First of its Kind Tobacco Surcharge Ruling Secured for Casino Workers in Lawsuit Against Penn National


On the heels of a string of significant victories in wage and hour litigation against casino operators, Stueve Siegel Hanson recently secured class certification for at least 1,500 casino workers who had a tobacco surcharge deducted from their wages.

The ruling is believed to be the first of its kind involving a tobacco surcharge Plaintiffs allege violates ERISA.


Originally filed in March 2020, the lawsuit stems from Penn National Gaming Inc. imposing a health insurance penalty on smokers who participated in the casinos' employee health plans. Employees allege the surcharge violates the Employee Retirement Income Security Act of 1974 (ERISA) because the casino operator failed to provide notice of an alternative to avoid the surcharge; and for two years failed to provide a reasonable alternative standard that offered the full reward of the program that non-smokers received (i.e. avoiding the surcharge in its entirety). 

class certification

On November 16, 2021, U.S. District Judge Stephen Bough issued an Order granting a motion the firms filed on behalf of employees that certified:

  • A nationwide ERISA class of group health plan participants from 2016 to 2020 who had the tobacco surcharge deducted from their wages; and 
  • A nationwide ERISA sub-class of employees in 2019 and 2020 who were not offered the “full reward” of avoiding the tobacco surcharge in its entirety if they completed a tobacco cessation program. 

On the Court's decision Stueve Siegel Hanson attorneys George Hanson and Alex Ricke, who are representing the plaintiffs, told KCUR:

“In some of these casinos, smoking continues to be permitted,” Hanson said. “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.”

“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,” Ricke said.

The ruling was reported on by additional publications including Law360, and Bloomberg Law (Media Roundup). 

This order follows another decision in the same case certifying classes and collectives of employees at Penn National Gaming operated Argosy Casino Riverside and Hollywood Casino St. Louis alleging tip pool violations and unlawful wage deductions to obtain and maintain state-issued gaming licenses. Read more about that decision here

This case is part of a larger effort by the firm to investigate potential claims against employers who deduct additional health insurance premiums, fees, or surcharges for tobacco users. Learn more about the firm's tobacco surcharge wage deduction investigation here

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