Former Spirit AeroSystems employees have filed charges with the Equal Employment Opportunity Commission against the company, alleging they were terminated because they were older, had medical conditions or had family members with medical conditions that were costing Spirit money.
The former employees allege that Spirit illegally used their health information to target them in a layoff of 360 employees in July.
Three weeks before the cuts, Spirit changed its medical coverage for employees and families from an underwritten provider form of medical insurance to a self-funded insurance plan, according to the Society of Professional Engineering Employees in Aerospace, which represents engineers and technical and professional employees at Spirit.
As a result, employees who were laid off included those who have spouses on organ donor transplant lists or children with serious and rare medical conditions and those with cancer or other serious conditions, the SPEEA said.
The result was cost savings to the company, said the union, which held a news conference Wednesday to announce its charges. “Every dollar not paid out in medical claims is a dollar that remains in Spirit’s corporate bank account,” it said.
Spirit AeroSystems said in a statement that the allegations are “filled with distortions and misstatements. Personal health information is certainly not used to make layoff decisions.”
The SPEEA has demonstrated a habit of making baseless allegations and legal claims, Spirit said in its statement.
Last year, the SPEEA filed several charges with the National Labor Relations Board related to Spirit’s workforce reductions, one of which it later withdrew, and the board found the rest to have no merit, Spirit said.
On July 25, Spirit laid off 360 employees in Wichita, including 221 employees represented by the SPEEA.
The charges unveiled Wednesday were filed with the EEOC by 10 former employees. Other employees may also file charges, the union said.
The SPEEA spent the past eight months investigating Spirit’s actions, union officials said.
The employees are also filing complaints with the U.S. Office of Civil Rights.
Each agency will perform its own investigation.
Spirit said in its response that its termination decisions were based on job-related, nondiscriminatory criteria.
“While terminations are always difficult ... Spirit has made every effort to carry them out with respect for our employees,” Spirit spokesman Ken Evans said in a statement. “Last year, Spirit made workforce reductions in salaried and management populations. The vast majority of affected employees accepted the company’s severance package and had the opportunity for career transition services. These actions were required to balance the workforce, reduce overhead costs, and hire hourly workers for the factory. This was done to become more competitive in a cost-sensitive environment.”
The union alleges that Spirit senior executives, human resources leaders and attorneys held secret meetings in the fall of 2012, before the change to a self-funded insurance plan, to come up with the list of those to be terminated.
They then gave the names of those to be laid off, and their retention ratings, to managers.
Spirit rates employees on a scale from A to C based on employee performance, with A the highest rating. Employees with a C retention rating are at risk of being laid off if there are cutbacks, according to information in the complaint.
A complaint filed by Donetta Raymond, a 25-year employee at Spirit and Boeing before that, said she learned after the layoff that many of the laid-off workers were older than 40 and either had significant medical issues or a history of them or had family members covered by Spirit health insurance with significant medical issues.
Raymond has heart disease and thyroid disease and is considered disabled, she said. She also is associated with an individual with a disability.
“I ... believe that Spirit discriminated against me and others similarly situated based on our genetic information by assessing our medical information during the process of switching to self-funded insurance to identify the employees it wanted to target for termination,” Raymond alleges in her discrimination charge.
She further alleges that many of the employees had histories of excellent performance, so that “senior management needed the lower level managers to create documentation of alleged poor performance that would eventually be used to justify the terminations of the individuals on those lists.”
Her supervisor and other lower-level managers were directed to find reasons to dramatically downgrade the performance ratings of the targeted employees, she alleges in the complaint.
Spirit has been under pressure to cut costs after posting a string of forward losses totaling roughly $2 billion over the past several financial quarters, due to losses on unprofitable new programs. In 2013, it lost $621.4 million, compared to a $34.8 million profit in 2012.
The losses prompted Spirit to undertake a strategic review of its programs last year and put its Oklahoma facilities up for sale.