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Federal court orders Akron Beacon Journal to restore retiree healthcare benefits after "bait-and-switch" scheme

Thursday, May 13, 2010

AKRON, OHIO—U.S. District Judge David Dowd today issued a preliminary injunction against the Akron Beacon Journal and Canadian media mogul David Holmes Black, ordering them to restore prescription-drug benefits to retirees. He also ordered the Journal to reimburse denied benefits that the retirees had had to pay out of pocket while the Journal was breaching its promises. In September 2009, the retirees had filed a federal class-action lawsuit in September 2009 against their former employer and Canadian media mogul David Holmes Black for engaging in a "bait and switch" that denied them contractually guaranteed, lifetime, low-cost health care in exchange for their early retirement.

The retirees, members of the Communication Workers of America (CWA) Local 14514 (formerly known as the Akron Typographical Union, International Typographical Union Number 182), had been guaranteed lifetime employment with the Beacon Journal as part of their union contract. The Journal had cajoled these retirees to take early retirement and give up their right to lifetime employment in exchange for lifetime, low-cost prescription-drug and other healthcare benefits for them and their spouses.

Citing evidence regarding the Journal's broken promises, the judge found that the retirees were likely to prevail on their claim that in 2006, the Journal broke its promises to the retirees by replacing their low-cost prescription-drug coverage with high-cost plans, causing a significant financial burden and leading, for some, to declining health. Black played a key role in interfering with the Journal's contractual obligations after he assumed control of the company.

Judge Dowd ordered as follows:

[D]efendants are ordered to: 1) immediately restore and provide all prescription-drug and/or health insurance benefits as described in the individual retirement benefits letters received by retiree plaintiffs at the time of their retirement for the retirees and their spouses; and 2) upon presentation of receipts or other evidence of prescription-drug or other healthcare-related expenditures for which a benefit is described in plaintiffs' individual retirement benefits letters, provide reimbursement to plaintiffs for the difference between the sums paid by individual plaintiffs and the sums the individual plaintiffs would have been required to pay had the benefits in plaintiffs' retirement benefits letters been provided as described therein.

Retiree attorney Subodh Chandra said, "Having cold-heartedly broken promises to these retirees and now been called on it by a federal judge, one would hope that the Akron Beacon Journal would now simply accept responsibility, comply with the order, and not do it again. We suspect, however, that they will continue to drag out this dispute with appeals hoping that the retirees will just die or go away. And we know that they have done this to others."

The suit, seeking an injunction and damages, is captioned White, et al. v. Akron Beacon Publishing Co., et al., and was filed in the United States District Court, Northern District of Ohio, Eastern Division. The retirees are represented by Subodh Chandra and Donald P. Screen of the Chandra Law Firm, LLC in Cleveland, Ohio, and Allen Anderson and Kenneth Petterson of Smith & Johnson in Traverse City, MI.


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Related Practice Areas
Class ActionsERISAHealthcare Fraud

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