Jul 31, 2014
Third Circuit Decision – The Third Circuit Court of Appeals Revives Borrower Class Action in the U.S. District
In a retiree health benefits case entitled Cheatham v. RCA Rubber, Feinstein Doyle Payne & Kravec, LLC attorneys represent former Steelworker Union retirees in the United States District Court for the Middle District of Tennessee.
The retirees, from Pulaski, Tennessee, had worked under hazardous conditions in a rubber factory owned by Pulaski Rubber Company. The Pulaski retirees challenged their former employer’s termination of their retiree health benefits.
The court agreed that the Pulaski retiree health benefits were vested and that Pulaski had wrongfully terminated them. Judge Kevin H. Sharp declared, “Given the context in which labor negotiations occur, it is almost axiomatic that employees who forego wages now for the promise of retiree benefits in the future do so with the expectation that those benefits will continue through retirement.”
Judge Sharp further stated this was because these benefits are “typically understood as a form of delayed compensation or reward for past services.”
The battle to restore benefits for the Pulaski retirees is not over because the company was an insolvent subsidiary corporation. Judge Sharp has ordered a trial to determine whether the parent corporation should also be held liable. Trial is scheduled to take place in February 2013.
To review Judge Sharp’s Opinion, click here: