GM might have to pay hundreds of millions of dollars in a lawsuit intended by its workers in Canada three years ago.
The Globe and Mail reported that almost 3, 000 salaried retirees intended the lawsuit against GM Canada in May 2010, accusing the automaker of cutting their insurance and health benefits with no right, when it had to deal with financial troubles during the crisis in 2008. A Toronto judge, who validated the claim, said that the US automaker had not used the proper language in its contracts and therefore it might not have had the right to slash its non-executive employees’ benefits.
The judge said that in the contracts GM had promised its employees “that they could rely on the promised health care and life insurance benefits”, and therefore were stunned when the automaker had reduced their benefits by huge margins, in some cases by as much as 80%. If the decision will end up holding through the appeal process, GM will have to pay more than $300,000.
“These are people who were planning their retirement based on what was promised to them,” Louis Sokolov, the group’s lawyer, said in an interview with The Globe and Mail.