News From USW: Steelworkers File Class Action Lawsuit Against Continental Tire for Altering Retiree Health Care Benefits

PITTSBURGH--

News From USW: United Steelworkers (USW) retirees and their union have filed a class action lawsuit against Continental Tire North America, Inc. (CTNA) to force the tire maker to uphold its obligations to thousands of retirees, spouses, and surviving spouses to provide retiree medical benefits throughout retirement.

The lawsuit was filed December 13, 2006 in the U.S. District Court, Northern District of Ohio, Western Division.

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 the retirees and surviving spouses. CTNA’s violation of those agreements is actionable under the Labor Management Relations Act (“LMRA) and the Employee Retirement Income Security Act of 1974 (“ERISA”).

The retirees claim the rights to receive retiree medical benefits were earned and vested over decades of service at the tire and rubber facilities of CTNA. Rights to retirement benefits were created through collective bargaining between CTNA and the Union that had represented the retirees while they were employed. Virtually the same 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.

“In late November, CTNA sent letters to me and other retirees announcing that, effective in 2007, it “will be implementing a $3,000 cap on the Company contribution to the cost of health care coverage for retirees and their eligible dependents,” said Mike Dassaro, a CTNA retiree and plaintiff from Charlotte. “They think they have the right to alter my benefits and make me pay for it, but they must not have read the contracts. It is important for everyone that we stand up for what’s right.”

Plaintiffs seek a declaration that their 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.

Overall, the USW presents more than 850,000 members in the U.S. and Canada. Some 70,000 are employed in the tire, rubber and plastics industry.