Editor of the Labor & Employment Newsletter

Kayra D. Montañez

         
On May 16, 2004, the Department of Labor approved new regulations regarding the Consolidated Omnibus Budget & Reconciliation Act of 1985 (“COBRA”). These new regulations apply to plan years beginning on or after November 26, 2004. (For calendar year plans the effective date is January 1, 2005). The most significant modifications to the regulations are set forth below.

Under the new regulations, employers are required to issue an initial COBRA notice to employees and their qualified beneficiaries within 90 days of the date the employee becomes covered by the plan. The initial notice can be supplied to the employee through the Summary Plan Description (SPD). But, the employer must also issue a separate notice to the other qualified beneficiaries.

In addition, the new regulations clarify the plan’s obligation to establish reasonable procedures where an employee is required to notify the plan administrator of qualifying events, second qualifying events or the beginning or end of a disability. These procedures should be specified in the SPD and include identification of the contact person to whom notice must be given, means by which notice must be given; time limits for notice, and information needed to provide continuation coverage.

Likewise, employees must provide notice of a disability within 60 days. These 60 days begin to run either after the SSA makes a final determination; the date of the qualifying event; date of loss of coverage; or when the beneficiary is informed of his duty to provide notice, whichever event occurs latest.

If COBRA is unavailable or denied, employers must inform the employee within 14 days of receiving notice of a qualifying event, second qualifying event or disability determination. Finally, if coverage will conclude prior to the end of the maximum period of continuation coverage, the employer must notify the employee as soon as practicable.

Quiñones González v. Asoc. Cond. Playa Azul II, 2004 T.S.P.R. 58
In this case, the Supreme Court of Puerto Rico had to resolve the following issue: Whether a union employee can bypass the mandatory arbitration clause in a collective bargaining agreement and claim directly to the courts of law that he has been subject to a discriminatory discharge based on age. The Court held that those employees belonging to a union that are subject to discrimination, will be able to claim directly to a court of law, without having to exhaust any arbitral remedies set forth in the collective bargaining agreement. The Court went on to say that the employee has two forums from which to select: the arbitral forum and the court of law.

Rivera Torres v. Pan Pepín, 2004 T.S.P.R 59
In this case, Pan Pepín terminated an employee after an inspector found out that the employee failed to remove bread that had expired thirteen days ago. This conduct was described as severe in the Employee Manual. The employee questioned the dismissal, and the Supreme Court held that although the conduct had been labeled “severe” in the Manual, the dismissal was without just cause. The employee’s is years of service along with his record, were factors that had to be considered in the decision to terminate him. Thus, the Court held that although there are occasions in which dismissal for the first fault is with just cause, in this case it had been unjust as the company should have considered other factors.

Cintrón Díaz v. The Ritz Carlton, 2004 T.S.P.R. 82
This case had a sole issue: Whether Law No. 69 of July 6, 1985, establishes sanctions against the employer for retaliating against employees who have complained about sex discrimination in internal forums within the company. The Supreme Court determined that Law 69 did in fact protect employees from any retaliatory actions an employer can take after the employee has filed a claim in an internal forum of the Company. The Court held that Law 69’s coverage was greater than the Anti-Retaliatory legislation contained in Law. No. 115 of December 20, 1991.