Former Ford Motor Company employees have filed a proposed class action lawsuit in which they allege the automaker robbed managers of millions of dollars in pension benefits to which they were entitled under federal law.
Former Ford Motor Company employees have filed a proposed class action lawsuit in which they allege the automaker terminated managers classified LL1 through LL5 based on their age in an attempt to rob them of millions of dollars in pension benefits to which they were entitled under the Employee Retirement Income Security Act (ERISA).
The 48-page lawsuit out of Michigan explains that managers who were hired before January 1, 2004, were eligible for a supplemental retirement benefit upon either attaining 30 years of service with Ford or turning 55 years old with at least 10 years of service. According to the plaintiffs, Ford, with the help of an algorithm developed by non-party Boston Consulting Group, attempted to avoid its obligation to pay these greater retirement benefits by implementing a restructuring plan known as the Salaried Involuntary Reduction Process (SIRP).
According to the suit, SIRP, under the guise of reducing operating expenses, debt and pension liabilities, was put in place to target managers for separation from the company just before they reached the aforementioned retirement benefit milestones.
“This automated system was deliberately programmed to target older and higher pension-cost salaried employees based on legally protected characteristics including the employee’s proximity to retirement benefit milestones or the employee’s age,” the complaint reads.
The lawsuit alleges that once SIRP was rolled out, Ford then deliberately denied or concealed the managers’ rights under ERISA to apply for a bridging benefit that would allow them to be awarded greater retirement benefits despite not achieving the relevant “30 and Out” or “55 and 10” milestone. Further, the workers, the case goes on, were not permitted to apply for open positions with the company and were instead offered severance packages upon the condition that they sign a release of claims against Ford. This apparent scheme allowed Ford to pay separated managers just a “fraction” of what they would have received if permitted to reach the age or service milestones, the case claims.
The lawsuit argues that under ERISA, Ford was not permitted to make adverse employment decisions “motivated by an intention to deprive employees of retirement benefits for which they would become eligible through continued employment.”
“This systemic and automated form of age bias made Plaintiffs more vulnerable for separation,” the suit reads, adding that Ford reportedly promoted younger managers to replace the plaintiffs upon their separation from the company.