Dayco Retirees Given Class-Action Green Light

May 13, 2003 ( - Retirees of Dayco Products LLC, who claim a collective bargaining agreement gives them no-cost health insurance benefits, may proceed with their class action suit.

>US District Judge Lacy Thornburg with the US District Court for the Western District of North Carolina, found the class action could proceed in Trull v. Dayco Products LLC because the class met the necessary four prerequisites:   numerosity, commonality, typicality, and adequacy of representation.  The retirees brought the action against Dayco, alleging six claims under the Labor Management Relations Act and ERISA , according to Washington-based legal publisher BNA.

>The retirees were members of Local No. 277, United Rubber, Cork, Linoleum and Plastic Workers of America who worked at an Ohio plant that closed in 1998. In seven consecutive bargaining agreements, Dayco agreed to provide health insurance at no cost to employees who retired from Local 277.

>However, in 1992, an addendum was added to the 1990 agreement in which caps were imposed on the amount that Dayco would be required to pay for health insurance for employees who retired after the date of that agreement, although the participants claimed the addendum did not apply if the plant closed. In the last agreement, negotiated in 1995, Dayco allegedly represented that the caps would increase by 5% each year as to future retirees. However, when the plant closed, the company began to charge for premiums in excess of the cap, the suit claims.

Class Action

The retirees described the class as all persons who retired from Local 277, having met the eligibility requirements for medical coverage, plus the surviving spouses. The class was divided into two subclasses, based on the retiree’s retirement date.

The court found the class actions requirements were met through:

  • numerosity – there were over 800 retirees in the proposed class, and therefore joinder would be impracticable.
  • commonality – the members had common questions of law or fact.
  • typicality – all the class members were claiming that Dayco originally planned to provide lifetime, fully-funded benefits to retirees.
  • adequacy of representation – no conflict of interests between the class representatives and the class they were seeking to represent.

>With the determination, the court rejected Dayco’s argument that the retirees had different claims because they had retired under different retirement agreements that had differing provisions regarding caps, coverage, and prescription co-pays, among other things. “The issue for resolution is the coverage provided pursuant to the bargaining agreement under which the retiree retired,” the court said. “Therefore it is immaterial that the agreement had different terms.”

>Also rejected was the argument that some of the named plaintiffs were members of the negotiating teams connected to several of the bargaining agreements, and therefore their service may come under fire.   The court said Dayco’s argument of antagonism was “exaggerated.”

The case is Trull v. Dayco Products LLC, W.D.N.C., 1:02CV243, 5/2/03.