  The administrator then must notify the employee of his continuation right within 14 days, §§ 1166(a)(4)(A), (c). Cummings was terminated from his bank job on March 19, 2007.  Thus, the employer had 44 days, i.e. until May 2, 2007, to notify Cummings of his continuation right: Cummings claimed that he never received a notification about his COBRA continuation right.

In Georgia, where Cummings was employed, a one-year limitations period applies to COBRA improper-notice claims.  The issue in Cummings was when that one-year period began running.  Cummings argued that his claim did not accrue until he learned from his lawyer on March 20, 2008 that his employer had failed to send him notification of his COBRA continuation right. The employer argued that the limitations period began to run on May 3, 2007, the day that the time for notifying Plaintiff expired. Cummings filed his lawsuit on July 24, 2008.

The Eleventh Circuit held that that a COBRA improper-notice claim accrues "when the plaintiff either knows or should know" that his former employer has failed to provide him with the required notice of his continuation right.  This holding is not surprising. As the opinion in Cummings notes, the Eleventh Circuit has applied the "knew or should have known" standard in other contexts. 

There was no allegation that Cummings actually knew on May 3, 2007 that his employer had failed to give him notice.  So the question was, should Cummings have known on May 3, 2007?

The Eleventh Circuit said no, stating that:

The COBRA notification requirement exists because employees are not expected to know instinctively of their right to continue their healthcare coverage. To begin the statute of limitations when the notification period expires, as Defendant urges, would create the possibility that the limitations period will run out before a plaintiff even knows he has been injured... [T]he mere expiration of the notification period on 3 May 2007, without more, was insufficient to give Plaintiff reason to know his notification right had been violated.

This holding is surprising.  Employment laws are complex and often misunderstood, even by practicing lawyers (or at least those who do not specialize in employment law).  Knowledge of employment laws, or the violation of such laws, can rarely be said to be "instinctive."  Yet in construing statutes of limitation, courts usually indulge in the presumption that parties do know the law.  Otherwise, the "knew or should have known" standard becomes elastic to the point of absurdity:  Only when the employee gets around to consulting an employment law specialist "should" he know that his rights have been violated.  This principle seems to run contrary to the purpose of statutes of limitation: to bar stale claims and protect expectations of parties that have settled over time.  See Nat'l Parks & Conservation Ass'n v. TVA, 502 F.3d 1316, 1326 (11th Cir. 2007). Nevertheless, at least for COBRA improper-notice claims in the Eleventh Circuit, this elastic standard now determines when the statute of limitations begins running.



Filing Complaint with DOL Doesn't Preclude FMLA Lawsuit, Says Eleventh Circuit

The Family and Medical Leave Act authorizes employees to file a complaint against their employer with the Department of Labor, which can then file an enforcement action.  The FMLA also permits employees to file suit directly against their employer in court. But what happens if an employee does both?  That was the question posed in a recent decision by the Eleventh Circuit Court of Appeals, Spakes v. Broward County Sheriff's Office (11th Cir. January 31, 2011).

The employer argued that the FMLA's implementing regulations require an employee to choose either a DOL complaint or a private lawsuit, and that an earlier-filed complaint with the DOL bars a subsequent private lawsuit.  Specifically, the employer relied on 29 CFR 825.400(a), which provides:

(a) The employee has the choice of: (1) Filing, or having another person file on his or her behalf, a complaint with the Secretary of Labor, or (2) Filing a private lawsuit pursuant to section 107 of FMLA.

This language seems pretty clear: the phrase "the employee has the choice of..." seems to require, well, that the employee choose one or the other. On its face, then, the employer's argument seems to have merit.

The problem with the employer's argument, according to the court, was that the regulations are inconsistent with the statute. The FMLA itself provides that an employee's right to bring an action is terminated only upon the filing of a complaint by DOL. That did not happen here, so the court held that the employee had the right to bring a private lawsuit.  "[W]here the statute provides a right to a cause of action and lists the limitations, regulations cannot contravene the statute by terminating the right where the statute did not so authorize," wrote the court.  In other words, as any first year law student can tell you, the statute trumps the regulations. And in this case, that means the employer loses.  


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Michael W. Casey III, Kevin E. Vance, Mark J. Beutler, and Teresa M. Maestrelli practice labor and employment law, with a particular focus on labor and employment litigation, including Title VII, ADEA, ADA, Florida Civil Rights Act, and whistleblower claims, as well as non-compete litigation, in state and federal trial and appellate courts in Florida and throughout the United States. They also represent employers before the National Labor Relations Board (NLRB), the National Mediation Board (NMB), the U.S. Department of Labor, including the Wage and Hour Division and the Occupational Safety and Health Administration (OSHA), the Equal Employment Opportunity Commission (EEOC), and various state and local agencies, as well as in arbitrations, collective-bargaining negotiations and union representation elections. Hector A. Chichoni practices in the area of US and global immigration law. He chairs Duane Morris's Florida Immigration Practice. The editors of Chambers USA 2010 also selected Mr. Chichoni as a "Leader in the Immigration Field." He has represented a vast number of corporate and individual clients throughout his career ranging from premier US health care organizations, Fortune 100 and Fortune 500 companies, multinational corporations and universities to doctors, professors, researchers and students. His international experience includes handling matters relating to export controls and global corporate compliance and business transactions. He has represented clients in a wide variety of cases before the US Immigration Court.
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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.