Unisys misled retirees
The judge wants the Blue Bell firm to be ordered to pay medical
coverage for 12 plaintiffs in the 1992 case.
By Akweli Parker, Staff Writer
Wednesday, October 4, 2006
A handful of former Unisys
workers stands to save hundreds of dollars on monthly medical
premiums because of a federal ruling against the Blue Bell
At issue: In 1992, retirees sued Unisys after it went back on
commitments to pay them lifetime medical benefits. It forced
them onto a newer plan that made them pay increasingly more
toward post-retirement medical premiums. The new plan was
structured so that by 1996, the retirees paid all of their
monthly premiums, typically more than $349 out of pocket with
the help of Medicare, and more than $870 without it.
Unisys countered that the language of its retirement plan
permitted the company to change the terms at will.
Over the last 14 years, the courts have gone back and forth over
which side was right, the company or the retirees. Along the
way, Unisys succeeded in having the complaints against it
stripped of their class-action status, which could have affected
30,000 former workers.
But in a ruling Monday, U.S. Magistrate Judge Thomas J. Rueter
of the U.S. District Court for the Eastern District of
Pennsylvania found that Unisys had indeed violated its fiduciary
duty to the retirees and had misled them.
Rueter recommended that another judge order Unisys to reinstate
within 60 days free medical coverage for 12 of the 14
retiree-plaintiffs in the case.
Alan Sandals, the plaintiffs' lead attorney since 1992 and a
Democratic Senate primary candidate earlier this year, said the
ruling effectively served as a guide for more than 500
households of Unisys retirees and their spouses nationwide who
are in a position similar to that of the Philadelphia-area
"It's a test case in the sense that the law is the law," Sandals
"It's not closure, but it puts the writing on the wall for the
company: When you apply these fact patterns, this is how the
judges are going to view it."
He added that all of the people affected are old enough to
receive Medicare and that, inexorably, they are dying off.
For Unisys, he said, "The responsible thing is to make peace
with these people" and reinstate the free health premium
Unisys spokesman John Schneidawind declined to discuss specifics
of the case or the ruling, but offered this statement from the
company: "Although we have not yet had the opportunity to study
the opinion in detail, we disagree with Judge Rueter's
conclusions, and we are currently reviewing our appellate
In 1994, the company reached a settlement with 7,500 retirees in
which the company agreed to pay about two-thirds of the cost of
their medical insurance.
The company was formed in 1986 from the merger of
computer-makers Sperry Corp. and Burroughs Corp.
It has struggled to find its footing in the marketplace -- and
profitability -- since the large mainframe computers it produced
fell out of favor with business. The firm now focuses on
technology consulting and services, rather than on selling
Contact staff writer Akweli
Parker at 215-854-5986 or