Three retirees have sued the heavy equipment maker, Caterpillar Inc., Peoria, IL, claiming the company has reneged on an obligation to provide them free health benefits for life.
The federal lawsuit claims that all Caterpillar retirees who left the company between Jan. 1, 1992 and Mar. 1998 - a period during which there was no valid contract between Caterpillar and the United Auto Workers (UAW) - are owed free lifetime health insurance.
The lawsuit was filed last week, in U.S. District court in Nashville, TN, by retirees Gary T. Winnett, Fred Jackson-Chittum and Casper R. Harris, according to a report yesterday in the (Peoria) Journal Star. Caterpillar declined comment on the lawsuit because it is a pending legal matter.
The suit claims that because no formal contract was in place, workers who retired during that period are entitled to the terms of the previous contract, which was approved in 1988 and provided free, lifetime health care coverage for all eligible retirees and their dependents.In 1991, Caterpillar announced that any worker who retired after Jan. 1, 1992, must pay toward health benefits in retirement. Its next contract was not approved until 1998, which required the health care contribution for retirees.
Retirees did not start paying toward their health care benefits until 2004, however, when a special union fund ran out.
UAW workers in 2004 twice rejected Caterpillar contract offers largely because they said health care costs would burden many retirees. Under the eventual deal, approved in January 2005, retirees pay about $60 a month toward their health care coverage.