Benefits November 8, 2004

Participant Lawsuit Brought Against Pharmaceutical and Health Care Product Producer

November 8, 2004 (PLANSPONSOR.com) - Abbott Laboratories and a spinoff, Hospira, Inc., have been sued by employees claiming that the company unlawfully interfered with their rights to receive employment benefits, according to a press release from the plaintiff's law firms.

Reported by

Kip McDaniel

The violation of the Employee Retirement Income Security Act (ERISA) allegedly occurred when Abbott terminated its hospital products division (HPD) staff and spun off the division as Hospira. This prevented many long-tenured employees from garnering more benefits as they approached retirement, the suit alleged. Since the HPD staff had the most seniority of any Abbott division, the suit alleged, Abbott terminated the employees to prevent them from accruing the benefits.

The suit charged that after the spinoff Hospira told employees that they would not be getting retiree medical benefits, and that after 2004, employees would not be able to earn additional benefits in their Abbott defined benefit plans.

Compounding the problem, according to the suit, was the fact that after the spinoff, Abbott set up a clause that made it impossible for employees to be rehired by the company within two years without missing two years worth of benefits. Hospira also set adopted a two-year policy that prevents former Abbott employees from receiving benefits while still working for Hospira.

The two law firms representing nearly 10,000 former Abbott employees, Sprenger & Lang and Meites, Mulder, Burger & Mollica, are attempting to receive class-action certification. They are also seeking reinstatement and restoration of lost benefits. The law firms are expected to garner large fees if a settlement or judgment is reached in their favor (See Lawyering Up )

Abbott and Hospira are based in Abbott Park, Illinois, and Lake Forest, Illinois, respectively. They produce and distribute health care and pharmaceutical products.