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"US Supreme Court allows GM to cut retiree benefits"
WASHINGTON, June 8 (Reuters) - The Supreme Court on Monday
sided with General Motors Corp. in a long legal battle
on whether the automaker violated federal law in reducing
health care benefits to some of its retirees.
The justices declined to review a U.S. appeals court ruling
in January that rejected the claims brought in a class-action
lawsuit filed in 1989 involving 84,000 retirees.
The lawsuit challenged GM's decision to reduce some
benefits and to require retirees to "co-pay" a share of health
care costs. Retirees now pay up to $5,000 annually for
out-of-pocket expenses, according to their lawyers.
The former GM employees alleged that the company promised
them full health care benefits while they were working, but cut
the benefits after they retired. The suit alleged that GM had
violated the federal Employee Retirement Income Security Act of
1974.
The appeals court ruled that retirees were told they were
entitled to full health insurance coverage at no cost
throughout retirement but were also told the pension and health
care plan's terms were subject to change.
Raymond Fay, a lawyer for the retirees, asked the Supreme
Court to hear the case, saying it presented legal issues "of
recurring national importance" concerning the vesting of
welfare benefits in retirement.
The high court sided with GM, denying the appeal without
comment or dissent. GM said the appeals court ruling applied
settled law to the facts of the case, and that Supreme Court
review was not warranted.
((James Vicini, Washington newsroom, +1 202 898-8397, fax
+1 202 898-8383, washington.economic.newsroom@reuters.com)) |
