Jury Denies Retired Teachers’ Claims Against School District

June 19, 2017 – After a week-long trial, a jury in Washington County decided that the Germantown School District is not liable to a class of 90 retired teachers for claims related to termination of the Wisconsin Education Association Trust Group’s Long-Term Care Plan.

In 1998, the District agreed to provide long-term care insurance through WEA Trust as a benefit for active employees in a collective bargaining agreement.  After retirement, WEA Trust gave retirees an option to continue long-term care coverage by paying monthly premiums at the group rate, at the retirees’ own expense.  In 2012, after Act 10, the District decided to discontinue long-term care as a benefit for active employees.  As a result, WEA Trust no longer permitted retirees to continue coverage at the group rate, but retirees were still given two options to continue coverage under the WEA Trust Plan.  The retirees could either continue coverage at an individually rated monthly premium which was higher than the group rate, or, they could obtain a “paid in full” policy by paying a single lump sum based on a projected present value of the premiums that would have been paid at the group rate.

The class of retired teachers sued the District, asserting three causes of action: breach of contract, breach of duty of good faith and fair dealing, and promissory estoppel.  The plaintiff class members argued they had a vested contractual right to continue long-term care coverage at the group rate under the WEA Trust Plan, or, in the alternative, they argued the District had promised retirees they could continue at the group rate and the retirees reasonably took action in reliance upon that promise.

At trial, the plaintiffs asked the jury to award more than $9.5 million dollars in damages against the District.  However, the jury determined that the class had not met its burden as to any of its three claims, and did not award any damages.

The District was represented at trial by the Buelow Vetter law firm.  If you have any questions about this case, or any issues related to employee retirement benefits, please contact Joel Aziere at jaziere@buelowvetter.com or 262-364-0250, or your regular Buelow Vetter attorney.