A federal judge with the U.S. District Court for the Northern District of Illinois has certified a class action lawsuit under the Employee Retirement Income Security Act (ERISA) against UNITE HERE Health, alleging fiduciary breaches in how administrative expenses were allocated across plan units. The decision was made public.
According to a Memorandum Opinion and Order from the United States District Court, Northern District of Illinois, concerning a class action lawsuit, the plaintiffs, current and former participants of the UNITE HERE Health (UHH) plan, allege that the Board of Trustees of UHH breached its fiduciary duties under ERISA. The plaintiffs argue that UHH overcharged two of its plan units, Units 178 and 278, by disproportionately allocating administrative expenses compared to other units, resulting in excessive costs for those participants.
The court is addressing a motion for class certification. The plaintiffs seek to certify a class of individuals from Units 178 and 278 who were participants between March 2016 and the present. They claim that UHH’s fiduciary actions—particularly in the allocation of administrative expenses—led to unfairly high costs for participants in these units. "They said that UHH unfairly burdened these participants with a larger share of the administrative expenses," while Unit 150, a larger unit, received a discount in its allocation.
According to court documents, from 2016 to 2023, participants in Plan Units 178 and 278 were assessed administrative costs ranging from $1,014.82 to $2,152.80 per person compared to $529.36 to $805.84 for participants in Unit 150, the Las Vegas-based Culinary Health Plan. This disparity stems in part from a policy that discounts Unit 150’s contributions for administrative costs, forcing other units to shoulder a disproportionate share despite receiving fewer benefits.
The court analyzed whether the proposed class meets the requirements under Federal Rule of Civil Procedure 23(a) for class certification, focusing on numerosity, commonality, typicality, and adequacy of representation. It discusses evidence supporting the claims and determines that the class may be certified under Rule 23(b)(3), as common questions predominate over individual ones.
Judge Rebecca R. Pallmeyer is noted as being Chief Judge of the U.S. District Court for the Northern District of Illinois since becoming its first female leader in history in 2019 after more than two decades on the federal bench. A graduate of Valparaiso University and the University of Chicago Law School, she previously served as a Magistrate Judge and administrative law judge and worked in private practice.