The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

The bosses find a new way to attack retirement benefits

Dec 6, 2004

In their never-ending assault on workers' benefits, the bosses are now filing "pre-emptive" lawsuits against retirees whose pensions were guaranteed by union contracts. The lawsuit requires the retiree to challenge the bosses' decision to stop medical insurance coverage.

This forces the retiree to shell out money for legal expenses. If an individual retiree doesn't pay for legal representation, he or she can lose their benefits. Moreover, some courts have allowed the companies to cut the benefits until the case, which drags on for years, is settled.

Retirees are left to choose the lesser of evils: to pay more for health care, to forgo expensive care or to drop out of their plans altogether. The companies, on the other hand, have nothing to lose. Even if the court finally decides against a company, the company just continues paying the benefits minus the benefits of those retirees who have already dropped out of the plans and those who have died.

So far, it's mostly middle-sized companies, such as beverage-can maker Rexam and railroad-car maker ACF Industries, that have cut health benefits this way. Nonetheless, the trend was set, as usual, by the big corporations.

Companies first attacked the benefits of salaried retirees, who didn't have the protection of union contracts. In the 1990s, GM made cuts in benefits it had offered to 50,000 salaried employees. A federal court in 1998 sided with GM, arguing that the company had the right to alter benefits even though, in print, it had promised retirees benefits "at GM's expense for your lifetime." This ruling emboldened the bosses and opened the floodgates.

With these latest pre-emptive lawsuits, bosses are now arguing that "for life" in a union contract doesn't mean for the life of the retiree but only for the life of the particular contract where the benefits were agreed on. And, once again, bosses are having no difficulty finding judges who agree with them.

Three generations ago, workers in this country fought for the right to have unions and pensions by organizing in workplaces and neighborhoods, occupying factories, going out in the streets. We seem to be moving back to square one, with bosses walking away from contracts they have signed, and the courts letting them get away with it. A new generation of workers is coming to realize the hard way that, in a society run by the bosses, the only rights we have are those we are ready to fight for.