Whose Money Was It?

      In a previous post about my Dad, I talked about his being forced out of Continental Can Company and his having joined one of the largest class action lawsuits in history against the company. I talked about how he died several months before his share of the settlement was received. My mother received a portion but not all of his share.  The amount she received was substantial enough to enable her to retire in comfort due to a health issue.  Below is an article from the New York times detailing the cause of action:

May 11, 1989 NEW YORK TIMES

15388037-male-judge-writing-on-paper-in-courtroomNEWARK, May 10— The Continental Can Company developed a secret and sophisticated computer program that it used to deny pension benefits to longtime employees, a Federal judge ruled today.

In a sharply worded opinion, Federal District Judge H. Lee Sarokin directed Continental Can to begin negotiating settlements with about 2,500 Continental workers. Costs to the company could approach $500 million.

”The plan was shrouded in secrecy and executed company wide at the specific direction of the highest levels of corporate management,” Judge Sarokin said in a written opinion.

”It was intended to save hundreds of millions of dollars in unfunded pension liabilities,” he continued. ”The evidence of the plan, its secrecy and its execution comes from the files of the defendants themselves. The documents are more than a smoking gun; they are a fusillade.” End to Other Cases Seen

The case covered 315 layoffs at a St. Louis plant, and 43 of the company’s other 45 plants might be affected.

A suit on behalf of employees at a Los Angeles plant was won by the employees; a suit filed on behalf of Pittsburgh employees is still in litigation. Judge Sarokin said in his ruling that there was no need to hear the other cases against Continental, based in Norwalk, Conn.

”What the judge has said is that this should end all the cases everywhere,” said Robert Plotkin, a lawyer for the workers. ”This is not a case of a class-action suit where plaintiffs each have a claim to $10. What we’re talking here is, you have many former employees who have individual claims worth in excess of $100,000.”

Douglas G. Eakeley, who represented Continental Can, did not respond to telephone calls seeking comment. Layoffs at Issue

The pensions in question were special ”magic number” pensions negotiated in 1977 by the United Steelworkers union for employees subject to periodic layoffs. They were intended to protect employees with long years of service who had not yet reached normal retirement age.

Lawyers for the workers have maintained that Continental management adopted a secret plan to prevent employees from vesting in the costly pensions by laying them off before they became eligible. The judge agreed with that argument.

A Federal pension law, called the Employee Retirement Income Security Act, prohibits employers from taking any action against workers for the purpose of interfering with their pensions.

”For a corporation of this magnitude to engage in a complex, secret and deliberate scheme to deny its workers bargained-for pension benefits raises questions of corporate morality, ethics and decency which far transcend the factual and legal issues posed by this matter,” the judge said.

Mr. Plotkin said the ruling should convince the company to quit dragging the suit on, but that he was not counting on it. ”Continental’s continued efforts to avoid its obligations to those employees any way it can are deplorable,” he said.

Company lawyers had argued there was no secret plan in place, and that even if there were, the employees would have been laid off anyway.

http://www.nytimes.com/1989/05/11/business/company-news-continental-can-loses-pension-case.html

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