The Independent

 

Retirees Lose Case, Consider Options

 

Posted: Saturday, June 4, 2011 12:00 am

 

A judge in Oakland last week ruled against Lawrence Livermore Lab retirees who hoped to force the University of California into taking them back into UC medical care programs.

 

The ruling angered Joe Requa, head of the UC Livermore Lab Retiree Group, which filed suit in Oakland Superior Court last August after raising more than $150,000 to cover expected legal costs.

 

"We never got to the issues we intended to litigate," he said. "We never got to present our claims."

 

The suit was filed after Requa and others spent more than a year using less formal means to try to restore UC medical benefits. The retirees had come to depend on UC group health coverage under a succession of contracts that ended in 2008, after more than 50 years. That year, a new, for-profit contractor took over Laboratory management from the University.

 

At the time, a new contract promised continued benefits that were "substantially equivalent" to UC's group plans. However, the contract wording was changed a year later under circumstances that have never been explained to retirees.

 

Complaints about being dropped from health care became common. Retirees worried about rising costs, declining service and the loss of a helpful benefits office that used to resolve medical insurance problems from the University's headquarters in Oakland.

 

Last week, in denying Retiree Group claims, Superior Court Judge Roesch wrote that court intervention is not warranted merely because "a different retirement medical benefits plan...or one that is less favorable" has been substituted for the one retirees were used to.

 

He found that the retirees had failed to make a case for a written or oral contract for lifetime medical benefits, despite producing University and Laboratory handbooks and employment brochures dating to the 1970s and oral statements from the 1960s.

 

"The Court does not find any of the excerpted language...sufficient to create either an express or implied contract," the judge wrote in his ruling.

 

"None of the handbook or booklet excerpts contain language clearly promising lifetime retiree medical benefits at a specific level of benefits (or at all) in exchange for employment."

 

Requa said that he would be meeting with Retiree Group attorneys late this week to consider future possible courses of action. He declined to predict whether they would file an appeal.

 

In the meantime, he still believes that the University made a lifetime commitment to provide medical programs to its employees, and the court ruling allows UC to get away with going back on a promise. "So the University can lie to us with impunity!" he complained.

 

At the same time that the Superior Court case was being heard, the University was considering possible cost-lowering approaches to medical care similar to those that Livermore Lab retirees have been objecting to. For example, at a recent UC-wide retirees meeting, a representative from ExtendHealth gave a briefing on what her company could bring to UC employee and retiree health plan administration across the state. ExtendHealth is one of the companies hired by the Livermore Lab that many retirees have complained bitterly about working with.

 

As for the Superior Court ruling, at least one part seemed somewhat puzzling. Judge Roesch interpreted the language of early UC/Lab employment documents as "replete with conditional language" that demonstrated that the University had not made promises to maintain health coverage. But then he quoted three partial statements from those documents that arguably encourage the reader to think that promises were being made or agreements offered. He cited:

 

"You may continue your University-sponsored group health plan coverage...after you retire,"

 

"Coverage can be continued as long as....," and

 

"If the conditions...are met...."

 

The ruling is based on other arguments as well, including the absence of any record of decisions by UC Regents to offer lifetime medical benefits. Under the state constitution, the Regents are the authority that would have had to make such a commitment, the ruling found. Since 1990, the University has made it clear that "retiree medical benefits were not vested and could be modified or eliminated at any time."

 

The ruling also found that the retirees had in some cases mistakenly cited statutes regarding pension vesting to support their claims for medical benefits. "No cited authority finds retiree health benefits and pension benefits to be synonymous," the judge wrote.

 

The University declined to comment.