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What you need to know for 06/22/2017

Judge throws out GE retirees' health benefit lawsuit

Judge throws out GE retirees' health benefit lawsuit

'We’re certainly disappointed but ... the judge seems to think GE was right in what it did'
Judge throws out GE retirees' health benefit lawsuit
GE retirees were among those in attendance during a rally at the main gate in April.
Photographer: MARC SCHULTZ

A federal judge Thursday threw out a lawsuit over General Electric’s decision to change health care coverage for its retired salaried employees, ending a chance for as many as 65,000 former workers to reclaim benefits the plaintiffs said were promised to them.

The two retirees who brought the case — Ev Kauffman of Niskayuna and Dennis Rocheleau of Wisconsin — expressed disappointment at the sudden end of a case they had pursued for more than two years, after GE replaced its retirees’ health plans with free access to a private health exchange. The new system, they and other retirees complained, costs policyholders more at a time in their lives — age 65 and older — when they are on a fixed income and require more and more-expensive health care.

“We’re certainly disappointed but ... the judge seems to think GE was right in what it did,” Kauffman said later Thursday.

In a statement later Thursday, General Electric welcomed the ruling by U.S. District Judge Lynn Adelman.

“GE is pleased that the district court in Wisconsin ruled in GE’s favor in regards to the company’s decision to adjust its retiree healthcare benefits to an exchange system. These changes (which have been in effect since January 1, 2015) provide post-65 retirees with access to a quality private exchange, additional cost-saving options and more choice in coverage. This program is consistent with trends among other large companies.”

The two named plaintiffs were deeply involved in the compensation and benefits GE provided to its employees while they were working and promised them upon retirement: Kauffman was a benefits counselor for 37 years at GE’s Schenectady plant and Rocheleau was a chief labor negotiator.

Kauffman said the irony is not lost on her.

“I spent my career telling people that they would have post-65 coverage,” she said. “I just felt terrible about promising these things to people that no longer existed.

“This suit was never about Dennis or me. It was because GE decided to eliminate post-65 medical coverage two months after they issued a handbook that indicated that they expected and intended to continue the coverage indefinitely.”

Kauffman pointed out the dual nature of the image GE presents of itself: Leading the world to a better tomorrow as an innovator and following the example of other corporate giants in dealing with its employees and retirees.

“They’re following the rest of the world in reducing coverage,” she said.

Rocheleau said the fight isn’t over for him, as he’ll continue in other venues, such as stockholder meetings. But the legal battle may be done — he’ll know after a conference with his attorneys next week.

“I don’t see it at all as precedent-making. It’s disappointing, certainly,” he said Thursday. But he added: “In my view it doesn’t cast in stone GE’s responsibilities.”

Rocheleau said there are other things involved in this case than law, specifically “integrity and morality.”

On the latter two points, “I thought this was a complete abdication on the part of GE,” he said. “I intend to stand before the GE board at every meeting I can intend and tell them this is wrong.”

Rocheleau said an appeal would be expensive and would be argued in the U.S. 7th District, which is generally viewed as conservative and therefore potentially unsympathetic to the case. So a few hours after the ruling, which he had not even seen, he was not sure if he’ll appeal. He hopes for further guidance from his attorneys next week.

When I started this, I recognized it was an uphill fight,” he said.

The case brought by Kauffman and Rocheleau was pursued in federal court in Wisconsin and potentially would have impacted a class of 65,000 retired salaried GE employees. A similar case was brought in federal court in Ohio by dozens of labor unions on behalf of up to 95,000 retired hourly GE employees. It remains pending.

(Both are putative class-action lawsuits — cases filed by as few as one plaintiff with the claim that an entire hypothetical class of people is in a similar position.) 

GE would not comment Thursday on the unions’ lawsuit, because it does not comment on pending litigation.

Thomas Kennedy, lead attorney for the unions in their lawsuit over retiree health coverage, said General Electric is trying to get that case dismissed as well.

He said Thursday that GE moved to dismiss March 16 and the presiding judge heard oral arguments on that motion April 17. But on April 21, three rulings in the U.S. 6th Circuit went in favor of retirees in retiree health insurance cases, Kennedy said, so he sought and received permission to file an additional brief in his case, and did so in May.

He’s hoping for a ruling against dismissal soon, so that the unions’ case can go forward.

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