Loyalty? Fair Disclosure?

I’ve always had a good opinion of Motorola. They made good products and treated their employees well. But, since they have fallen out of the financial pantheon, they seem to have had less regard for their employees, at least those who are now earning a pension after spending their working life with the company.

Take the case of Fred Loewy. He worked at Motorola’s Scottsdale plant for 35 years until retiring in 1998 at the age of 73. He wanted to maximize his pension and Social Security payments. Well, 8 years later he finally got what he was entitled to. He was the victim of poor Federal law and shoddy, if not illegal, practices by Motorola.

At first reading the law seems fair: any retiree who disagrees with a company’s benefits decision has a right to appeal it and to see the benefit plan documents it is based on. That last half is where Fred and most other retirees got screwed. He, like most of us, did not know all of the documents he should ask for and Motorola did not volunteer the information. And, as with most laws, there is a statute of limitations. While Motorola was stonewalling Fred, the clock was ticking. If they stalled long enough, the company hoped Fred’s rights under the law would vanish.

Like many pension plans, Motorola’s reduced your pension by one-half of your Social Security payment. By working beyond 65, Fred increased the monthly payment he would receive from the government. He felt that Motorola should reduce his pension by one-half of what he would have received at 65, not that received at 70. It seems like a very simple argument to me that can be proved or disproved fairly quickly by looking at the paperwork. Motorola did not see it that way. First, they would not acknowledge receipt of Fred’s letters, although they were send via certified mail. Then they issued a couple of checks with no explanation. Then, they turned things over to an attorney, who made false statements.

Fortunately, Fred was a persistent guy and took the company to court. Motorola lost and has to pay Fred and 500 other retirees the money they are owed. But, the law remains the same and who knows how many times a company is cheating a retiree?