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13 August, 2007
US Affiliate United Steelworkers (USW) won an important court victory in its pursuit of justice for workers at shuttered Continental tyre and rubber plants in America. On 31 July, a federal judge for the U.S. District Court in the state of Ohio ruled that the German company must fulfill union contractual obligations to retired workers regarding health care.
In December 2006, some 2,000 retirees from closed Continental plants in Charlotte, North Carolina; Mayfield, Kentucky; and Byron, Ohio, filed a class action lawsuit with the support of the union. Along with the cost-savings plant closings, the company shifted a large part of health care costs onto retirees.
In the lawsuit, USW retirees, many of whom had been sacked at the time of the plant closures, sought restoration of the previous health insurance programme, and they argued for refunds on premium payments and other compensation.
Judge Jack Zouhary of US. District Court in Toledo, Ohio, ruled in a summary judgment that the company had improperly reduced the benefit levels for retirees and their spouses. The judge’s decision stated that since the company was unable to force its terms with the USW during contract talks, it unilaterally and illegally began implementing the cuts.
Continental North America argued it had the right to lower retiree benefits, because the labour contracts had expired. Zouhary ruled that retiree benefits must remain separate from wages and benefits of active workers since there is "inference" in labour agreements that "those benefits ... continue as long as the beneficiary remains a retiree."
USW's Ron Hoover
USW President Leo Gerard praised the judge’s decision. “The fact that the court issued summary judgment shows just how disgraceful Continental was in abandoning its contractual obligations to American tire builders who gave the company a lifetime of work.”
Continental has stated it will appeal the judge’s decision, but the USW is calling on the company to make the payments even if it does appeal. “This is an international corporation that has made massive profits throughout this sorry affair,” said USW Executive Vice President Ron Hoover. “It is time for them to finally stand up and fulfill the promises” made to workers.