Ten former telephone company employees have filed a class action lawsuit against landline company Embarq Corp. and its former wireless parent, Sprint Nextel Corp., over Embarq's decision to reduce or withdraw some retiree benefits. The federal lawsuit, filed in Kansas City, claims Embarq violated federal law protecting retirement benefits and seeks to have those benefits restored.
The class action was filed on behalf of almost 13,000 former Embarq and Sprint workers. The class includes all those who retired from local telephone companies that were subsidiaries of then-Sprint Corp. Sprint spun off its local division to Embarq in 2006 following its acquisition of Nextel Communications Inc.
Embarq also capped life insurance benefits through company-sponsored plans for qualified retirees to $10,000, effective Jan. 1, 2008 and eliminated life insurance coverage for retirees receiving benefits through a subsidiary company plan, effective Sept. 1, 2008. The suit claims the company violated the Employee Retirement Income Security Act, or ERISA, by unlawfully revoking the long-standing benefit plan.