Dave & Buster’s Sued for Side-Stepping Employer Mandate

A lawsuit filed in federal court in the state of New York accuses restaurant chain Dave & Buster’s of cutting employees’ hours to avoid having to provide health insurance under the Affordable Care Act (ACA).

The lawsuit alleges violation of Section 510 of the Employee Retirement Income Security Act (ERISA), which prevents employers from interfering with their employees’ receipt of benefits governed by ERISA, such as health insurance. However, employers can save money by reducing employees’ hours, as ACA penalizes large employers that fail to provide health benefits to employees who work at least 30 hours per week.

The proposed class consists of some 10,000 workers. The lawsuit’s lead plaintiff alleged her hours were reduced from more than 30 per week to about 17 in the company’s effort to avoid ACA’s mandate. Dave & Buster’s then dropped her from its health plan.

The complaint points to the company’s recent Securities and Exchange Commission filings, in which Dave & Buster’s stated that ACA compliance would increase corporate expenses.