Save Mart Supermarkets is facing a class action lawsuit alleging that it illegally terminated health benefits for retirees and their spouses. The lawsuit alleges that Save Mart breached its fiduciary duty in April 2022 when it decided to stop paying $500 monthly health reimbursements to the retirees and their spouses, despite having previously represented the benefits would be for life.
California-based Save Mart argued that it had reserved the right to change or stop the monthly contributions at any time, but the court rejected this assertion. The court also found that the suit was not time-barred and that the plaintiffs filed their complaint within ERISA’s three-year statute of limitations. The next step will be to seek class certification so that all retirees who lost their benefits can get relief.
California-based Save Mart Supermarkets has been denied a motion to dismiss a proposed class action lawsuit by a US District Judge, who found that the plaintiffs’ allegations of unlawful termination of health benefits for retirees and their spouses were strong enough to stay in court.
The lawsuit, brought under the Employee Retirement Income Security Act, claims that Save Mart breached its fiduciary duty in April 2022 by deciding to stop paying $500 monthly health reimbursements to retirees and their spouses. Save Mart had previously told the court that it had reserved the right to change or stop the monthly contributions at any time, but the judge found that the plaintiffs had shown they decided to retire early based on the company’s statement that doing so would preserve their spouses’ benefits for life.
The plaintiffs, who filed the suit in August, include four retirees who had worked for Save Mart for between 28 and 46 years. They alleged that Save Mart had promised to provide medical benefits as good as or better than those provided to union employees and that health benefits would be provided to eligible retirees for their entire lives, without disclosing that the benefits could be revoked at any time.
The retirees said that after Save Mart amended the Save Mart Select Retiree Health Benefit Plan in 2016, it told retirement-eligible employees that they would lose medical benefits for their spouses if they retired after Dec. 31, 2017, which caused many of them to retire earlier than they otherwise would have.
The case is Katherine Baker et al. v. Save Mart Supermarkets, case number 3:22-cv-04645, in the U.S. District Court for the Northern District of California. The plaintiffs are represented by Lieff Cabraser Heimann & Bernstein LLP, Bolt Keenley Kim LLP, and Matern Law Group PC.
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