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Benefits Change at Deere Spurs Retirees Lawsuit

The lawsuit accuses Deere & Co. of reneging on a promise that some 5,000 salaried workers who retired after 1993 would be eligible for the same health coverage in retirement that they had while they worked.

September 12, 2008

Deere & Co. retirees have filed a lawsuit against the farm-equipment maker to force it to restore their previous health insurance coverage.

The lawsuit—filed in U.S. District Court in Davenport, Iowa—accuses Deere of reneging on a promise that some 5,000 salaried workers who retired after 1993 would be eligible for the same coverage in retirement that they had while they worked for the Moline, Illinois-based company.

The retirees say Deere changed the coverage early this year to plans that cost more, particularly for prescription drugs, and provide fewer benefits.

“It’s going to be a long haul. We realize that,” says retiree William Gabbard, president of the Flex Retiree Organization, the group that filed the lawsuit. “We’re still willing to sit down and talk, but nothing has come of it.”

A Deere spokesman said the company plans to “vigorously defend” its actions in court and called the changes in coverage “appropriate and beneficial.”

The defendants said they’ll seek class-action status for the lawsuit.

Deere said escalating costs and inefficiencies in the old plans forced the company to adopt alternatives. By giving employees more choices for coverage, Deere predicts it will be able to manage its insurance costs more effectively.

The company disputes retirees’ contention that it’s being insensitive to former employees.

“This program represents a significant benefit that many retirees of other companies do not enjoy,” the spokesman said.

Filed by Bob Tita of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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