Abbott accused of misleading workers who joined Hospira

Abbott Laboratories was accused at the start of a federal trial of misleading former employees about their retirement benefits to induce them to join a spinoff business.

Myla Nauman, Jane Roller and Michael Loughery represent a class of more than 8,000 people who sued Abbott for allegedly interfering with the federally protected benefits when its executives persuaded them to join Hospira Inc., an intravenous drug company Abbott created in 2004, plaintiffs' counsel said.

"Abbott unilaterally and recklessly misled these employees," Michael Mulder, a lawyer for the former employees, said today in opening statement to U.S. District Judge Robert Gettleman, who is trying the case without a jury.

Abbott, based in North Chicago, created Hospira to sell injectable drugs, as well as pumps and bags for infusing them. Abbott made the move to increase its focus on high- technology medical devices and pharmaceuticals, Chairman Miles White said in August 2003.

The workers sued Abbott and Hospira in November 2004, claiming they were told benefit levels wouldn't change if they joined Hospira. The spinoff eliminated a retiree medical benefit program immediately and its pension plan as of Jan. 1, 2005, according to court papers.

No-Hire Agreements

Hospira is accused of collaborating with Abbott on reciprocal no-hire agreements under which it pledged not to employ workers who received retirement benefits from Abbott. Abbott agreed, for two years, not to rehire workers who went to Lake Forest-based Hospira, according to the complaint.

Lawyers for both companies told Gettleman today the decisions were made to promote employee stability and productivity and there was no intent to deceive workers.

"It literally had nothing to do with benefits," Abbott attorney James Hurst said.

Hospira Chairman and Chief Executive Officer Christopher Begley, a former Abbott vice president, is expected to testify tomorrow, plaintiffs' attorney Steven Sprenger said outside court.

Abbott fell $1.87, or 4.2 percent, to $42.50 in New York Stock Exchange composite trading. The company has lost 20 percent of its value this year. Hospira fell 2 cents to $31.81.

The case is Nauman v. Abbott Laboratories, 04cv7199, U.S. District Court, Northern District of Illinois (Chicago).