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LONDON, Ontario--Labatt Brewing Co. Ltd. faces a potential class action lawsuit over its decision to cap health care benefits for its retirees.
The breach of contract lawsuit, which seeks class action certification, was filed by three former employees of the brewing company in Ontario Superior Court of Justice on Wednesday.
The suit, filed against the London, Ontario-based company and its Sao Paulo, Brazil-based parent AmBev, is in response to the company's decision to place limits on health care benefits for current retirees and employees retiring before Jan. 1, 2009.
In a letter dated Dec. 4, 2006, Labatt said that it would implement a new benefits program effective March 1, 2007 instituting a $50,000 Canadian ($46,751) lifetime cap on health benefits for retirees and employees who retire prior to Jan. 1, 2009, according to the complaint. In contrast, the company imposed a $1 million Canadian ($935,016) lifetime limitation for health care coverage for active employees, the lawsuit said.
Prior to March 2007, the company provided its nonunionized salaried retirees with comprehensive health and insurance coverage, including 100% prescription drug coverage after a small annual deductible and no lifetime or annual maximum. The company also provided several other benefits, including dental coverage, which also were reduced.
By unilaterally reducing retiree health care benefits, Labatt breached its employment contract with the retirees, according to the lawsuit. AmBev, which acquired Labatt in 2004, instructed Labatt to take action in order to cut costs, the complaint said.
The lawsuit seeks to reinstate the health care benefits under the benefit plan prior to March 1 and to bar the companies from making any adverse amendments to the retiree health care package in the future. The lawsuit also seeks monetary damages, including punitive damages of $50,000 for each class member and reimbursement of any costs the retirees incurred as a result of the changes to the benefits program.
A Labatt spokesman could not be immediately reached for comment.