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Coca Cola Faces ERISA Class Action Lawsuit

By Laura Strachan, Esq. on August 31, 2010 | Last updated on March 21, 2019

Soft drink giant Coca Cola has recently found itself in the middle of a large ERISA class action lawsuit. The suit alleges that Coca Cola violated ERISA when it cancelled the health care plans of almost 500 employees, following an ongoing strike that charges the company with employee surveillance, intimidation, and bad faith bargaining, reports the Star Global Tribune.

ERISA, which stands of the Employee Retirement Income Security Act, is a federal law that promulgates minimum standards for employee health plans (among other things) in private industries. The general purpose of ERISA is to protect the individuals that are enrolled in the plan. There is an important distinction to take note of: while ERISA does not require an employer to establish a pension or health plan for its workers, once it does, the employer must meet its standards. In the case of Coca Cola, there was a health care plan in place and, by cancelling it, the company could be found in violation of the Act. Although the workers allege a pretty substantial motive on the part of Coca Cola, the crux of the class action really revolves less around retaliation and more around ERISA violations.

Seattle-based attorney Dimitri Iglitzin is quoted by the Tribune:

"In my almost twenty years of representing workers and unions in labor disputes, it's hard to think of any past instance where I have seen an employer retaliate against its striking workers in a manner as egregious as what Coca Cola Bottling Company has done here. Cutting off the medical benefits to more that 500 workers, knowing that many of them rely on those benefits on a day-to-day basis and will be irreparably harmed if they lose those benefits is a brutal, full-scale attack by Coke on its own workers. "

Violations of the federal law can carry civil and criminal penalties.

Coca Cola's response to the class action was fairly simple -- as long as the employees are on strike (and thus, not working for the company), they are not eligible for health care coverage. The striking workers and Coca Cola are scheduled to meet later this week.

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