Caterpillar Squirms Under Retirees' Lawsuit

caterpillar squirms under retirees lawsuit

Caterpillar's retired United Auto Workers (UAW) members are suing the company for cuts in health coverage their union approved. In return, Caterpillar is suing the UAW to make them pay– should their members win their lawsuit. As quoted in Forbes, Caterpillar spokesman Rusty Dunn asks, "How can the union sponsor lawsuits that fight the very terms that the union proposed, negotiated and ratified during collective bargaining?" Caterpillar also alleges the UAW encouraged their retirees to file the suits. The UAW has declined to comment on Caterpillar's actions. You can bet the automakers will be keeping an eye on how this progresses as they attempt to make similar changes in the health care coverage they provide for their thousands of retirees.

Comments
Join the conversation
4 of 10 comments
  • AGR AGR on Jul 30, 2007

    Interesting situation, both the employer and the union shortchange folks that worked and contributed for many years.

  • Luther Luther on Jul 30, 2007

    All contracts made with labor unions are signed under duress since 1935 thanks to the 1935 Wagner Act.

  • Landcrusher Landcrusher on Jul 31, 2007

    Are the retirees really still part of the union? Do they still vote? If not, they should be suing both of them, and the feds should be looking into charges against both as well. Sounds like a conspiracy by Cat and UAW against the retirees. All in all, another good example of why standing unions and the laws pertaining to them are bad, just plain bad.

  • Ihatetrees Ihatetrees on Jul 31, 2007

    Landcrusher: Are the retirees really still part of the union? Do they still vote? If not, they should be suing both of them, and the feds should be looking into charges against both as well. Sounds like a conspiracy by Cat and UAW against the retirees Retirees do not vote. Whether retirees are union 'members' is a matter of debate (I think the law is ERISA). The fact that it's unclear (and has brutally uncertain accounting implications) is a reason pensions (and unions) are becoming more and more useless. 'Conspiracy' is a tough sell when the terms are out in the open. The question is "Can contract 'X' between 2 parties change the terms of previously agreed contract 'Y'. I don't see why not. I know firms without a contract are under no obligation to continue previously provided retiree health coverage. Given demographic and medical cost trends, the trend now is to fix their costs and hammer the retirees with all increases.

Next