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Court of Appeals upholds dismissal of benefits lawsuit

May 7, 2012
By Deb Gau , Marshall Independent

MARSHALL - The Minnesota Court of Appeals has upheld the dismissal of a lawsuit brought against Lyon County in 2009 by a group of county employees.

A published appeals court opinion, filed Monday by Judge James Harten, said the Lyon County District Court was not wrong to dismiss claims that changing a health insurance benefit for retired county employees violated the Minnesota Constitution, and that the original benefit should be enforced.

The lawsuit was brought against the county by more than 30 employees, including several elected officials, after the Lyon County Board passed a resolution to reduce the health insurance benefits paid to retired county employees. The benefit, created in 1985, paid retired employees a percentage of dental and health insurance premiums for each year of the employee's service.

The lawsuit was dismissed by District Court Judge Jeffrey Flynn in 2011.

On Monday, Harten filed an opinion upholding the district court ruling. It was not reasonable for county employees to rely on retirement benefits which could be changed or eliminated, the opinion said. In 1991, the employee policy manual was updated to state that the county board had the right to change the policies, after notifying and getting feedback from employees. In 1995, a disclaimer saying the employee policy manual was not an employment contract was added to the manual.

The appeals court opinion said it was also not reasonable for employees to rely on verbal promises that contradicted the policy manual.

The opinion also upheld the district court's ruling that the county did not violate the state constitution in changing the health insurance benefit. An employee's right to benefits after retirement is not vested until he or she retires, the opinion said.

None of the employees appealing the lawsuit were retired when the health insurance benefit was changed in 2009, the opinion said.



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