PITTSBURGH — A federal judge issued a summary judgment July 31 ordering Continental Tire North America Inc. to pay medical premiums for 2,000 retired United Steelworkers members who filed a class-action lawsuit against their employer after Continental arbitrarily cut the benefit, according to the USW.
Judge Jack Zouhary of the U.S. District Court for the Northern District of Ohio, Western Division, told the tire company to fulfill its contractual obligations to the retired workers from plants in Charlotte, N.C.; Mayfield, Ky.; and Bryan, Ohio. The judge is expected ultimately to enter final relief on behalf of 2,000 affected retirees, the union said.
In the past two years, Conti has eliminated tire production in Charlotte, sold the Bryan plant and closed the Mayfield factory.
In a statement, Conti legal counsel Rick Holcomb said the firm is disappointed in the ruling and stands by its past actions.
"CTNA continues to believe that the modifications to the company´s retiree medical programs implemented after bargaining with the Steelworkers union were in compliance with applicable law, and we have filed an appeal with respect to this ruling," he said.
"We understand these changes are difficult for our retirees and their families, but unfortunately, given the current market environment where health care costs continue to rise with no end in sight, increased cost sharing is unavoidable."
Mark Cieslikowski, president of USW Local 850 in Charlotte, where 1,080 employees had worked at the Continental plant in 2005 but where only 160 remain now, said the loss of the insurance coverage devastated retirees.
"It was a great benefit we enjoyed for years," he said. "But we gave up raises to get that. It was a trade off. We paid for it in a different form. Now the company comes back and takes it away from you."
Contractually, Conti was obligated to pay approximately $18,000 a year for health care premiums for retirees not yet eligible for Medicare, and $4,200 a year for those old enough to receive Medicare, the USW said. Instead, Continental summarily decided it would pay $3,000 for everyone, no matter how old or what the circumstance, the union said.
The USW said the payments should be made even if Continental appeals because the judge´s ruling makes it clear that when a benefit is vested, a company cannot take it away arbitrarily.