Ending a painful chapter for hundreds of disabled workers at the defunct NUMMI auto factory in Fremont, automobile executives have agreed to a $6 million settlement to help the employees, federal officials said Thursday.
An estimated 500 disabled workers claimed that Toyota and New United Motor Manufacturing Inc. discriminated against them by giving them much smaller severance packages than the companies offered nearly all the other employees at the auto factory.
"A lot of families lost a lot when NUMMI shut down," said June Andrade, a Mountain House resident who worked on the passenger vehicle assembly line for more than nine years before being injured on the job. "They lost their jobs, they lost their homes, they lost their cars."
The U.S. Equal Employment Opportunity Commission alleged that NUMMI violated federal law when it denied severance benefits to employees on medical leave. In the settlement disclosed Thursday, NUMMI agreed to contribute $6 million to a fund to pay the disabled employees.
"My reaction to being turned down by NUMMI was disbelief," Andrade said. "Like a number of employees, I gave blood and sweat to the company. I was loyal to NUMMI. But they weren't loyal to me. They closed the doors on us."
About 4,700 workers lost their jobs when NUMMI shut its doors in April 2010. NUMMI, a joint venture of General Motors and Toyota Motor, lasted a quarter century before a series of setbacks triggered the factory's shutdown.
"This settlement will help workers transition to new employment," said Tony Lawson, an attorney who represented several NUMMI employees in legal proceedings against NUMMI and Toyota. "There were a significant number of disabled workers who were not given the severance packages."
In 2010, ahead of the shutdown, NUMMI and Toyota offered bonuses to employees who were at work during the factory's final six months. The size of the bonus varied depending on their total years of service at the factory, which began operations in 1985.
Before NUMMI's closure, Toyota provided about $280 million to fund transition support for NUMMI's salaried and hourly team members, said Javier Moreno, a Toyota spokesman.
"Toyota's intention, from the beginning, was to mitigate the effects of NUMMI's closure on the plant's employees," Moreno said. "While we do not believe Toyota is liable in respect to this lawsuit, we are pleased that all parties have reached a conclusion in this litigation."
The highest bonus package that Toyota offered to employees totaled about $69,000. The average package was $54,000. The minimum bonus, primarily to cover health benefits, was $21,000.
Anyone who didn't work during that time -- even if they were injured and unable to work -- was offered the minimum. That left disabled workers caught in the middle.
"The workers who came into our office were devastated by the loss of severance benefits despite decades of loyal service," said Kristine Jensen, director of the Equal Employment Opportunity Commission's office in Oakland.
The timing was particularly difficult, coming during the recession.
"It was an extra blow on top of being forced back into a tough job market with their specialized skills as autoworkers and their disabilities," Jensen said.
The EEOC estimated that the settlement could apply to 300 to 500 employees. Lawson thought it could apply to 500 to 800 employees.
That would put hypothetical payments in a range of $7,500 to $20,000 per worker. The precise amount will vary depending on two major factors: years of service at the factory and how many employees come forward to seek a settlement.
Plus, seven employees, including Andrade, who were part of a separate federal lawsuit against Toyota and NUMMI, will receive an additional $10,000 each.
"It was very heartbreaking that these employees were in this dilemma," said William Tamayo, a regional attorney with the EEOC. "Fortunately, NUMMI came to the table and worked out a settlement."