Pepsi Employee Sues Over Health Insurance Surcharge for Tobacco

Oct 7, 2024 | News

A Pepsi employee, Krista Noel, has filed a proposed class action lawsuit against PepsiCo Inc. in New York federal court, alleging that the company’s “tobacco surcharge” on employees who use tobacco products violates ERISA’s anti-discrimination provisions. Noel claims that Pepsi fails to adequately inform employees about a wellness program alternative to avoid the surcharge, which was $900 annually in 2023.

The lawsuit alleges that Pepsi’s program violates ERISA by not offering full reimbursement of the health insurance surcharge for those who complete the program after a certain date and by not clearly communicating the option to avoid surcharges through reasonable alternative standards. Noel seeks to represent a “tobacco surcharge class” of U.S. individuals who paid unreimbursed tobacco surcharges while participating in Pepsi’s health or welfare plans. The suit claims unlawful imposition of a discriminatory tobacco surcharge, failure to notify of alternative standards, and breach of fiduciary duty. Noel is represented by attorneys from Siri & Glimstad LLP, specifically Lisa R. Considine, David J. DiSabato, and Oren Faircloth.

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