Former executives are among a group of non-union Labatt retirees who launched a class-action bid yesterday, claiming the beer maker and its Brazilian parent broke a promise to provide them with almost unlimited health benefits.
In a statement of claim filed in the Ontario Superior Court, the plaintiffs accuse Labatt of breach of contract, conspiracy and unjust enrichment by capping benefits for retirees.
"This unilateral change constituted a breach of each (employee's) contract and violates his or her vested retirement rights and health protection benefits and those of their eligible dependants," the claim states.
Saying the company's actions were "arbitrary, callous and high-handed," the suit also seeks $50,000 in punitive damages for each member of the proposed lawsuit class, estimated at 900 retirees who were salaried and non-unionized, and 700 dependants.
One retiree is Bob Smith, who was director of information technology when he left Labatt after 25 years in 2005 and then retired.
Mr. Smith, 57, a married father of two, received a kidney from his son in early 2006 and worries his benefits will be exhausted within five years because he needs expensive anti-rejection drugs.
There was no immediate response from Labatt.
None of the claims, which also name the company's parent, AmBev of Brazil, has been proven in court.
In a letter last December to retirees, obtained by Canadian Press, Labatt announced the change to their benefits effective March 1, 2007.
Key among the changes was a cap on cumulative lifetime health and drug benefits at $50,000.
The letter said Labatt's premium costs for retirees had risen 44 per cent between 2002 and 2006, and, as a result, the company had "no choice" but to impose the limits.
"Our top priority is to provide benefits that give fair and optimal coverage for everyone, while at the same time managing our costs in the future," said the letter written by Marcio Froes Torres, vice-president at InBev, which controls AmBev.
"Continued premium increases of this magnitude are clearly not conducive to a sustainable business."
The letter also claims few retirees would ever exceed the limits, based on past experience.