Four former employees of the Lawrence Livermore National Laboratory whose retiree medical benefits changed after the lab's management changed in 2007 are suing the UC Board of Regents, saying they have a right to the university-provided medical benefits they were promised.
Plaintiffs and Livermore Lab retirees Joe Requa, Wendell G. Moen, Jay Davis and Donna Ventura filed a petition for writ of mandate in August in Alameda County Superior Court and the first motions are scheduled to be filed this December.
jurvetson/FlickrLawrence Livermore National Laboratory
Requa and his fellow retirees began working at the Livermore Lab as scientists, engineers and support staff in the 1960s and 1970s. At that time, the UC managed the lab on its own, through a contract with the U.S. Department of Energy.
Requa, Moen, Davis and Ventura all retired between 1999 and 2006, after which they received UC retiree medical benefits. It was in 2007 that the Department of Energy awarded the Livermore Lab contract to a new operator, Lawrence Livermore National Security LLC, a private consortium that still includes UC but also includes Bechtel Corp., The Babcock & Wilcox Company, Washington Group International and Battelle.
According to the UC, the Department of Energy required the consortium to sponsor all medical benefits for Livermore lab retirees. That group includes about 5,000 people, the retirees' lawyers said. Since the switch, monthly premiums and copayments for medical visits and prescriptions have increased for some of the retirees, according to the complaint.
After Requa found out the consortium would be taking over retiree medical benefits, he says he showed up at the open enrollment meeting with a straw hat and a stack of business cards.
"I didn't think it was right for them to be in charge of my medical," the retired computer scientist said. "I went down and did a little rabble-rousing and found a few folks that would listen to me."
Requa and others started a website and a fundraising drive, raising $150,000 for a legal defense fund. Now, their lawyers contend that the Regents breached the contract with the retirees by shifting their benefits to the new entity. They say the university improperly separated them from the larger population of UC retirees.
Lawyers for the UC Regents, meanwhile, say in court documents that there was no contract that promised perpetual university-provided medical benefits.
"No contract – not a single written word – has been identified by petitioners that binds or could bind the regents to provide lifetime UC-sponsored medical benefits to LLNL (Lawrence Livermore National Laboratory) retirees," the Regents' lawyers wrote in court documents.
Attorneys for the retirees argue that a contract can be formed in a number of different ways, and that the university formed a contract with these 5,000 former employees that promised lifetime coverage to the retirees through written policies, documents issued to employees over the years regarding retirement medical benefits, and more.
"A number of courts have held that when a public employee accepts work under a specified set of terms, those terms become part of his employment contract, and the public employer is not free to change them unless it reserved the right to do so when the employee accepted the job," attorney John Stember said.
One of the biggest concerns for the retirees, Stember said, is that they have been pooled together with a smaller, older and less healthy group of people by being separated from the rest of UC retirees. They fear their benefits will become increasingly expensive as a result.
"It's not about an employer making changes in order to cover some of the increasing costs of health care. It's just a desire to pawn these folks off on to other plans and relieve UC of any obligation," said Dov Grunschlag, also an attorney for the retirees.
The lawsuit comes as the UC system is moving to lower the expense of its pension and retirement health benefits. The UC Regents in September approved increases in the amount that employees must contribute to their pensions. The Post-Employment Benefits Task Force has also proposed reducing the UC's share of the cost of retiree health insurance premiums for retirees receiving the maximum UC contribution.
Stember and Grunschlag say that if the court decides the four retirees should be part of the university system, the decision could affect the thousands of other lab retirees who were once covered by the UC system.
The university seemed to acknowledge that possibility in a case management statement filed this month:
In light of this action's potential for creating new law that will affect thousands of retirees who worked at LLNL, and the potential balancing of parties' rights and the taxpayers' burden, this case requires exceptional judicial management to avoid placing unnecessary burdens on the Court or the litigants, expedite the case, keep costs reasonable and promote effective decision-making by the Court, the parties, and counsel.
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