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Winnett v. Caterpillar

Appeals Court Overturns Injunction Prohibiting Reduction of Caterpillar Retiree Health Benefits

The Ruling

In 2008, a trial court imposed an injunction on Caterpillar, prohibiting the company from reducing health benefits for class members who retired from the Caterpillar Logistics Services unit during the pendency of the case. An appeals court, however, has now overturned that injunction on the grounds that the underlying claim is time barred — ruling that the workers waited too long to sue. The court ruled that the statute of limitations clock began ticking in 1998, when the UAW and Caterpillar reached a new labor agreement that for the first time announced limits on the company's expenditures for obtaining health care benefits. The notices that were sent out announcing potential changes in the terms of retiree health care coverage, the court ruled, put the plaintiffs on alert that their benefits had changed. Because the workers did not file a lawsuit until 2006, the court ruled, they had let too much time go by and were barred by the six-year statute of limitations.

This decision impacts a substantial number of the class members. This is a particularly bitter pill because Judge Martin's  concurrence noted that had the workers filed a lawsuit earlier, they likely would have prevailed on the merits.

The underlying case is important because if companies can unilaterally change their policies even in the face of a collective bargaining agreement, then labor contracts have no teeth and retirees are at the mercy of changing business climates and the bottom-line driven decisions of corporate executives — despite having invested a lifetime of work and retiring with the confidence of a secure health coverage in retirement that may turn out to be an illusion.

The ruling is a significant disappointment.

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