September 17, 2008
Caterpillar Logistics Services Retirees Win a Preliminary Injunction Providing Them Premium-Free Retiree Healthcare, According to Meites, Mulder, Mollica & Glink
United States District Court Judge Aleta A. Trauger, sitting in Nashville, Tennessee, granted a motion for a preliminary injunction brought by Caterpillar retirees to provide them with retiree healthcare they were promised by the company. Caterpillar was ordered to provide Caterpillar Logistics Services ("CLS") retirees with the same level of retiree healthcare currently provided to Caterpillar retirees who retired before January 1, 1992. Caterpillar was enjoined from deducting monthly charges for retiree healthcare from the pensions of the CLS subclass. These monthly charges ranged from $115 to $250 per month, reducing these former hourly workers' modest pensions as much as 25%. Caterpillar was also enjoined from charging the retirees deductibles of $300 (for individuals) or $600 (for families) before the health insurance applies and other costs specified in the court's order.
The Court found that the testimony of the retirees demonstrated irreparable harm from the financial hardship that they are suffering and will continue to suffer due to the changes in their retiree healthcare that took effect in 2004, resulting in ever-increasing costs since then. The evidence showed that the retirees were delaying surgery, stopping their prescribed medications, and putting off doctor visits to reduce their increasingly unmanageable medical costs. One of the class members put off amputation surgery despite continued pain in his legs because he could not afford it, while another was taking only half of her prescribed blood pressure medicine to save money. Class members also testified that the premiums caused them extreme financial anxiety during retirement.
The Court found that Caterpillar and the UAW entered an agreement extending the 1988 Central Labor Agreement to the CLS employees in return for a no-strike clause. When a labor dispute arose in 1991, the CLS employees continued to work, honoring the no-strike clause. The Court found that the extension of the Agreement provided for the 1988 Central Labor Agreement to remain in full force and effect. CLS employees who retired before the labor dispute ended had their retiree healthcare benefits vest under the 1988 agreement, which provided premium-free retiree healthcare. In so ruling, the Court rejected Caterpillar's argument that the CLS retirees were automatically subject to conditions it unilaterally implemented during the labor dispute and in subsequent Central Labor Agreements, which imposed a cap on retiree medical benefits. In sum, the Court found that the subclass was likely to prevail on the merits of its claim because subclass members have a vested contractual right to retiree healthcare benefits based on the Caterpillar Logistics Services Agreement's extension of the 1988 labor agreement.
Read the entire opinion (Winnett, et al v. Caterpillar, Inc., No. 06-cv-00235) at http://www.mmmglaw.com/CM/CurrentCaseUpdates/ Opinion%20on%20preliminary%20injunction.pdf. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
The plaintiffs and class are represented by Michael M. Mulder, Shona Glink, Jamie S. Franklin and Karen Sheley of Meites, Mulder, Mollica & Glink, 20 S. Clark Street, Suite 1500, Chicago, IL 60603, Elizabeth Alexander, Kathryn Barnett, and Mark Chalos of Lieff, Cabraser, Heimann & Bernstein, LLP, 150 Fourth Avenue N, Suite 1650, Nashville, Tennessee 37219 and Jay Sushelsky of AARP Foundation Litigation, 601 E. Street, NW, Washington, DC.
Caterpillar is represented by Columbus Gangemi, Jr., Joseph Torres, and Derek Barella of Winston & Strawn, 35 W. Wacker Drive, Chicago, IL 60601.
ABOUT MEITES, MULDER, MOLLICA & GLINK
Meites, Mulder, Mollica & Glink represents plaintiffs in nationwide class actions and multi-party complex litigation in federal and state courts, focusing on employment discrimination, workplace benefits, whistleblower actions, consumer rights, and securities litigation. The firm's guiding principle is to pursue cases that have a positive impact on society by advocating on behalf of classes of employees, investors, consumers, and others whose legal rights have been denied.