Ingersoll Rand Jury to Weigh Lawsuit on Worker Incentive Payouts

Ingersoll Rand is set to go to trial today in a lawsuit over how much it owes to 130 employees who claim they deserve bonuses under an incentive plan tied to the company’s sale in 2004 of Dresser-Rand Group Inc.

Workers sued in federal court in Newark, New Jersey, where they seek payment under a sales incentive plan dated September 2000. Jurors will weigh whether Ingersoll Rand owes $11 million, as the company claims, or $72 million, as workers seek. Workers say the judge can add interest of at least $25.5 million.

Ingersoll Rand, which makes heating and ventilation equipment, offered the bonuses when it began trying to sell Dresser-Rand, which makes compressors and turbines. After Dresser-Rand was sold in 2004 for $1.2 billion, Ingersoll Rand said the 2000 plan no longer applied. Workers sued, and a federal judge ruled the plan remains in effect, setting up the trial.

“This is a classic example of overgrab by corporate America at the expense of the people who do the work,” said Mark Lanier, a lawyer for the plaintiffs. “Here they are six, seven years later, still unpaid. You’ve got to keep your deal. Your word is your bond.”

Allan Tananbaum, a deputy general counsel for Swords, Ireland-based Ingersoll Rand, declined to comment on the case.

Some of the best-known U.S. trial lawyers will be in the courtroom. Barry Ostrager of Simpson Thacher & Bartlett LLP in New York, who has represented J.P. Morgan Chase & Co., Swiss Re Ltd., and many other companies, will defend Ingersoll Rand.

Merck, Clemens

Lanier, who won verdicts against Merck & Co., Caterpillar Inc., and other companies, will be joined by Rusty Hardin. He has represented former Major League Baseball pitcher Roger Clemens and Arthur Andersen LLP, the now-defunct accounting firm convicted of obstructing a government investigation into Enron Corp. The Supreme Court overturned that verdict.

Workers eligible for the payouts were allotted “sale value units” tied to the net price of the Dresser-Rand transaction. Ingersoll Rand claims the 704,196 units at issue in the trial are each worth $16.18, while workers sale they are worth $102.74.

The company says several deductions reduced the net price that set the SVU value, including taxes and capital investments.

The case is Nye v. Ingersoll Rand Co., 08-cv-03481, U.S. District Court, District of New Jersey (Newark).

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