Weyerhaeuser Faces ERISA Lawsuit Over Retiree Benefits Cuts

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By Carmen Castro-Pagan

June 10 — A new proposed class action accuses Weyerhaeuser Co., one of the largest forest products companies in the world, of illegally terminating retirees' vested lifetime health-care benefits ( Kepner v. Weyerhaeuser Co. , D. Or., No. 6:16-cv-01040, complaint filed 6/8/16 ).

Weyerhaeuser in January 2015 unilaterally terminated its contributions to the retirees' health plan in violation of the Employee Retirement Income Security Act, according to a complaint filed June 8 in the U.S. District Court for the District of Oregon. The retirees seek reinstatement of their benefits and $7.8 million in damages allegedly suffered after the company stopped making contributions to the plan.

James Kepner and three other retirees, on behalf of themselves and others similarly situated, allege that they were recruited and retained by Weyerhaeuser as salaried employees based in part on the company's benefits package, which included lifetime health-care benefits for retirees.

The proposed class includes retirees and their eligible spouses whose rights to health-care benefits—including coverage, contributions, reimbursement, or premium coverage—had been affected by terminations, reductions or changes since December 2010.

The class could include between 4,000 and 5,000 individuals, the complaint says.

Weyerhaeuser's Promise

In 1979, Weyerhaeuser distributed a summary plan description to its salaried employees informing them of the nature and scope of their benefits package, the complaint alleges. Accordingly, the SPD explained that the employees had the right to continue health-care benefits after retirement if they elected to make a small monthly contribution.

According to the complaint, the company in 1990 included a reservation-of-rights clause, which allowed it to modify or amend the retiree contributions or terminate and substitute the retiree plan in the future. Later, the company started making changes to the benefits and ultimately terminated the company's contributions altogether in 2015, the complaint says.

The class alleges that Weyerhaeuser reiterated through the years its promise of lifetime health-care benefits as part of the company's compensation package.

They also allege that despite multiple requests to the company to disclose the 1979 plan documents, the company has refused to do so. This refusal is an attempt to “obfuscate” its promise to retirees for lifetime benefits and an “effort to misinform” them, the complaint says.

The class also seeks a declaration that they are entitled to lifetime benefits and that any plan amendment to reduce or terminate the benefits is null and void.

A spokesman for Weyerhaeuser told Bloomberg BNA June 10 that as a matter of policy the company doesn't comment on pending litigation,

Haglund Kelley LLP represents the retirees.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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