Court approves lawsuit settlement over Goodyear/USW employees' retirement benefits

A settlement reached between Goodyear and the United Steelworkers Union (USW) over employee retirement benefits has been approved by a judge. The ruling by the U.S. District Court for the Northern District of Ohio sets up a $1 billion Voluntary Employees’ Benefits Association (VEBA) trust fund, established as part of a 2006 contract agreement following an 86-day strike.

The one-time Goodyear financial contribution to the VEBA will provide healthcare benefits to the company’s current and future USW retirees.

“This decision confirms the victory we achieved as a result of the work stoppage,” says USW International President Leo W. Gerard. “Retirees who spent their working lives employed at Goodyear can now be assured that funding for health insurance and prescription drug coverage is protected and cannot be taken away from them.”

The class action lawsuit was brought by the USW and two Goodyear retirees, Gerald Redington, of Lena, Ill., and Bennett Toller, of Danville, Va. It challenged the company’s right to reduce or terminate health care benefits for retirees.

The $1 billion trust fund will be removed from Goodyear’s hands and taken over by independent fiduciaries with expertise in health care benefits, Gerard explains.

Nine trustees will oversee the fund. Three will be appointed by the union, four are public members drawn from experts in the health care field, and two trustees will be appointed by Redington and Toller.

“The union will not operate the fund but our members will contribute to it in the future,” says Ron Hoover, USW executive vice president of the Rubber and Plastic Industry Conference. “Trustees of the fund and the fund’s management will be working strictly on behalf of Goodyear’s retirees.”

“Gaining court approval for the VEBA is a win-win for Goodyear and for our current and future USW retirees,” says Goodyear Chairman Robert J. Keegan. “This agreement both protects retiree benefits for years to come and removes a significant legacy obligation from our North American business.”