Abbott Labs Accused of Benefits Interference

April 29, 2009 ( - Plaintiffs in a class action lawsuit allege Abbott Laboratories cheated workers out of their retirement benefits when the company spun off its hospital products business.

The Chicago Sun-Times reports that the lawsuit stems from Abbott Laboratories’ 2004 spinoff of its hospital products unit into a separate company, Hospira, which is also named in the suit. Workers claim they were assured by Abbott they would have a comparable benefits package at Hospira, but they did not.

After the spinoff, Hospira dropped retiree health insurance benefits, and workers’ Abbott pension benefits were frozen. Alleged wrongdoing by Abbott and Hospira cost former Abbott workers “well in excess of $200 million,” contends plaintiffs’ attorney Steve Sprenger, according to the Sun-Times.

The suit accuses Abbott of deciding to spin off the division to avoid paying a large block of older employees significant benefits when they retired. It also alleges that as part of an unlawful scheme Abbott adopted a no-hire policy refusing to rehire employees who were transferred to Hospira for two years following the spinoff, eliminating any pension rights plaintiffs could have retained under the Abbott benefit plans, the news report said.

Sprenger said only some Hospira executives were offered transition bonuses equal to the amount of their lost benefits. The lawsuit seeks to make the employees whole in their benefits.

Both Abbott and Hospira deny any wrongdoing.