Compaq and Employee Benefit Plans
Compaq's termination of disabled employees and slashing these employee's financial and health care security


"Dear Disabled Employee"

"Dear Disabled Employee" II


The "transition obligation"

Plan Details

The Disclaimer


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The following background information relates to those Digital Employees disabled prior to 1992. The author is aware that others are affected but only has hard documentation explicitly concerning this population. The author will gladly add information relating to others if it can be substantiated.

Digital Equipment Corporation ("Digital") promoted and published an extensive benefit package to ensure the financial security of employees should they become disabled. This included income protection via 3rd party insurers and a substantial package provided directly by Digital.

Employees were supplied with extensive benefit manuals and made decisions that their entire future might depend upon based upon the written information provided them. Until acquisition by Compaq in 1998, Digital fully enforced and honored these written benefit plans.

This is not to imply that Digital never changed benefits as written in the LTD Plan. On a number of occasions Digital made changes for various reasons. They changed health insurance carriers, they took advantage of changes in Medicare law and were forced to make some changes due to changes in tax law. However, the author is not aware of any instance where Digital failed to comply with the expressed intent of the benefit plans. To the author's knowledge, Digital made adjustments such that there was a zero net effect on the employee.

In September 1998, Compaq notified Digital's employee population on Long Term Disability (LTD) that it would no longer maintain the benefits that Digital had supplied in writing.

No explanations or reasons were supplied and the notifications were far from complete as to the extent of the benefit reductions. As of this writing, the author is not aware that Compaq has ever supplied these employees with a comprehensive description of their new, reduced, benefits.

The "transition obligation"

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