(Bloomberg) — Lockheed Martin Corp., builder of the Orion spacecraft that may one day take people to Mars, and its workers and retirees agreed to delay a trial over pensions by a day to see if the dispute can be settled out of court.
A U.S. judge granted the delay “so that the parties can determine whether the case can be resolved short of a full trial,” Jennifer Allen, a spokeswoman for Bethesda, Maryland- based Lockheed, said today in an e-mail.
Lockheed is fighting claims that its mismanagement of retirement benefit plans left workers with worse returns on company stock than investors who bought it on the open market. The workers accused the aerospace and defense contractor’s in-house investment manager of charging them excessive fees and under-delivering on performance.
About 120,000 employees and retirees participate in Lockheed’s retirement plans, which manage $26 billion of assets, said Jerome Schlichter, a lawyer for the workers. The company calls the plans “among the nation’s largest and most complex.”
The plan participants are seeking more than $1.3 billion in damages, according U.S. District Judge Michael Reagan, who is hearing the case without a jury. Reagan delayed the start of the trial in federal court in East St. Louis, Illinois, until tomorrow. He said he wouldn’t consider any settlement proposals once the first witness is called.
“The parties have battled over virtually everything,” the judge said in a two-page order dated Dec. 14. Citing his own obligation to ensure any resolution is fair to the suing workers and free from collusion, he said: “If a proposed settlement occurs, the court will consider it only in light of all the evidence presented.”
Reagan said the case, filed in 2006, is the oldest on his docket. Schlichter, who has brought several similar cases including one to be reviewed by the U.S. Supreme Court, today declined to say whether settlement talks are under way.
“We remain firmly committed to the position that Lockheed committed serious breaches of its duties to its employees,” costing them “substantial” retirement assets, Schlichter said today in a phone interview. “We plan to start the trial tomorrow.”
His St. Louis-based law firm, Schlichter Bogard & Denton LLP, has waged similar battles with mixed success against Swiss generator-maker ABB Ltd., power-generating company Exelon Corp. and Caterpillar Inc., the Peoria, Illinois-based maker of earth- moving equipment.
Schlichter initially won an award of more than $35 million against ABB’s U.S.-based unit and Fidelity Management Trust Co. Last month, the U.S. Supreme Court declined to reinstate $21.8 million that was cut from that on an appeal.