Making a Disability Claim as a Starbucks Employee

Starbucks is headquartered in Washington, but has recently opened a secondary headquarters in Nashville, Tennessee where it seeks to relocate large numbers of corporate workers.

For Starbucks employees, it’s crucial to understand your rights under the Employee Retirement Income Security Act of 1974 (ERISA), especially concerning disability benefits. ERISA provides protections for employees participating in employer-sponsored benefit plans, including the right to appeal denied claims and to file lawsuits for wrongful denial of benefits. Starbucks employees need to understand that if they can demonstrate they were disabled before their last day of work, they are covered under Starbucks’s short and long term disability plans even if they have already left Starbucks or been notified of termination.

Many employees have health issues that are significant enough to qualify as a disability, but push through the pain because they love their career, or need the money, or both. The fact that you worked while disabled does not disqualify you from making a claim now, it simply demonstrates your commitment to working and the effort you exerted to keep your employment as long as you could.

The Starbucks Short Term Disability Plan

Starbuck’s short term disability plan is administered by Sedgwick Claims Management Services. Starbucks pays the benefits for the short term disability. The short term disability plan is an ERISA plan.

Under the short term disability plan, employees can receive up to 25 weeks of paid leave after a one-week elimination period. Starbucks will pay 70% of an employee’s average weekly earnings up to $8,000 per week under a short term disability claim. Average weekly earnings are defined as: “the average weekly gross pay you received from Starbucks over 26 weeks before the date you became disabled. The 26 weeks will include 13 full pay periods for partners paid bi-weekly and 26 full pay periods for partners paid weekly.” For employees at a Vice President level or above, “your average weekly earnings are defined as your weekly gross base salary in effect on the date you became disabled plus your average performance bonus over the 12 months preceding the date you became disabled.”

If you live in a state that offers paid disability, Starbucks will require you to apply for that disability benefit from the state, and will deduct the amount paid by the state from what it pays you. Coverage begins on your first day of employment and applies to all employees working at least 20 hours a week.

Under the short term disability plan, an employee is “totally and medically disabled” when “you are unable to perform the essential duties of your job with Starbucks, either full-time or part-time.” The short-term disability plan requires the employee to “require the ongoing care of a healthcare provider, defined as “any physician who is duly licensed and acting within the scope of his/her practice; a nurse practitioner or nurse midwife who is licensed to practice under state law and who is performing with the scope of his/her practice; or a psychologist licensed in the state of practice with a doctorate degree in psychology.”

The Starbucks Long Term Disability Plan

Starbucks’ long term disability plan is insured and administered by Unum Life Insurance Company (“Unum”). That means that Unum pays the benefits it is reviewing. The long-term disability plan is insured by a policy issued by Unum, and is subject to ERISA.

The long term disability plan takes over at 26 weeks. To qualify for benefits under the long term disability (“LTD”) plan, employees must be able to demonstrate that they were disabled throughout the “elimination period,” which is 180 days, and ties to the 180 days of the short term disability policy. The LTD policy pays 60% of the employee’s “average monthly earnings,” defined as “the average monthly gross pay you received from Starbucks over 26 weeks before the date you became disabled plus your average performance bonus, if applicable, over the 12 months immediately preceding the date you became disabled.” It does not include commissions, tips, overtime, or any other type of bonus or extra compensation.

The 60% of earnings is capped at $20,000 per month for most corporate employees. For employees at the Vice President level or above, it is capped at $30,000 per month.

Benefits are paid to age 65. Premiums for the LTD benefit are paid by the employee unless the employee is a Vice President level or above.

Unum can require you to apply for Social Security Disability Insurance benefits and offset them against what it owes you.

If you become disabled in your first year of employment with Starbucks, your LTD coverage is subject to a pre-existing exclusion. That means the condition is not covered if the insured “received medical treatment, consultation, care or services including diagnostic measures, or took prescribed drugs or medicines in the 3 months just prior to your effective date of coverage; or you had symptoms for which an ordinarily prudent person would have consulted a healthcare provider in the 3 months just prior to your effective date of coverage; and the disability begins in the first 12 months after your effective date of coverage.”

For the first 24 months of long term disability, the employee has to prove the inability to perform the material and substantial duties of their “own occupation.” After 24 months the employee must demonstrate the inability to perform the duties of any gainful occupation for which the employee is reasonable fitted by “education, training, or experience” which pays at least 80% of the employee’s prior salary.

For Vice Presidents and above, the policy only requires disability from “your regular occupation.”

The policy limits benefits to 24 months if the disability is based on self-reported symptoms or caused by or contributed by a mental illness. “Self-reported symptoms” is defined as “manifestations of your condition which you tell your physician, that are not verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine.” Examples given include “headaches, pain, fatigue, stiffness, soreness, ringing in ears, dizziness, numbness and loss of energy.”

The policy requires that the claimant receive treatment from a “physician,” defined as a person who is “a legally qualified medical practitioner according to the laws and regulations of the governing jurisdiction.”

What do you need to demonstrate disability, especially if you were working full time at the same time you are claiming disability? You need to demonstrate that your treating physician agrees that you had restrictions and limitations that kept you from performing the materials duties of your own occupation as of your last day of work, and you have to have been treating for the symptoms causing those restrictions and limitations as of your last day of work. You need to demonstrate “regular” treatment by a medical professional for the condition that keeps you from working.

