Cincinnati, OH, Feb. 22--Arguing that their former employer misled them, a group of Formica Corp. retirees filed suit Friday to prevent the laminate maker from reducing their monthly pension checks, according to the Cincinnati Enquirer.
The class-action lawsuit was brought by Frank Ramsey of Loveland, who retired 18 years ago, and six others on behalf of 300 retirees. It seeks a temporary restraining order to stop the company from reducing payments by varying amounts.
U.S. District Judge Sandra Beckwith denied the temporary restraining order after company lawyers said it was too late to change the checks going out next week.
But she set a hearing for March 2 on the retirees' request for a preliminary injunction and other motions.
A spokesman for the company had no comment on the suit, filed initially in Hamilton County Common Pleas Court and moved to federal court after the company argued that the case concerned federal retirement law.
But Marc Mezibov, a lawyer for the retirees, argued that the suit is over negligent misrepresentation and breach of promise by the company and not federal retirement law.
The lawsuit seeks damages on behalf of the retirees, many of whom took early retirement from the company based on benefits the company said they would receive.
"The decisions to retire were induced by financial incentives from the company as well as representations by the company" about the monthly benefits "each retiree would receive for the balance of his or her life," the lawsuit says.
Last month, Formica notified the retirees that a company auditor determined that 440 of 624 retirees in the defined-benefit pension plan from 1985 to 1998 were receiving incorrect payments. The company said about 295 were receiving overpayments and 145 were being underpaid. The overpayments totaled about $1 million and the underpayments about $500,000, the company said.
Formica currently is emerging from Chapter 11 bankruptcy reorganization.
Besides recalculating the payments starting last month, the company said it was required by federal law to recover the overpayments, which in some cases amount to thousands of dollars.
The retirees seek damages for relinquishing their employment and giving up seniority rights, future wages, salaries and other benefits.
Christian Jenkins, partner in the law firm Mezibov & Jenkins, said the extent of the damages hasn't been calculated, but it could be many times the $1.5 million miscalculation in the pensions.
