Monday, October 27, 2008

Think Your Union Takes Care of You?

Well, think again, suckas.

An employer and union violated ERISA when they entered into an agreement to deduct 100 percent of retirees' health insurance premiums from their accrued sick-leave accounts, the Seventh Circuit ruled. The bargaining agreement provided that if, upon retirement, an employee had unused sick leave, the monetary value of that leave would be used to pay the retirees' healthcare premiums "on the same basis as the benefit is currently paid for employees." (At the time of the agreement, the employer was paying 90 percent of the premium cost while employees paid 10 percent.) Despite this provision, the employer used up the entire $42,000 in a retiree's accrued sick leave by deducting 100 percent of the cost of his insurance premium from the sick-leave account. The appeals court rejected the employer's justification that the retiree health plan agreement had been modified by later dealings with the union,

...This "secret side deal" between the union and employer to alter the terms of the retiree health plan agreement was a breach of fiduciary duty by the plan managers nonetheless. "So it is doubly unlawful—as unwritten and as secret," the appeals court concluded. Moreover, the Seventh Circuit ruled attorney fees were properly granted to the plaintiff retirees. "For the defendants to use their deceptive conduct toward the retired employees as a basis for trying to duck liability was shabby," the appeals court wrote

Oh, by the way: the Wisconsin State Employees Union Council 24 LOST the decision.

They screwed Orth (and a number of others....)

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