Court Decides CTNA Must Pay Health Benefits

Following a US court ruling Continental Tire North America has been given the responsibility of compensating the healthcare expenses of a number of retired employees from plants in Ohio, Kentucky, North Carolina and California. The US district court in Toledo, Ohio decided that the company improperly reduced the health benefits of 3,000 former CTNA employees and their spouses.

Lawyers for the plaintiffs claimed that the CTNA decision to reduce the former employees’ health benefits resulted in couples not old enough to qualify for subsidised ‘Medicare’ health care (the minimum age for eligibility is 65) paying as much as US$1,000 a month for insurance. Many former employees were reportedly unable to afford these costs and thus were compelled to drop their healthcare cover.

“This is a total victory,” said Stephen Pincus, a lawyer representing the retirees and the United Steelworkers in the lawsuit, which was filed late last year. The judge presiding over the case noted that CTNA and the USW had failed to come to any agreement during negotiations, and had implemented the healthcare cuts without union consent. In response to CTNA claims of entitlement to reduce these benefits as the labour contracts had expired, the judge stated that retiree benefits must be treated differently to those of current employees as there is an “inference” in labour agreements that benefits for retirees continue for as long as the beneficiary remains a retiree.

CTNA has not commented on the ruling but has indicated its intention to appeal.