Casino Workers Take Penn National to Court Over Cigarettes

At least 1,500 people working in casino jobs in Missouri, Kansas and other states will be part of a class-action lawsuit alleging illegally lower wages because they smoke. According to NPR affiliate KCUR, US District Judge Stephen Bough, Kansas City, granted workers certification as class members for their lawsuit against Penn National Gaming. This gives them an important step closer toward the recovery of their money, should the court agree.

Penn National Lit Over Smoking Lawsuit

Penn National has 18,000 workers and operates 41 casinos in 19 states. Argosy Casino Riverside in Missouri; Hollywood Casino St. Louis; Hollywood Casino at Kansas Speedway Kansas City, Kansas are the company’s subsidiaries.

Three casino workers filed the lawsuit against Platte County Circuit Court in March 2020 on behalf of others. The casino operator then moved the matter to federal court, as it was able to do, one month later.

Penn National, which is also facing backlash over its relationship with Dave Portnoy and Barstool Sports, was additionally accused in the lawsuit of operating an illegal tipping service and illegally deducting from workers’ salaries the cost it took for casinos to renew their workers’ gambling licenses. These claimants have been certified as one class by the parties.

Court Agrees In Principle With Suit

Tuesday’s ruling focuses upon whether the casinos had violated ERISA (The Employee Retirement Income Security Act of 1974), a federal law that governs employee health plans. Penn National allegedly failed to inform plan participants about an alternative way to avoid this surcharge.

Although workers could avoid the surcharge for completing a smoking cessation program, they weren’t reimbursed by the company for any surcharges they were charged before they completed the program. The workers claim that this violated ERISA’s requirement to notify participants of a “reasonable alternative standard” in order for them to qualify for a discount or rebate.

Bough certifies the class consisting of all workers who benefited from Penn National’s health plan, which was offered from 2016 to 2020. Workers were also subject to a tobacco surcharge that was deducted from their wages. The class may have at least 1,500 members.

Alex Ricke, an attorney from Stueve Segel Hanson, who represents the workers, said that not a single Penn National employee who has completed a smoking cessation program in the last five-plus decades, has managed to avoid the surcharge.

Ricke stated, “Part of the reason something like a notice is so important here, especially if you’re legitimately concerned about your employees’ health, is you want them to complete the tobacco cessation program.”

Another Stueve Siegel Hanson attorney, George Hanson, stated that he believes Bough’s ruling was the first of its kind involving a tobacco surcharge that allegedly is in violation of ERISA. He accused Penn National of penalizing smokers working in places where smoking can be prevalent, adding, “In some of these casinos, smoking continues to be permitted. So just think of the irony of penalizing a worker for smoking when they are all smoking in some way in at least those facilities which permit patrons to light up.”

Penn National’s attorneys did not respond to a request by KCUR for comment.