Timothy Johnson received a letter on July 15 from the United Auto Workers stating that after years of litigation with Whirlpool the retiree’s health benefits were going to change.
In 2008 Whirlpool filed a lawsuit against the UAW and Maytag retirees in federal Court in Des Moines requesting that Whirlpool have the authority to change health benefits for almost 3,000 former Maytag employees. The plan Whirlpool has placed them in is more costly for the retirees compared to the previous plan, which covered 100 percent of their health costs.
Ronald McInroy, director of the UAW Region 4, characterized the initial lawsuit in 2008 as a surprise attack and that it was politically motivated. In his letter, McInroy stated that Whirlpool wanted to be sure the case was filed in Iowa rather than Michigan where courts have historically been more favorable to unions in such lawsuits. The UAW argued that Whirlpool was required to uphold the retirees health benefits based on collective bargaining agreements.
“In litigation, we presented substantial evidence showing this, including compelling testimony by former UAW officials who negotiated these agreements,” McInroy said.
The federal judge ruled in favor of Whirlpool and the UAW appealed the ruling. In the letter McInroy said that litigating the case in the 8th Circuit Court of Appeals, whose judges were all appointed by Republican Presidents and affirmed the lower court’s decision, was an uphill battle.
“Elections have consequences,” McInroy said in the letter, “and the Republican party’s successes in Iowa and neighboring states over the last two decades have resulted in a federal judiciary that is far more attuned to the interests of large corporations than to the interests of workers and retirees.”
Johnson said that he believes politics only played a small role in the October 2012 decision of the appeals court to not rehear the trial.
“I think there could have been a little bit of influence, but I don’t know. I’m a moderate,” Johnson said. “I’m not out there left or right. I’m kind of in the middle of the road and to say that because those judges were appointed by Republicans meant that they would automatically make a decision against labor, I don’t think that so much as Whirlpool manipulated getting this in Iowa before we even had a chance to do anything in Michigan.”
US District Court Judges stated in their initial ruling in July of 2011 that the UAW failed to prove that Whirlpool had any obligation to uphold the current benefits that had been previously negotiated by the UAW, thus giving Whirlpool the ability to unilaterally change Maytag retirees’ benefits.
“The court is not unaware of the expectation of the Newton retirees nor unsympathetic in the result reached herein,” U.S. District Court Judge James Gritzner wrote in his decision. “However, the union has not carried its burden ... of showing that the company agreed to vest retiree medical benefits.”
Johnson said that the UAW may not have thoroughly negotiated with Maytag or with Whirlpool when Whirlpool bought the Newton based manufacturing company in 2005.
“I don’t know if I ever saw anything in our contract books that said anything about retirement benefits and health benefits being paid and stuff.
“I think they didn’t quite have all their ducks in a row, that’s for sure,” Johnson said. “I mean when this buyout occurred I remember thinking, ‘I hope these guys got right up front with all these people that are negotiating the deal that we basically got a contract for lifetime benefits.’”
Johnson is a Vietnam War veteran and has health benefits through the VA and also Medicare. He said that not everyone in the group of 3,000 people affected by this change are as covered as he is.
“There’s a lot more of my friends and acquaintances that were affected a lot more in the benefit area than I was,” he said “Like I said, I was pretty lucky.”