Posted on 11/12/2004 11:17:18 AM PST by epluribus unum1
When a deputy sheriff came to his door with a court summons, George Kneifel, a retiree in Union Mills, Ind., was mystified. His former employer was suing him.
The employer, beverage-can maker Rexam Inc., had agreed in labor contracts to provide retirees with health-care coverage. But now the company was asking a federal judge to rule that it could reduce or eliminate the benefit.
Many companies have already cut back company-paid health-care coverage for retirees from their salaried staffs. But until recently, employers generally were barred from touching unionized retirees' benefits because they are spelled out in labor contracts. Now, some are taking aggressive steps to pare those benefits as well, including going to court.
End Run: Firms Claim Right to Change Coverage, Attempt to Pick Sympathetic Jurisdictions
In the past two years, employers have sued union retirees across the country. In the suits, they ask judges to rule that no matter what labor contracts say, they have a right to change the benefits. Some companies also argue that contract references to "lifetime" coverage don't mean the lifetime of the retirees, but the life of the labor contract. Since the contracts expired many years ago, the promises, they say, have expired too.
(Excerpt) Read more at online.wsj.com ...
Sorry guys but that just aint right.
I don't like this. It really sounds deceptive and unfair. To be able to change the contract, "no matter what the contract says"? I understand being in a pinch and I know premiums have probably gone up, but this seems kind of low.
A contract is a contract. If you don't like it sue the jerk that negotiated it or the lawyers who drew it up for being morons.
DO NOT go after retirees.
As a retiree this is a big fear for me.I worked years for the benefits and am terrified that they will take them away.
These benefits were offered to entice people to stay with the company...and now that they've stayed and retired, the company wants to pull this nonsense? I don't think so.
these kind or practices are rampant, and its one of the reasons we are heading for some kind of dramatic health care system changes. our party should be out in front with some free market ideas - a worker should have a 401K style fund for retiree medical, that belongs to them, instead of relying on the corporation to "make good" on the promise of retiree medical, only to have the rug pulled out from under them.
How is this different from buying a car and 15 years later the company suing you for another 15 grand because they didnt set a high enough price for the car 15 years ago?
Hmmm......union.
Lots of companies will declare bankruptcy just to eliminate these contracts.
You'd better get used to this. Company paid medical benefits for retirees are dinosaurs.
Its different because in one you are screwed after having worked for years - and poured in your blood and sweat. In the other you're screwed after using the money you earned - after pouring in your blood in sweat - to buy a car.
If this is really happening, it's pretty damned low. It's companies like this that give the 'rats ammunition, and votes.
And today's corporations wonder why employees aren't loyal to them like they were in the mid-20th century...
i generally don't like to comment on the boards, but what these companies are doing is so foul...to go after those who are least empowered to combat, basically what is a total breach of contract by relying on obscure clauses in the contract that few of the empoyees ever see. As the reporter later stated, the companies have little to loose by attempting to go back on their promises:
"They have little to lose by trying. Typically, as such legal cases drag on, the employers save money as some of the retirees, who have to pay growing portions of their health-care costs, forgo costly care, drop out of the plans or die. If companies lose in court, the worst that happens is they have to resume paying benefits. They don't face punitive damages or penalties. And they may not have to resume benefits for those retirees who dropped out of the health plans.
What's more, their earnings get a pop. That's because at the same time as they sue, employers typically announce reductions in the retirees' benefits. Doing so entitles them to lessen the liabilities carried on their books. Lower liabilities translate to higher earnings.
The retirees, by contrast, often find themselves in a bind -- unsure of their recourse and facing, as they age, the court system's typical long waits for legal resolution. The U.S. Labor Department is of little help. Retired workers "aren't our constituents anymore," says a spokeswoman for the department."
Start working on those resumes. There is a reason for all those senior citizens greeting customers at Walmart. Few of us who work for private companies will have the luxury of actually retiring.
hi - no one is denying that the cost of benefits are skyrocketing , but that doesn't give these Fortune 500 companies the right/excuse/opportunity to breach promises made to employees.
Many companies, such as mine, no longer offer retiree medical benefits for new workers, and we're a decent-sized company. This benefit is going to disappear in the future.
AHhhh ... thats what I thought.... wouldnt it be cheaper for the retirees to organize and then hire someone to kill the board of directors or CEO? ( im not endorsing such a plan) And then plead insanity after the fact? Wouldnt that be along the same lines?
It's ugly.
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