Advocates for Labor and Progressive Institutions

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News

Fourth Circuit Affirms Judgment That Volvo Could Not Unilaterally Reduce Retirees’ Health Benefits

July 2011

The Fourth Circuit affirmed the judgment of the U.S. District Court for the Western District of Virginia prohibiting Volvo Group North America, Inc. from unilaterally modifying or terminating the health benefits of over 430 retirees of the New River Valley assembly plant in Dublin, Virginia.

In 2009, Volvo made unilateral changes to the retirees’ health plan that resulted in increased copays, coinsurance, and deductibles, and required certain retirees to pay premiums.  The United Auto Workers, with the assistance of attorneys from Bredhoff & Kaiser, won a jury verdict in the Western District of Virginia after a 5-day trial.  The Court ordered that the retirees be reinstated in the collectively bargained health plan, and required Volvo to pay damages for the increased out-of-pocket costs incurred while the unilateral plan was in effect.  UAW was also awarded attorneys’ fees.  That judgment was fully affirmed on appeal July 11, 2011, the Court of Appeals ruling that the contract prohibited unilateral changes in the retirees’ benefits as a matter of law.