Abbott, Hospira Win Appellate Affirmation in Benefits Case

Abbott Laboratories and Hospira Inc. (HSP) won a U.S. appeals court ruling upholding a trial court finding the companies didn’t mislead workers about retirement benefit levels to induce them to leave Abbott for its Hospira spinoff.

Workers Myla Nauman, Jane Roller and Michael Loughery, representing a group of 8,000 Abbott workers who moved to Hospira, claimed the companies falsely promised that employees who made the switch would see no decrease of their benefits.

Hospira, a maker of intravenous drugs was spun off from the pharmaceutical company in 2004. The new entity eliminated a retiree medical benefit program immediately and its pension plan as of Jan. 1, 2005, according to trial court papers.

“Abbott told employees that Hospira would create its own benefits plan after the spin and that the Hospira plan could be entirely different from the Abbott plan,” the Chicago-based appeals court said today in the ruling written by U.S. Circuit Judge Diane Sykes.

“Those statements were entirely true; nothing in the record suggests otherwise,” the unanimous three-judge panel said, upholding the 2010 trial court ruling by U.S. District Judge Robert W. Gettleman in the same courthouse.

Abbott Laboratories (ABT) is based in Abbott Park, Illinois. The spinoff, Hospira, maintains its corporate headquarters in Lake Forest, Illinois.

The case is Nauman v. Abbott Laboratories, 10-2272, in the 7th U.S. Circuit Court of Appeals (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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