In a landmark resolution to a closely watched benefits dispute, Performance Food Group Inc. has agreed to pay $4.7 million to settle a proposed class action accusing the national food distributor of illegally overcharging tobacco users in its employee health plan, according to court filings in Virginia federal court.
The settlement, reached after a Sept. 30 mediation session before U.S. Magistrate Judge Mark R. Colombell, closes a case that alleged violations of the Employee Retirement Income Security Act (ERISA).
Plaintiffs Donna Bokma, a current employee, and Daniel Samsil, a former one, filed the lawsuit claiming Performance Food imposed an unfair tobacco surcharge that breached federal nondiscrimination rules.
“Substantial Benefits” for Employees
According to the settlement agreement, both Bokma and Samsil will receive $7,500 each for leading the case. Attorneys will collect no more than one-third of the total settlement, while an independent fiduciary—tasked with reviewing the deal—will be paid up to $25,000.
“Class counsel believe that the settlement will provide substantial benefits to the settlement class,” the filing stated.
The remainder of the funds will be distributed to Performance Food Group health plan participants who paid the tobacco-use surcharge from September 30, 2018, through the court’s preliminary approval of the deal.
While Performance Food continues to deny wrongdoing, the company opted to resolve the claims to avoid prolonged litigation and escalating legal expenses.
