September 25, 2014
Court Ruling: Court Rules in Favor of Whirlpool Retirees
September 19, 2014. Judge Benita Pearson of the United States District Court for the Northern District of Ohio issued her court ruling in the case of Zino v. Whirlpool Corporation.
Following a five-day bench trial last November, Judge Pearson’s court ruling concluded that more than 2,000 retired workers of the Hoover Company were promised lifetime company-paid retiree health care benefits.
In 2006, Whirlpool acquired Maytag (the previous owner of the Hoover facility) and agreed to assume responsibility for these benefits. Whirlpool had claimed, however, that it was free to reduce or eliminate the benefits at any time. In her recent court ruling, Judge Pearson rejected Whirlpool’s position and concluded that retirees and their spouses are entitled to benefits that last their lifetimes.
While employed, the retirees built Hoover-brand floor care products at manufacturing facilities in the Canton, Ohio area. Unionized, they were represented by the International Brotherhood of Electrical Workers Local No. 1985. After Whirlpool announced that it was sharply reducing retiree medical benefits, retirees retained Pittsburgh class action lawyers
Bill Payne, Pamina Ewing and Ellen Doyle, and Brian Zimmerman, a respected trial lawyer from Canton, Ohio. Counsel filed suit in 2011.
Before trial, Judge Pearson had ruled against one group of the retirees, approximately 400 workers who had retired between 1983 and 1993. In her September 19 court ruling, based on the evidence presented at trial, the Judge concluded that these retirees — like the others — had in fact been promised lifetime benefits, and
reversed her prior court ruling. Judge Pearson will next conduct a trial in a second phase of the case to determine whether – despite the fact that retirees’ benefits are for life – Whirlpool’s planned changes are “reasonable” and should be permitted.
Bill Payne expressed his opinion that the retirees should prevail during this second phase of the trial because the evidence already shows that the planned reductions in benefits (which have thus far been prevented because the retirees asked for an injunction) are huge: the reductions would reduce the value of benefits from about $170 million to $43 million.
“I’m gratified that the retirees have prevailed in the most significant part of the case,” Payne said, “and that they are closer to getting a final determination from the Court that Whirlpool has no right to terminate or reduce these very important retirement benefits.”