GM Canada Sued for Benefit Scale Back

Molly Wider
May 14, 2010

Molly Wider
http://bhmfinancial.com

An Ontario man has filed a potential class-action lawsuit against GM Canada for rolling back their benefits. This lawsuit against the automaker has been made on behalf of himself and 3,500 additional retired white-collar employees of the company. Just as GM Canada had reconstructed itself from the impact of the recession, this lawsuit has been filed with claims the company violated its contractual obligations to the retired workers by cutting their benefits with their approval.

During GM Canada's reconstruction process, the company said it would have to reduce or eliminate several of its post-retirement benefits it had earlier promised to its workers. GM Canada was forced to eliminate the semi-private hospital coverage its employees enjoyed, as well as reduce the annual maximum coverage for things such as orthodontic and dental benefits. It also increased the amount members would have to pay for their prescription drugs and it eliminate the life insurance coverage.

However, many of the retirees are upset because they rely on their prescription drug plans and extended health care benefits as well as the life insurance that GM had promised. These retired workers admit they cannot go back and demand more money for their work over the years, but at the same time, they do not feel it's fair that the company take away benefits they feel they have already earned. They were not in a position to negotiate with GM when the company reconstruction was taking place and feel that taking away those benefits has breached the contracts GM Canada had with its retired employees. The are also claiming these benefits to be 'an integral and fundamental part' of the compensation they earned throughout the course of their employment.

According to the statement of claim. "GM Canada's actions have had a serious impact on the class members as many of the class members live on modest non-indexed fixed incomes and they are particularly vulnerable as a result of their advanced age, susceptibility to health problems and limited capacity to assume increased financial burdens or to seekadditional employment income."

The claim also adds that employees did not purchase additional life insurance or benefits when they were available at much lower rates and are now left with less coverage than they assumed they would have. This leaves the many claimants unable to pay for medications and treatments they previously could afford with their post-retirement benefits and struggling to continue treatment for ongoing or new health issues.

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