Retiree health benefits cut spurs lawsuit

Posted Aug. 17, 2009, at 10:48 p.m.
Last modified Jan. 30, 2011, at 12:14 p.m.

MILLINOCKET, Maine — A Town Council vote in May to cut health care benefits to 48 retired town employees has set off a class-action lawsuit against the town filed by some of the retirees and three town workers.

Police Chief Donald Bolduc, Public Works Director Dennis Cox and police Officer Jon Glidden are among the 33 plaintiffs. The plaintiffs seek unspecified monetary damages, including restored retiree health benefits, court costs, attorneys’ fees and “other relief the Court deems just and proper,” according to paperwork released Monday by Penobscot County Superior Court officials.

The plaintiffs claim that the council’s vote represented a breach of contract — a broken promise of lifelong life and group hospitalization insurance coverage that, when made decades ago, caused them to seek less pay.

In its counterclaim, the town charges that the four-count lawsuit should be dismissed. The plaintiffs, the town claims, failed to exhaust all administrative remedies, improperly filed their claim as a group, and lack the right to challenge a council decision in civil court because the council was following procedures outlined in the town charter.

Such a challenge is better suited to charter revision. The council was well within its rights to make the policy change, the town’s attorneys claim.

Town Manager Eugene Conlogue and plaintiff Reid Campbell, a retired police captain, declined Friday and Monday, respectively, to comment on the pending lawsuit.

Town officials typically decline to comment on pending court cases, Conlogue said.

Campbell said that he had not yet seen the documents filed by the group’s attorney, John K. Hamer of Rudman & Winchell of Bangor.

“The truth is that I don’t dare say anything,” Campbell said Monday.

Hamer is due back from vacation today, according to workers at his office.

Bolduc, Cox and Glidden joined the lawsuit, according to the documents, because they expect to claim the lost benefits when they retire.

Their lawsuit also seeks judicial review of the town’s actions and claims unlawful taking of property without just compensation and two types of claims for breach of contract.

Citing rising costs, the council voted 7-0 on May 14 to eventually end the free health care benefits paid to the retirees. Since 1999, the town’s portion of retiree health benefits has increased 89 percent to 112 percent, or from as little as $282.40 a month in 1999 to $599.44 a month in 2009, under a typical plan, Conlogue said at the time.

A projection done in 1999 predicted the cost of retiree health benefits rising from $399,000 that year to $837,000 annually by 2009 — an almost dead-on prediction, he said.

Under the town’s plan, starting in September the retirees will pay $47.96 to $151.30 a month for health benefits depending on the plan and number of people covered. The town pays the rest, but looks to phase out paying retiree health benefits, Conlogue said.

Retirees will absorb all rate increases starting in January.

Given the town’s radically depleted population since 2000, the temporary shutdown of the Katahdin Avenue paper mill — the town’s largest employer — decreasing amounts of outside aid and the recession, the cuts were necessary, Conlogue said.

Councilors could make the cut unilaterally, as the benefits are part of the town’s personnel policies, which the council is authorized to control as part of the town charter, Conlogue said.

No hearing dates have been set, court officials said.

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