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Ex-Spirit Aero staff claim their high health costs led to layoffs

NEW YORK, March 26 (Reuters) - Former employees of Spirit Aerosystems Holdings Inc, a major supplier to plane makers Boeing and Airbus, filed charges with federal agencies on Wednesday alleging that Spirit illegally used health care information to target those who were costing the company most for layoffs.

Ten former employees claim they were selected when the company cut 360 positions last summer because they or covered family members had costly disabilities or medical conditions.

Spirit's health care administrators shared information with high-level managers "so that Spirit - in its role as employer - could identify the employees associated with the most expensive medical claims and target them for termination," according to one of the charges filed on Wednesday and reviewed by Reuters.

The charges, filed with the federal Equal Employment Opportunity Commission and the Office of Civil Rights, request class status and also allege age discrimination, disability discrimination and violations of privacy rights, said Diane King, a lawyer with King and Greisen, a Denver law firm that assisted the employees.

Ken Evans, a spokesman for Spirit, said the allegations "are filled with distortions and misstatements. Personal health information is certainly not used to make layoff decisions."

All of the charges relate to the July 2013 layoffs, when Spirit cut the positions at its facilities in Wichita, Kansas, including 221 members of the Society of Professional Engineering Employees in Aerospace (SPEEA), a Seattle-based union that also represents workers at Boeing.

Evans said SPEEA had made unfounded allegations before, including several charges filed with the National Labor Relations Board last year related to the job cuts that were either withdrawn or dismissed by the board.

"While terminations are always difficult, all such decisions are based on job-related, non-discriminatory criteria, and Spirit has made every effort to carry them out with respect for our employees," Evans said in a statement.

The job cuts were necessary in a competitive, cost-sensitive industry, Evans said, and Spirit provided the laid-off employees with severance and help finding new jobs.

PRESSURE TO CUT COSTS

King said circumstantial evidence supports the employees belief that top Spirit managers misused individual employees' health care information, but she declined to provide details.

She did not immediately provide any statistical analysis showing that a higher proportion of those with expensive medical costs were among those laid off.

Spirit has been under pressure to cut costs and since 2012 has set aside more than $2.2 billion in provisions for future losses on unprofitable contracts.

The company was formed in 2005 when Boeing Co spun off some of its facilities. It makes parts for all major Boeing jets, including about 40 fuselages a month for Boeing's top-selling 737 jetliner.

Spirit also makes parts for Airbus, Bombardier Inc , Gulfstream, a unit of General Dynamics Corp and Mitsubishi Aircraft Corp, owned by Mitsubishi Heavy Industries and Toyota Motor Corp.

The losses at Spirit prompted it to undertake a strategic review last year and consider sale of facilities in Oklahoma.

If the employee charges are substantiated, penalties could include back pay, out-of-pocket health care costs, job reinstatement or forward pay through retirement in lieu of employment, plus attorneys fees, according to lawyers with knowledge of these kinds of claims.

The case raises questions about possible misuse of health information gathered by companies through self insurance or wellness programs.

In interviews, two former Spirit employees said they were singled out by upper management and that their own supervisors didn't know their performance ratings were being cut until just before it happened.

"They tried to make it look like it was performance issues," said Debra, 54, a former quality analyst, whose husband is in need of two organ transplants.

She and other employees and family members who spoke with Reuters declined to have their full names used out of concern for the privacy of their medical and employment information.

She said she received a "B" retention rating on Spirit's A-C rating scale during a previous review. On July 1, her rating was lowered to a "C," and she was told she was not eligible for recall rights if she was laid off. Her direct supervisor wanted to give her an "A," she said.

On July 25, she and the other employees were let go.

Scott, 51, a planner, said his rating also was downgraded to C from B at the same time and he was also laid off. He said his daughter requires expensive medical treatment for two conditions.

(Reporting by Alwyn Scott; Editing by Martin Howell)