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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.

The ERISA Challenge: Fees and Fairness

Filed in September 2024, Bokma’s original complaint—and later joined by Samsil—claimed the company’s health plan violated ERISA’s nondiscrimination provisions, which forbid health-related premium differentials unless participants can avoid them through a wellness program.

The plaintiffs argued that Performance failed to clearly explain its tobacco cessation program and refused to reimburse employees who had already paid surcharges before joining the program. They further accused the company of breaching fiduciary duties by retaining those surcharge funds to reduce its own plan contributions.

Performance Food countered the suit in a December motion to dismiss, asserting that Bokma and Samsil lacked standing, since their arguments relied on Department of Labor regulations rather than the statute itself. The company leaned on the Supreme Court’s Loper Bright Enterprises v. Raimondo ruling, which dismantled the Chevron deference, a legal doctrine that had previously allowed courts to defer to agency interpretations.

Judge Novak’s Decision and Legal Showdown

However, U.S. District Judge David J. Novak rejected Performance’s motion in May, ruling that the plaintiffs had plausibly alleged harm from the $600 annual tobacco surcharge and the noncompliance of the company’s wellness program.

Judge Novak emphasized that the Loper Bright decision did not apply, since Performance Food had failed to show any ambiguity in ERISA’s language itself.

Legal Teams and What Comes Next

Neither side immediately commented on the settlement Tuesday.

Plaintiffs Bokma and Samsil are represented by Christopher Williams, Oren Faircloth, and David J. DiSabato of Siri & Glimstad LLP.
Performance Food Group is represented by Heidi E. Siegmund and Bret G. Daniel of McGuireWoods LLP.

Once finalized, the Performance Food $4.7M settlement will mark a notable victory for employees asserting their rights under ERISA and signal a warning shot to corporations about the high cost of health plan discrimination.