Judge Finds Bosch Automotive Purposely Timed Lay Off of Hendersonville Plant Workers to Avoid Paying Benefits

NASHVILLE, Tenn.--June 2, 2005--United States District Court Judge Aleta Trauger recently ruled that Bosch Automotive Systems violated the rights of some 36 workers who were terminated when Bosch closed its Hendersonville plant over 5 years ago. The judge found that Bosch ran afoul of the Employee Retirement Income Security Act of 1974 (ERISA), a federal law which safeguards employee pension and fringe benefits, when it laid off certain employees prior to moving its 75 millimeter motor production lines to Toluca, Mexico.

Kevin Sharp, a founding partner of the Nashville law firm of Drescher & Sharp, and co-counsel for the plaintiffs along with Springfield attorney, Larry Wilks and Hendersonville attorney, Jay Longmire, said "this ruling vindicates these employees who gave the better part of their working lives to this company and who were ultimately treated as 'costs to be minimized' as Bosch moved its operation to Mexico." Wilks and Longmire agreed that "to deliberately and knowingly try to prevent employees from attaining their severance and early retirement benefits is not only unlawful under ERISA, but a complete slap in the face to lifetime employees."

In her ruling, Judge Trauger stated that she believed "plaintiffs have carried their burden of proof" that their employer laid them off with "a specific intent to interfere with their rights under ERISA." According to the Court, as early as 1995 people were aware that this plant in Hendersonville was going to be shut down at some point, and consequently, the collective bargaining agreement entered into between Bosch and the United Auto Workers (UAW) in 1997 had in it a closure benefit provision. The parties to the agreement negotiated plant closing benefits in that collective bargaining agreement, which was to stay in effect until July of 2000. As part of its transition of production to Mexico, in July of '98 Bosch laid off the third shift, "and then it formulated a plan by which it would attempt to minimize its costs of closing this plant by manipulating the date of a layoff, a substantial layoff, and the closing of the plant."

Testimony revealed that Bosch hired an outside consulting firm to determine the difference in plant closing costs under different lay-off scenarios. The consultant's analysis showed that Bosch could save millions of dollars by timing the plant closing so as to fall over 12 months after the lay-offs. The court found "that's what Bosch acted on" when it timed the plant closing to occur slightly over 12 months and 2 weeks after the employees were laid off in October of 1999.

Bosch's very own Plant Controller, Glenn Rossow, testified that Bosch management was concerned with minimizing the number of employees eligible for plant closing benefits and that management discussions on this topic took place both before and after the negotiations between Bosch and the UAW for the 1997 Collective Bargaining Agreement. Then Mr. Rossow specifically stated, "We selected the dates of the layoff, the announcement and the closing to avoid paying benefits." Judge Trauger stated that Rossow's testimony "couldn't have been plainer. The dates were picked to exclude as many people possible from the plant closing benefits."

Additionally, internal documents created by the Bosch Vice-President of Benefits and Compensation discussed "missing the opportunity" to lay off employees so as to avoid paying plant closing benefits. Furthermore, a memo created by the former plant manager, Tom Lewandowski, revealed his advice to superiors that the plant closing had to be more than 12 months after the lay-offs so that the employees are deprived of their closing benefits.

Judge Trauger summarized, "it is impossible to view this proof as anything but establishing that a motivating factor in all those decisions and in all the timing was the minimizing and interfering with the plant closing benefits of these workers."