New United Motors & Manufacturing, Inc. (NUMMI), California’s last auto plant, has agreed to contribute to a $6 million settlement fund as part of a class settlement resolving complaints that the company violated federal law when it denied severance benefits to employees on medical leave, the U.S. Equal Employment Opportunity Commission (EEOC) announced today. 

With the historic closure of California’s last auto plant, the EEOC received charges from multiple employees laid off in April 2010, alleging that workers on medical leave were denied severance benefits and transitional services that other employees received.  When the Fremont facility closed, employees received a severance package based on whether they worked during the last six months of NUMMI’s operation as well as their years of service.  Workers informed the EEOC that they were physically capable of returning to work during the severance period but were denied reinstatement.  As a result, most disabled workers were ineligible for the portion of severance pay that factored in their years of service.  Many of the affected workers had worked for NUMMI for 25 to 30 years, and suffered losses of up to $38,000 each.

The Americans With Disabilities Act (ADA) protects individuals with disabilities from employment discrimination.  In June 2010, the EEOC’s Oakland Local Office issued ‘right to sue’ letters to several NUMMI workers, while retaining the right to continue its investigation led by Senior Investigator Margarita Hossaini-zadeh.  

While the EEOC charges were pending, a group of former employees filed a federal lawsuit (Cookson et al v. NUMMI, C10-02931 CRB (N.D. Cal.) on July 14, 2010.  They were represented by private attorneys and two advocacy groups, the Impact Fund and The Legal Aid Society – Employment Law Center.

Prior to the EEOC’s filing its own lawsuit, the EEOC, NUMMI and the workers all agreed to resolve the matter.  The conciliation agreement between EEOC and NUMMI, attached to the settlement agreement for the private lawsuit, was submitted to Judge Charles Breyer today for preliminary approval. 

NUMMI employees who meet the following criteria may be eligible to participate in a claims process over the coming months:

• disabled under state and federal laws
• on leave from work due to their own disability at any time between October 1, 2009 and April 1, 2010, and
• denied all or any part of the NUMMI severance pay.