$6M Settlement Reached in New United Motors Manufacturing Employment Class Action Lawsuit

San Francisco, CA: A $6 million settlement was reached in California labor law class action lawsuit alleging discrimination and unfair dismissal. Brought by former employees of Freemont-based New United Motors Manufacturing, Inc. (NUMMI), California' last auto plant, the lawsuit, alleged that employees who were on disability at the time of the plant closure, were denied the severance benefits.

Specifically, the lawsuit alleged that employees who were on disability in the period between October and the plant' closure on April 1st did not receive benefits and services offered to employees who were not on disability during that same period. Those benefits and services included a severance package including a base payout with an additional retention bonus determined by years worked at the plant. The plant employees working between October 1st and April 1st were also offered transitional services, including access to a one-stop center, career and educational fairs, and skills assessments.

The plaintiffs also claimed that they, being on leave due to their disabilities and/or NUMMI' refusal to accommodate their disabilities, were unjustly denied the bonus enhancement and transitional services. Further, the workers alleged in their complaint to the Equal Employment Opportunity Commission (EEOC) that they were physically capable of returning to work during the severance period, but were denied reinstatement. The EEOC issued "right to sue" letters to several NUMMI workers, while retaining the right to continue its investigation.

While the EEOC charges were pending, a group of former employees filed a federal lawsuit in the United States District Court for the Northern District of California. The plaintiffs filed claims for declaratory and injunctive relief, as well as damages for violations of the Americans with Disabilities Act, The Fair Employment and Housing act, the Unfair Business Practices Act, and California' Public Policies.

The plaintiffs sought reformation of the severance agreement, restitution, lost compensation and other employment benefits and compensatory and punitive damages, and reasonable attorneys' fees and costs for the defendants' violations of their rights. Defendants named in the suit included New United Motors Manufacturing, Toyota Motor Corporation and Toyota Motor Sales. A class certification was later granted. Prior to the EEOC' filing its own lawsuit, the matter was resolved via settlement for $6 million. As a part of the settlement, NUMMI entered into a conciliation agreement with the EEOC.

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Published on Sep-3-13