Plan members take Hospira to court

A Chicago federal district court judge upheld the plaintiffs' allegations Abbott created a separate arm, Hospira, to interfere with employees receiving benefits and refused to re-hire staff transferred to the new business for two years to stop them being able to revest in any company pension system.

The court found "the trier of fact could conclude from this evidence that Abbott knew Hospira would reduce or eliminate benefits but deliberately concealed this information from plaintiffs."

The court opinion continued: "Abbott's position is not helped by the evidence that at the time Abbott's management was structuring the spin-off transaction, confidential, lump-sum 'transition bonuses' were offered to several 'key' Abbott executives to compensate them for their lost benefits arising out of their transfer to Hospira."

Steven Sprenger, counsel for the plaintiffs, from law firm Sprenger and Lang, said: "The court's ruling clears the last remaining hurdle for the plaintiffs to seek restitution for Abbott Labs' violations of federal law that caused 10,000 people to lose valuable retirement benefits."

Sprenger continued: "We are anxious to get this case to trial as quickly as possible."

When the plaintiffs originally submitted the filing in November 2004, they also alleged the company violated section 510 of the Employee Retirement Income Security Act (ERISA).

The court found there was a case to argue that Abbott had created a pension scheme but had the specific intent of avoiding projected benefits.

The prolonged history of the case had been in and out of court with appeals to dismiss the claims from the companies.

The court set a status date to discuss case progress on 25 July 2008.

No one at Hospira was immediately available for comment.

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