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July 15, 2013

FreightCar, union in benefits row

JOHNSTOWN — FreightCar  America and a union representing hundreds of its former Johnstown area retirees are suing each other in court over the fate of health care and life insurance benefits.

The lawsuits, including a union suit filed listing five Greater Johnstown area residents as plaintiffs, were filed within days of one another in separate federal courts over FreightCar’s intentions to cut retiree health care benefits in October.

“Class members’ retiree health and life insurance benefits were the subject of labor agreements between the defendant corporate entities and the USW,” union attorneys wrote in their 27-page complaint, noting retirees worked under the United Steelworkers union at the time. “(FreightCar’s) reduction of, and announcement of reduction of, retiree benefits infringes upon those rights.”

The union is seeking a jury trial.

FreightCar’s suit is seeking permission in federal court to drop certain benefits. In the suit filed last week, the company is seeking a declaratory judgment, claiming it has the right to unilaterally eliminate benefits under the Employee Retirement Income Security Act.

The company’s attorneys said FreightCar filed the suit after years of attempts to adjust medical and life insurance terms failed.

 “The company has engaged in voluntary negotiations for the past two years ... to reach a consensual agreement regarding such medical and life insurance benefits, but the parties have been unable to reach a final agreement,” the lawsuit states.

The union counters that both sides agreed in writing that no changes would be made to benefits unless both the company and union agreed to them.

“(United Steelworkers) never agreed otherwise,” Tony Montana, a USW communications representative, wrote in a news release.

It is the latest of many legal battles between the company and many of its employees through the years.

Originally a Bethlehem Steel Corp. shop, FreightCar operated as Johnstown America – and then Johnstown America Corp., until 2004.

The name was changed to FreightCar America in 2004.

Four years later, the shop closed despite lawsuits seeking to block the move.

The union says FreightCar tried in 2002 to eliminate retiree benefits. It prompted countersuits and eventually a settlement that allowed the company to reduce its payment contributions but benefits to continue.

A FreightCar retiree said the company came to them this spring to secure new concessions from the union.

Just months later, letters were mailed notifying retirees that the company wants to drop health care and life insurance altogether.

“It’s never-ending,” said Dennis Conahan of Ferndale, who worked at the shop for 21 years. “We thought they’d never bother us again and here we are back at it.

“You work your whole life somewhere. You make them a lot of money and they end up doing this to you,” he said.

Conahan said FreightCar notified employees by letter last week that they hope to cut their health care effective Oct. 1.  Most of the retirees at risk are from the Johnstown area, he added.

FreightCar’s lawsuit was filed the same week in Chicago, and the class action suit representing hundreds of FreightCar retirees at Western District Court in Johnstown on July  9, documents show.

Plaintiffs in the union suit include Anthony J. Zanghi of Johnstown, Kenneth J. Sowers of St. Benedict, Dominic McCuch of Windber, James Hohman of Johnstown and Darrell Shetler of New Florence.

The suit notes that they represent hundreds of other retirees potentially impacted.

They are being represented by the Pittsburgh-based law firm Feinstein Doyle Payne and Kravec.

FreightCar is represented by Chicago law firm McDermott, Will & Emory.

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