Waffle House is facing a proposed class-action lawsuit alleging it illegally charged employees who use tobacco an extra $92 per month for health insurance. The suit, filed by a former server, seeks more than $5 million and claims the restaurant giant violated the Employee Retirement Income Security Act (ERISA).
The complaint, lodged in the U.S. District Court for the Middle District of Georgia, alleges that Waffle House imposed these tobacco surcharges without providing workers a meaningful opportunity to avoid the fees by participating in a smoking-cessation program. Corkeitha Hicks, who worked as a server in Forsyth, Georgia, claims she paid the surcharge after enrolling in the company's health plan. According to the lawsuit, these deductions amounted to approximately $23 per week, totaling $92 per month or $1,104 annually.
The lawsuit aims to represent Waffle House employees nationwide who have paid the tobacco surcharge over the past six years. The company, which operates over 2,000 restaurants in 25 states, requires employees enrolling in its health insurance plan to disclose their tobacco use. Those who disclose tobacco use are charged the additional monthly fee for their coverage.
Hicks contends that the surcharge violates federal benefits law because employers can only charge smokers more if they also offer a qualifying wellness program that allows employees a practical way to forgo the fee. While Waffle House does offer a smoking-cessation program called 'Quit for Life,' the lawsuit alleges that the program's structure made it difficult to avoid the surcharge. According to the complaint, employees who completed the program by a specific deadline, September 30, could have their surcharges refunded for that plan year and avoid future fees. However, those who finished the program after that date could only prevent future surcharges and were not reimbursed for payments already made.
Furthermore, the lawsuit alleges that Waffle House failed to clearly inform employees in all its health plan materials about the possibility of avoiding the surcharge by completing the program. The complaint also asserts that Waffle House improperly retained the revenue generated from the tobacco surcharge rather than using it for the employee health plan. The suit characterizes these practices as a "revenue-generating scheme disguised as a health initiative."