Cohen Milstein Sellers & Toll PLLC represented a class of over 30,000 retirees (and their dependents) of Goodyear Tire & Rubber Company, Kelly Springfield Tire Company,  the Dunlop Tire Company  North America, Ltd., and the Dunlop Corporation (hereinafter “Goodyear”) who were  members of the United Steel Workers (or one of its predecessors, the United Rubber Workers) in collective bargaining.  The lawsuit was entitled Redington v. Goodyear Tire & Rubber Co., No. 07-CV-1999-JRA (N.D. Ohio).

Summary of the Claims

The Complaint alleged that under successive labor agreements, retirees of Goodyear were promised that they would receive healthcare benefits throughout retirement and that their spouses would receive healthcare benefits until death or remarriage.  In 2006, Goodyear announced that, beginning in 2007, retirees and their dependents would have to bear healthcare costs themselves.  The lawsuit alleged that Goodyear retiree healthcare benefits were vested under ERISA and the terms of the collective bargaining agreements and that Goodyear was prohibited from reducing or eliminating the retirees’ healthcare benefits.

History of the Litigation

In the course of this litigation, Class Counsel on behalf of the Plaintiffs successfully certified a Class and obtained approval of a Settlement Agreement between the retirees, Goodyear and the United Steel Workers.  The Settlement Agreement resulted in the establishment of a trust (called a Voluntary Employee Beneficiary Association or VEBA) through which retiree healthcare benefits would be provided in the future.  The VEBA received an initial contribution of approximately $1 billion from Goodyear, subsequent contributions from active Goodyear employees during the 2006 collective bargaining term and possible future contributions from active Goodyear employees.  The VEBA is administered independent of Goodyear, which is no longer responsible for providing retiree healthcare benefits.  The Settlement Agreement was approved by the court on August 22, 2008 and the VEBA became operational shortly thereafter.