Courts understand that many people push through disability and try to work anyway because they love their job, or they need the income, or both and have routinely held that the fact that an employee was working does not bar them from claiming disability at the same time. Employees can also make claims for disabilities that arose after they learned of the termination of their position but before their last day, if they have medical support. That includes depression and anxiety, if an employee is diagnosed with and actively treating for such a condition before their last day of work.

All Starbucks Corporate Employees Nationwide Can and Should Pursue Their ERISA Disability Insurance Claims in Washington Federal Courts

The Starbucks long term disability plan is governed by ERISA. Unum routinely denies many disability claims, especially those involving mental health or “self-reported” symptoms such as pain, migraines, cognitive issues, or fatigue. Insureds are required under ERISA to appeal a denial, but after one appeal, there is no further option for reconsideration under the long term disability plan. The next step is litigation. Unum, like most insurers, is often interested in buying out the value of the insured’s claim, including future benefits, at litigation. This enables some insureds to obtain a lump sum settlement. Unum looks at the total claim and the litigation, including the court where the litigation is filed and the judge assigned, when making determinations about settlement.

While under ERISA an insured can technically bring suit anywhere in the US, Unum will push back on most suits if there is not a specific connection, arguing successfully that the court should not bear the cost of the litigation without a clear connection. Under ERISA, there are three locations where the insured can explicitly bring suit – if it is filed where Unum is headquartered, if it is filed where the insured lives, or if it is filed where the disability plan is administered. Starbucks administers the LTD Plan in the Western District of Washington in the Ninth Circuit. This is arguably one of the most favorable districts in the country for disabled plaintiffs.

Many insurers include language in their disability policies that grant them “discretion” in deciding claims. Courts interpret that language to mean that the court must accept the insurer’s decision unless it is clearly “arbitrary and capricious.” The Starbucks policy includes this language. This language is banned in Washington and not enforceable there.

Washington also embraces the doctrine of notice prejudice. This means that unless the insurer can demonstrate actual prejudice from a late-filed claim, the insurer must accept and consider that claim. Many states will allow an insurer to deny a claim as late-filed automatically. Where insureds often do not have a diagnosis for medical issues in a timely period and only receive a diagnosis after they leave employment, insurers in many states have been able to avoid responsibility for those diagnoses by pointing to the fact that they were late-filed. When suit is filed in Washington, the insurer cannot escape its responsibility for the claim even if it is filed late.

A disability claim can be worth a seven figure payout in litigation, depending on your age and benefit amount. Like any major financial decision, sophisticated white collar professionals should evaluate their plan to pursue these benefits in advance, including the jurisdictions that are most supportive to their claims. A Starbucks employee who lives in Tennessee, for example, has a 28% chance of being awarded benefits by the courts there. In Washington, it’s a 62% chance. You can double the strength of your litigation by making strategic decisions in advance.

If you are a Starbucks employee in Tennessee, you can still file suit in Washington and take advantage of the more favorable laws and courts for your litigation – if you have an attorney admitted to practice in Washington.

What Do You Need to Make a Late-Filed Claim?

For any claim, the support of your treating physician is paramount. You cannot make a successful disability claim if your doctor or therapist does not believe that you are disabled. Your treating physician does not need to be a medical doctor. Under the Plans, you need to be seeing anyone licensed to practice the service provided. This can be a naturopath, a therapist, a psychologist, an osteopath, or other doctor. If you are a Starbucks employee who has received notice of termination but you are still employed, a claim will not be considered late-filed. If your doctor agrees that as of your last day of work you had restrictions and limitations, whether mental or physical, that precluded you from performing the material duties of your job, you can apply for disability benefits at Starbucks.

If you are making a claim after you have already left work, you need to demonstrate that you were treating for the symptoms that disabled you on or prior to your last day of work. You do not need to show a diagnosis, but you do need to demonstrate that you were experiencing symptoms of the disability and that you sought treatment for those symptoms, so medical records need to show treatment. Your treating medical practitioner will also have to be willing to complete paperwork confirming your disability and that it began on or prior to your last day of work. With that information, Unum will be required to accept and review your claim even if you last worked at Starbucks months or even years ago.

Obtaining Legal Counsel During the Appeal

Many insureds appeal the denial of their benefits themselves. Unfortunately, if the appeal is denied and litigation is required, your attorney will not be able to improve your position. Under ERISA, in the Ninth Circuit there is usually no discovery in litigation. A judge rules on the claim, and the judge is limited to the information in the claim file. That means that the appeal is the insured’s only chance to get all information into the file that would benefit the judge. This includes declarations under penalty of perjury from witnesses, additional medical records, letters from the treating physicians, independent testing to support the disability, issues with Unum’s doctors, and medical literature to educate the judge about the insured’s disability and diagnosis. The appeal isn’t just for Unum- it is the insured’s one chance to strengthen the file for litigation. Your attorney needs to be involved in the appeal.

An appeal within 180 days of denial is required. The insured cannot bring suit if there is no appeal and cannot appeal again or re-file the claim. If you fail to appeal under ERISA, you permanently waive the claim. As soon as a denial is received, an insured should contact counsel for assistance to give counsel time to perfect your appeal.

Where Monahan Tucker Law has attorneys and offices in Washington, California, Arizona, Oregon, and Nevada, it can assist Starbucks employees anywhere in the country and if necessary bring suit for its clients in the Western District of Washington, because our attorneys are admitted to the court. We have deep and broad experience with the Starbucks disability policies and with Unum, and can help you through this difficult and stressful time and provide you the strongest tactical advantages in your claim or litigation.