Raytheon retirees have day in court

Appeals panel rules company was wrong to ax health benefits
2012-05-22T00:00:00Z 2012-05-22T17:21:22Z Raytheon retirees have day in courtArizona Daily Star Arizona Daily Star Arizona Daily Star

An appellate court has reaffirmed an earlier ruling that Raytheon Missile Systems acted improperly by cutting off health benefits to union retirees.

In a ruling issued Monday, a three-judge panel of the 9th Circuit Court of Appeals also affirmed an earlier ruling rejecting the retiree plaintiffs' claim for punitive damages.

Raytheon officials didn't respond with a comment on the ruling Monday.

Court records show that Raytheon and its predecessor, Hughes Missile Systems, had agreed through successive labor contracts to pay the health-insurance premiums of anyone at least 55 and retiring before reaching age 65.

But a new contract in 2004 ended that practice, and the company began billing the retirees for the coverage.

Members of the International Association of Machinists Local 933 sued Raytheon over the issue in 2006 and won a federal court ruling in 2008. A different three-judge appellate panel affirmed the lower-court ruling in 2010, but Raytheon asked for a rehearing.

The decision affects about 600 retirees who were forced in 2004 to start making payments toward their retirement coverage. Those payments continued until a trial judge ruled in favor of the retired workers and ordered the company to start picking up the cost again. The ruling also means Raytheon must reimburse workers for premiums they paid between 2004 and the 2008 trial court ruling.

In a separate and pending case, another group of Raytheon retirees is suing the company for reimbursement of out-of-pocket medical costs they incurred when they couldn't afford to keep up with the insurance premiums.

Jim Watson, directing business representative of Machinists' Local 933, said Monday was a "great day" for the retirees, noting that some were faced with premium costs of $400 to $500 per month after Raytheon's decision.

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