Lawsuit takes issue with O'Reilly Automotive's tobacco policy

Last edited 2:16 p.m., Jan. 28, 2026 [Editor's note: A statement from O'Reilly Automotive has been added.]

A lawsuit filed this month in the U.S. District Court for the Western District of Missouri alleges violations of the Employee Retirement Income Security Act of 1974 through Springfield-based O'Reilly Automotive Inc.'s (Nasdaq: ORLY) tobacco policy.

The proposed class-action lawsuit was filed Jan. 23 by John Hatfield, an Arizona resident who was employed by O'Reilly Automotive. In the suit, Hatfield alleges O'Reilly Automotive unlawfully implemented a 10% tobacco surcharge on health insurance premiums without offering a legally compliant “reasonable alternative standard” to avoid it.

An O'Reilly Automotive spokesperson provided a statement on behalf of the company.

"O’Reilly Auto Parts does not charge tobacco users more for health insurance; it offers a discount to team members who complete a free annual wellness appointment with their health care provider and an additional discount to those who are tobacco-free. In addition, team members can call to discuss an alternative way to qualify for the discount," the statement reads. "Each year during open enrollment, all team members are advised not only of the benefits but also the discounts available."

The lawsuit further states, "Tobacco surcharges have become more prevalent in recent years, but to be lawful plans must make available a compliant 'wellness program' that provides employees with an avenue to avoid the surcharge. The plan does not clearly or consistently establish a reasonable alternative standard that informs participants of all available avenues to avoid the surcharge."

The tobacco policy additionally requires all members of the employee's household to be tobacco-free, the lawsuit alleges, noting that this requirement conditions "employees' premium payments on another person's health status."

According to the lawsuit, Hatfield paid approximately $780 annually for the tobacco surcharge.

In the four-count lawsuit, Hatfield seeks repayment of tobacco surcharges he already paid, to stop O'Reilly Automotive from continuing the alleged practice and to bring the wellness plan into compliance.

Separately, O'Reilly Automotive was sued this month by a former employee who alleges misuse of 401(k) forfeitures, according to past Springfield Business Journal reporting.