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Michaela May

In theory, employees terminated for “gross misconduct” are not entitled to COBRA benefits at all. But that exception sets the bar pretty low, since:
(1) The conduct must be pretty egregious to be “gross misconduct”. See Nero v. Univ. Hosp. Mgmt. Servs. Org., 23 F. Supp. 2d 652, 655 (S.D.W.Va. 1998) (“conduct is gross misconduct if it is so outrageous that it shocks the conscience”); Richard v. Ind. Commercial Elec. Corp., 337 F. Supp. 2d 279, 282 (D. Mass. 2004) (indicating gross misconduct is something “flagrant and extreme” and “out of all measure; beyond allowance; not to be excused; flagrant; shameful”).
(2) Some courts have held that an employer must give COBRA benefits to an employee whom the employer honestly believed was engaged in gross misconduct but whose behavior actually fell short of the standard. See Kariotis v. Navistar Int’l Transp. Corp., 131 F. 3d 672, 679 (7th Cir. 1997) (holding that COBRA requires “fact (not the suspicion) of gross misconduct”); Richard, 337 F. Supp. 2d at 281 (“an employer must have more than an honest, actual belief that an employee engaged in such misconduct”) (emphasis added); and
(3) The potential cost to the employer for not giving COBRA notice and benefits, even in good faith, is high. See, e.g., 26 U.S.C. § 4980B(b)(1), (c)(3) (imposing $100-per-day excise tax for failure to comply with COBRA requirements).

Jay Shepherd

Kudos to Michaela May, a third-year student at Boston University School of Law, on the incredibly scholarly comment immediately above. That's solid work. If you're a law firm and are looking for a new associate in August/September, email me and I'll send Michaela to you.

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