Deere & Co. retirees hear update on complaint

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By Jennifer DeWitt | Saturday, May 17, 2008 |

Deere & Co. retirees embroiled in a dispute over their health-care benefits were advised Friday that any legal action against their former employer will be a long process.

More than 500 Quad-City retirees filled the gymnasium at Christ the King Catholic Church in Moline as leaders of the Flex Retirees Organization, or FRO, offered an update on the dispute.

“This doesn’t happen in 30, 60 or 90 days,” Bill Gabbard, FRO’s president, told the crowd.

FRO leaders assured the retirees that the Arizona law firm hired by the retiree group already is investigating documents turned over by FRO’s officers and has begun conducting telephone interviews with retirees.

Gabbard, who retired after 43 years with Deere, said the retirees had contributed more than $270,000 to FRO. Of that, he said FRO has spent $95,000 to retain the Phoenix law firm of Martin & Bonnett. “We need to have a healthy legal defense fund no matter where we end up,” he said. “Say we reach a compromise; who’s to say what Deere will do in 2009, 2010.”

The meeting marked the last meeting in a weeklong tour that took FRO representatives to the Iowa communities of Ottumwa, Dubuque, Des Moines and Waterloo. Leaders estimate they have met with 1,200 retirees throughout the week. On May 29, the group will hold its first meeting in Kansas City, Kan.

FRO was formed last fall after Deere rolled out a new health-care plan for 5,000 of its retirees — mostly salaried workers, who are known as flex retirees. The changes affected those who retired on or after July 1, 1993, as well as future retirees. The new plan, which FRO has argued is not equivalent to what they were promised at retirement, went into effect at the beginning of the year.

Deere has argued that new plan does not represent a cut in benefits, but that it leverages the tax advantaged health savings accounts as well as changes in Medicare.

The FRO update meeting also was a chance for its leaders to encourage retirees to sign and return the personal retainer agreements they are receiving in the mail from the law firm.

FRO member Tom Grooms, who worked in Deere’s industrial relations and retired after 35 years, said FRO has entered into a retainer agreement with the Arizona law firm and will be responsible for paying legal fees. “But FRO does not have a cause of action or standing to bring a suit against Deere. You and I do,” he said. “The purpose of the agreement is to establish an attorney-client relations between you, FRO and Martin & Bonnett.”

Membership into FRO has been loose to date, operating under the assumption that the group represented all the affected retirees and their spouses. But Gabbard said eventually a more structured organization will require two things: that each member signs the retainer agreement and is a financial contributor to FRO.

Grooms said “if it becomes necessary to go to court,” the action could result in more than one lawsuit because of the different retirement plans that covered the 5,000 retirees. Those who do not sign the agreement could be left out of any class-action lawsuit.

“The retainer gives the lawyers an attorney-client relationship with each of us,” Gabbard said, adding that the retirees will need to be named as plaintiffs if it comes to a lawsuit. “FRO can’t be a plaintiff.”

FRO organizers said all the group’s 16 directors and officers have signed the individual retainer and contributed to the defense fund.

“We felt we had a promise that we’d take our health care benefits into retirement,” Gabbard said. In the wake of the changes, FRO also is continuing to investigate the possibility of group insurance for its membership, but has not received any information to date.

Gabbard said there’s “always a remote chance Deere will want to talk to us” and the group could reach a compromise. But he said there have been no meetings with Deere leadership since last fall.

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.

WHAT IS FRO?

Flex Retirees Organization, or FRO, was formed in October after Deere & Co. rolled out a new health care plan for about 5,000 retirees and their spouses.

FRO has been working to restore its original benefits, claiming Deere is not providing the retirees with a comparable health benefits plan. FRO has retained an attorney and threatened to file a lawsuit.

The affected group, referred to as flex retirees, are mostly salaried retirees.

FRO’s membership represents all levels of management from retired vice presidents to clerical staff. FRO is incorporated in the state of Iowa.

All Deere retirees are eligible to join FRO. The group can be contaced through its Web site, flexretirees.org.