Deere retires sue over benefits
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By Jennifer DeWitt | Wednesday, September 10, 2008 |
A year after Deere & Co. rolled out new health benefits for a group known as its Flex Retirees, the affected Deere retirees are suing the company in hopes of restoring their original benefits.
Leaders of the Flex Retiree Organization, or FRO, said Wednesday that a class action lawsuit has been filed on behalf of all “Flex Retirees” against the Moline-based manufacturer and its various benefit plans. The lawsuit was filed Wednesday in U.S. District Court, Davenport.
“On January 1, 2008, Deere & Company dramatically reduced health, dental and vision insurance benefits for the approximately 5,000 Flex retirees,” Bill Gabbard, FRO’s president, said at a news conference. He said by its action, Deere violated “its promises to salaried employees who qualified for retirement benefits or who took early retirement options that they would be entitled to receive the same health benefits throughout retirement that they had as active employees.”
Although the suit names three individual retirees as the plaintiffs, the class action represents “all those similarly situated,” said Daniel Bonnett, FRO’s attorney. The class includes former salaried and non-union wage Deere employees who retired on or after July 1, 1993, and were eligible to receive medical and health benefits. Also included are the retirees’ eligible spouses and dependents.
The named plaintiffs are retirees: Dora Brubaker, 69, of Johnston, Iowa; Thomas Blosch, 61, of Dubuque, Iowa; and Michael Stohlmeyer, 67, of East Moline, who also is a FRO leader.
Bonnett said new information indicates number of affected retirees could be as many as 6,000.
According to the suit, “Deere implemented radically inferior healthcare benefits and coverage in comparison to the benefits and coverage provided to plaintiffs while working.”
Among the changes, the suit alleges are: significantly higher deductibles for both in- and out-of-network benefits as well as a significant increase in the maximum out-of-pocket expenses (co-payments) and elimination of any maximum on the amount of out-of-pocket expenses.
“As a result, many providers including hospitals such as the Mayo Clinic are now prohibitively expensive and completely out of reach for Class members … ,” the suit said. It also said prescription drug benefits were dramatically reduced.
Deere first announced the new health plan in September 2007, indicating that it would allow retirees to be more involved in their health care decisions. Deere also said the new plan was designed to leverage changes made in the federal laws.
On Wednesday, Deere spokesman Ken Golden said the company had not had the opportunity to review the lawsuit. “However, Deere does plan to vigorously defend its actions in court. The innovative health care program was reviewed carefully before Deere introduced it and we are confident that the changes are appropriate and beneficial,” he said.
“We continue in our belief that involvement by retirees in their own health care decisions will result in choices that are better matched to each person’s individual circumstance,” he added. “This program represents a significant benefit that many retirees of other companies do not enjoy.“
But FRO members said the benefit changes have resulted in “gut-wrenching stories” from retirees, who now are hurting financially. “People are worrying where they’re going to get money for their medications,” Gabbard said.
“In light of the significant hardships and damage inflicted by the company’s benefit reductions, the lawsuit seeks preliminary and permanent injunctive relief ordering Deere & Company to restore the promised benefits and to further enjoin Deere & Company from reducing benefits in the future,” he said during the news conference at the Bettendorf Holiday Inn.
In addition to seeking restoration of the original benefits, the lawsuit also requests that “the participants be made whole” for any additional out-of-pocket costs they have incurred as a result of the benefit plan changes, Bonnett said. He added that the dollar amount is unknown, but will become clearer during the discovery process.
Bonnett also could not predict a timetable for the litigation, but said “there is urgency” because the issue deals with people’s health. “It is costing people on a fixed income more out of pocket,” he said, adding “It has forced them to forego health care because they can’t afford it or make choices and make sacrifices.”
The lawsuit also was critical of how Deere handled the new plan’s rollout — notifying the Flex Retirees only a few months before it went into effect. The lawsuit alleges “Plaintiffs and Class members were forced to make hasty decisions about the continuation of their healthcare coverage and benefits based on inadequate information or face the risk that … all future retirees’ health and medical benefits would be lost.”
Gabbard stressed that the lawsuit was a last resort and “filed only after repeated efforts by FRO to resolve these issues failed.” “There were no negotiations,” he said, adding that FRO asked Deere that the program be postponed for a year but the idea was rejected.
“It’s saddening to think of all us old-timers up here who spent so many years working for Deere & Company now are saying we’re filing a lawsuit against Deere,” said Gabbard, a third-generation Deere employee.
FRO will hold retiree meetings in the next couple weeks to update retirees on the group’s latest action. The meetings have not been scheduled.
“I suspect there will be an uptick in interest with people who have not gotten on board with FRO,” he added.
Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.
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