The Association of U S West Retirees



Court: 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
Philadelphia Inquirer
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 company.

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 plaintiffs.

"It's a test case in the sense that the law is the law," Sandals said.

"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 benefits.

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 options."

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 hardware.

Contact staff writer Akweli Parker at 215-854-5986 or;sz=720x300