REUTERS - November 8, 2004

Abbott, Hospira sued for cutting employee benefits

 LOS ANGELES, Nov 8 (Reuters) - Former employees of the hospital products division of Abbott Laboratories Inc. (ABT.N: Quote, Profile, Research) on Monday sued Abbott and Hospira Inc. (HSP.N: Quote, Profile, Research) for cutting their benefits.

 The complaint, filed in the U.S. District Court in Chicago, stems from Abbott's August 2003 decision to spin off its hospital products business into a separate company, which was later named Hospira.

 About 10,000 of Abbott's U.S. workers were reclassified as employees of Hospira.

 According to the complaint, Hospira later said it would not provide the spun-off employees with retiree medical benefits and, after 2004, they would not be able to earn additional pension benefits in their defined benefit plan.

 "Although Hospira claims that its benefits package is 'competitive on all fronts' with its peers, there is no question that Hospira is not even competitive with Abbott, where employees who were retained by the company continue to earn pension benefits and retirees receive medical coverage," said Paul Mollica of Meites, Mulder, Burger & Mollica, co-counsel for the plaintiffs.

 "We are confident that all actions with respect to the spin-off were legal and appropriate and intend to vigorously defend Hospira against these claims," said Hospira spokeswoman Stacy Eisen, noting that the company has not yet seen the suit.

 A spokesman for Abbott also said the company had not been served with the complaint, but it has complied with the law.

 "Abbott created Hospira as an independent company to provide shareholders with equity investments in two separate companies that are focused exclusively on maximizing opportunities in their distinct markets," spokesman Jonathon Hamilton said. "Allegations that Hospira was created for any other purpose are unfounded and without merit. Abbott will vigorously defend against these allegations."

 Attorneys representing the plaintiffs are seeking class certification for 10,000 former Abbott employees, as well as reinstatement and restoration of lost benefits. They allege that the companies violated the employees' rights to benefits under the Employee Retirement Income Security Act of 1974 (ERISA).