Some Sprint and Embarq retirees will continue long court quest for lost benefits

A federal appeals court has ruled that Sprint, formerly Sprint Nextel, and its spun-off company, Embarq, had the right in 2007 to alter retiree benefits packages.

But the recent appellate decision also produced a partial victory for about 1,000 retirees who retained the right to pursue claims for loss of income or other damages.

A Kansas City attorney, Diane Nygaard, one of several lawyers around the country representing the retirees, said the case is set to go back before a federal trial judge on April 15.

Attorneys for the companies referred comment to CenturyLink. In 2009, CenturyTel acquired Embarq and began operating under the name CenturyLink. A spokesman for CenturyLink said the company doesn’t comment on pending litigation.

The retirees’ case hinges on claims that they were enticed to retire early based on the companies’ assurances that their retirement benefits would be secured if they accepted certain early retirement offers.

A group of former employees filed suit in 2007 after they were told that once they were eligible for Medicare they no longer would receive company-provided health insurance or subsidies for Medicare premiums. Some retirees reported substantial cost increases in health insurance costs. Life insurance benefits also were reduced.

Under a “reservation of rights” clause, Sprint/Embarq had authority to cut back the retirees’ life insurance and prescription drug benefits, and there was no contractual assurance of lifetime benefits, the appeals court in Denver said.

But the panel also ruled that retirees could pursue claims for loss of income based on the incentives they received to retire early and seek reinstatement of life insurance benefits they lost.

The appellate court also dismissed the retirees’ claims of age discrimination.

This story was originally published March 6, 2015 at 11:08 AM with the headline "Some Sprint and Embarq retirees will continue long court quest for lost benefits."