Nordstrom and LHC Group Settled Tobacco Surcharge Lawsuits
The companies agreed to pay settlement funds to thousands of employees who faced penalties for tobacco use.
Updated on Sept. 22, 2026 in Nursing Jobs
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Nordstrom and LHC Group have reached class action lawsuit settlements regarding the charging of tobacco surcharges to employees. The agreements provide financial compensation to more than 2,000 workers across both companies who were penalized for smoking.
Why it matters
These settlements reflect a broader legal trend where employers face litigation for imposing extra healthcare premiums on workers based on their tobacco use. The legal actions challenge the practice of penalizing employees through these specific types of surcharge policies.
Nordstrom reached a $450,000 settlement while LHC Group agreed to pay $800,000 into a fund for their respective employees. Each settlement affects more than 1,000 individuals who were charged a $20 biweekly tobacco surcharge.
The players
Nordstrom
Nordstrom is a major American luxury department store chain that maintains retail locations across the United States.
LHC Group
LHC Group is a national provider of in-home healthcare services including home health and hospice care.
The details
Both companies were sued for charging workers additional healthcare premiums as a result of their tobacco consumption. The lawsuits highlight a common industry practice where employers implement surcharges to offset costs associated with smoking habits among staff.
Timeline
The settlements were reached on September 21, 2026.
Market Landscape
This litigation follows a pattern set by the documented trend of more than 80 employers facing scrutiny for penalizing tobacco use. These settlements indicate an increasing risk for companies that utilize surcharges as part of their employee healthcare benefit structures.
Employees at these firms may soon receive notice regarding their eligibility for settlement payouts. Workers at other companies should monitor their pay stubs to determine if they are being assessed similar surcharges for tobacco use.
The takeaway
These settlements serve as a reminder for employees to review their company healthcare benefit details for potentially contestable surcharges. Understanding the legality of premium penalties can help workers identify when their compensation is being unfairly impacted.
Further reading
For more on shifts in healthcare labor policies, visit Nursing Jobs.
Source note: This article includes information reported by Bloomberglaw.
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