USW Retirees Seek to Enforce Medical Benefit Promise

December 21, 2006 ( - United Steelworkers (USW) retirees and their union have filed a class action lawsuit against Continental Tire North America, Inc. (CTNA) to force it to uphold its obligations to thousands of retirees, spouses, and surviving spouses to provide lifetime retiree medical benefits.

According to a USW press release, the retirees allege CTNA breached agreements promising lifetime insurance coverage by announcing that effective on various dates in 2007 it will shift a large part of the cost of retiree medical coverage from the company to retirees and surviving spouses. The lawsuit alleges the breach is in violation of the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act (ERISA).

The retirees claim the rights to receive lifetime retiree medical benefits – created through collective bargaining agreements between CTNA and the union – were earned and vested over decades of service at the tire and rubber facilities of CTNA. The release said language from these agreements promised lifetime retiree medical benefits for retirees and spouses at CTNA facilities, such as plants in Akron, Ohio; Mayfield, Kentucky; Charlotte, North Carolina; Waco, Texas; and Bryan, Ohio.

A CTNA retiree and plaintiff from Charlotte said in the release CTNA sent letters to retirees saying it will implement a $3,000 cap on the company contribution to the cost of health care coverage for retirees and their eligible dependents, effective in 2007.

The lawsuit seeks a declaration that plaintiffs rights to retiree health care benefits provided under agreements and the Group Insurance Plan cannot be unilaterally modified or terminated by Defendants, a preliminary and permanent injunction prohibiting such modification or termination, and damages and equitable relief to remedy the reduction in benefits.