Xerox retirees sue over benefits
Having unsuccessfully asked and pushed Xerox Corp. to change its mind about cuts to health care benefits, a group of retirees is now taking the company to court.
A class-action lawsuit filed Tuesday in federal court by the Penfield-based Association of Retired Xerox Employees seeks a court order barring the company from making any further cuts to coverage, restoring benefits that were axed this year and reimbursing retirees for any benefits they have been denied.
As of this year, the company quit providing an allowance to retirees who opted out of coverage under the Xerox Flex Plan. And starting in 2010, Xerox will quit offering to Medicare-eligible retirees and their spouses an allowance used to buy supplemental coverage.
Those retirees still will have access to Xerox-provided coverage and its group rate, though they will pay the full cost.
The lawsuit argues that Xerox essentially guaranteed lifetime coverage to its workers dating back to CEO Joseph C. Wilson, who headed the company from 1946 to 1967. The cuts violate the Employee Retirement Income Security Act of 1974, according to the lawsuit.
“We as employees stayed with the company and (lifetime health care coverage) was part of the deal,” said David Coriale, chairman of the retiree group and one of the plaintiffs. “The benefits were in lieu of additional compensation.”
About two dozen association members attended Xerox’s annual shareholders meeting in May in Connecticut to protest the cuts.
Xerox spokesman Bill McKee declined to comment directly on the lawsuit.
However, he said, “It is important to note that like so many economy-related cost actions that impact current and retired employees, these are very difficult decisions that required extensive analysis.
“While no one likes to make benefit reductions, Xerox still remains a very generous company when it comes to retiree health benefits.”
The plaintiffs are 10 Xerox retirees from the Rochester area, Florida and Connecticut, though the complaint was filed as a class-action lawsuit representing non-unionized workers who were hired before 1989 and have been receiving free lifetime medical benefits. The class could be more than 30,000 people.
Defendants are the company, the Xerox Retiree Flex Health Care Plan, CEO Ursula Burns, chairman Anne Mulcahy, retiree plan administrator Peter Dowd, former plan administrator Lawrence Becker and the head of human resources, Patricia Nazemetz.
