Steelworkers Reach Settlement with FreightCar America.

FreightCar America to Provide Pensions and Severance Pay to Johnstown Workers When Company Laid Off Workers to Avoid Pension Eligibility

FreightCar America Class Action Settlement

Agreement of Settlement

A(i). Proposed Notice

A.  Notice Order

B. Order and Final Judgment

C. List of Employees Entitled to Benefits of Settlement

D. Amended Pension Plan Language

Cover Letter to Class Notice – Final

FreightCarAmerica Class Notice

Contact Denny Conahan 814-536-0703

Johnstown, Pa. – The United Steelworkers announced today that a tentative settlement has been reached with FreightCar America (FCA) that will provide pensions to 201 union members and severance pay to another 110 who were laid off in 2007.  The settlement will resolve a lawsuit supported by the Union which claimed that FCA unlawfully laid off employees in 2007 in order to deprive them of pension benefits, and will resolve an arbitration won by the Union which found that the Company violated the Union’s contract by laying off employees with 20 or more years service

Most of the affected workers were hired during 1988-89 and were nearing pension eligibility.  FreightCar’s CEO called the union committee into his office during the summer of 2006 and told them that he would not allow the workers to accrue enough seniority to qualify for pensions.

In addition to the mass layoffs, the company ceased railcar production, removed equipment and assigned the work to other locations.

The union immediately supported an ERISA lawsuit asserting that layoffs motivated by a desire to prevent pension eligibility constituted unlawful discrimination.  In January, Judge Kim Gibson of Johnstown federal district court ordered laid off employees reinstated.  The order was appealed by the Company, which also sought to vacate the arbitration award.

The settlement will resolve all outstanding issues between the parties, It will grant pensions to workers who would have worked until the end of 2009 and qualified for a pension.  Most pensions include retiree healthcare as well as a $400 monthly supplement until age 62.  It also provides $750,000 to be disbursed to union members; settles all outstanding grievances with monetary payments to individual members; and recognizes an official plant shutdown date of May 15, 2008 for the purposes of collective bargaining, providing vested pension benefits to additional employees.

“We’ve gotten justice for our members,” said USW Local 2635 unit president Jeff Anderson.  “My only regret is that we’ve lost jobs in Johnstown because the company took our technology and our processes and moved them to other locations.

“We’ve been making rail cars in Johnstown since 1901,” he said.  “History will record that we were noted for making two things – freight cars and company millionaires,” he said.  “Now, both are gone but we have salvaged fair treatment for our members with this settlement.”

The settlement must be approved by the Court.