9th Circuit Court of Appeals Rules in Favor of Raytheon Retirees


Tucson, Arizona – August 27, 2012 – In an amended opinion released on August 27, 2012, the 9th Circuit Court of Appeals denied Raytheon’s petition for rehearing, indicating that the Court would not accept any further petitions, and re-affirmed its opinion released on May 22, 2012 in which it upheld the opinion of Judge David Bury issued on August 5, 2008 that the Raytheon retirees and their spouses have a vested right to no-cost health insurance until they reach age 65.

The Collective Bargaining Agreements (CBAs) between 1990 and 1999 provided the retirees’ claim to company-paid medical benefits was a vested right. As a vested benefit, the Court ruled that Raytheon could not unilaterally take away that right, regardless of what the Company had written and included in plan documents.

The opinion by the 9th Circuit Court of Appeals written by Judge Berzon states “Raytheon expressly agreed to provide 100% company-paid healthcare coverage for eligible Retirees; that Raytheon’s obligation survived the expiration of the CBAs; and that Raytheon’s agreed-upon obligation could not

be unilaterally abrogated by Raytheon.”

Class Action Member Ron Geuder states , “ I am grateful that the 9th Circuit ruled in favor of the retirees; It has been a long a time coming and justice has prevailed. I am also grateful for the Local and International who stood by us so we good pursue and win this law suit. ”

Class Action Member Dave Lillie states, “This is a prime example on why workers should belong to a union. Without the Machinists Union, I am sure we would not have had this victory.”

Attorney Robert Gregory added, “This day has been long in coming. The retirees first filed their complaint in District Court in Tucson in January 2006, and the District Court ruled in their favor on August 5, 2008 when the Court granted the retirees’ motion for summary judgment. It has taken four additional years of appeals and petitions for rehearing by Raytheon for this final ruling to be made. The Ninth Circuit indicated in its August 27, 2012 opinion that it will not entertain any additional petitions by Raytheon in this matter. I am so pleased that the retirees have been rewarded with a hard-fought victory, and that their right to company-paid healthcare benefits as negotiated in the CBAs has been upheld. This is a victory not just for the Raytheon retirees, but for any retiree who received a promise from their employer in a CBA that the employer would provide healthcare benefits for the retiree.

Directing Business Representative James Watson added, “This is a great day for Old Pueblo Lodge 933 and our membership. The 9th Circuit got it right, it’s sad that some of our retiree’s did not live to see this day. I am very grateful to Robert Gregory who represented our retirees and to Dave Lillie, Ron Geuder, Mark Argraves and Clare L’Armee who were the class action representatives for this case. ”

Western Region General Vice President Gary Allen applauded the ruling saying ; “It is sad to think that a Company can sign a contract with its employees, and have no intention of honoring their promise. These benefits were part of the overall compensation that the International Association of Machinists and Aerospace Workers (IAM) negotiated with the Raytheon Company, on behalf of these workers. There was no confusion as to what the language meant. I congratulate Brother Watson, and everyone involved, for staying in this fight and demanding the fairness that our retirees have earned. This is a wonderful example of why it pays to belong to the IAM – our contracts are the finest in the industry, and our representatives are supremely dedicated to enforcing our agreements”.

IAM, Old Pueblo Lodge 933 has represented the hourly workforce at Raytheon Missile Systems/Hughes Aircraft since 1952. The IAM was founded in 1888, and represents more than 700,000 active and retired workers in North America.