Settlement Approved in Years-Long Retiree Benefit Case

August 23, 2011 ( – A settlement agreement for a case in which retirees argued their employer owed them health benefits for life has won preliminary approval in the U.S. District Court for the Eastern District of Michigan.

Bargaining unit employees who retired under the Case Corporation Pension Plan for Hourly Paid Employees filed a lawsuit in December 2002 against El Paso Tennessee Pipeline Co. and Case arguing that when the firms required retirees to pay premiums to maintain their health care benefits they breached terms in collective bargaining agreements and violated the Employee Retirement Income Security Act (ERISA).   

While El Paso continues to deny liability, it wanted to resolve the case to avoid any more costly litigation, according to the settlement agreement. Under terms of the agreement it has agreed to provide a Managed Care Plan for retirees who are not Medicare-eligible and a Medicare Supplement Plan for those who are Medicare-eligible.  

El Paso also agreed to continue dental, vision, and hearing aid benefits, as well as maintain current life insurance benefits for the lifetime of all retirees.  

In February 2008, while allowing retirees to move forward with their lawsuit seeking reimbursement of health care expenses incurred after their employer benefits were cut off, the court threw out plaintiffs’ claim for emotional damages (see Court Throws out Claim of Emotional Distress for Cutting Retiree Health Benefits). In March of that year the court found El Paso and Case liable for the benefits with damages remaining to be determined.  

A hearing for final approval of the settlement is set for November 17, 2011.  

The case is Yolton v. El Paso Tennessee Pipeline Co., E.D. Mich., No. 2:02-cv-75164-PJD-DAS.