The case of Franco Santos v. Goldstar Transport, Inc., is instructive of companies which are under “common control.” In that case, a former employee took her employer, Goldstar Transport, Inc., to court claiming that the company had not provided proper election notices required under the Consolidated Omnibus Budget Reconciliation Act, commonly known as “COBRA.” While Goldstar admitted that it did not send the notice, it claimed that it did not have to, as Goldstar employed fewer than the minimum number of employees (20) to trigger COBRA’s applicability.
The court, in determining whether or not the employer, Goldstar, did or did not employ the requisite 20 full-time equivalents, took into consideration other companies which were under the common ownership of the owners of Goldstar Transport, Inc.
While the court found that Goldstar Transport employed 19.4 full-time equivalents, and therefore did not violate COBRA regulations, such a holding should be small comfort for other companies which are under “common control” of an ownership group.