AT&T may be unlawfully reducing Bell South employees ERISA benefits.

Investigation and pending class action ERISA lawsuit against AT&T on behalf of current and former employees of BellSouth, which was recently acquired by AT&T.

Bell South offered to its retirees what Bellsouth called a "Telephone Concession", in which BellSouth promised to provide to retirees who live outside the BellSouth Service Area ("Out of Area Telephone Concession") certain cash payments and those payments constitutes a defined benefit pension plan under the federal law which protects employee benefits.

This class action lawsuit seeks a determination that the Out-of-Service Area Telephone Concession must comply with ERISA and most importantly protect the benefits promised to any included employees and retirees. In other words that neither AT&T nor BellSouth (now a part of AT&T) can reduce or eliminate those benefits.

This class action lawsuit is brought on behalf of the following persons:

(1) Retirees of a BellSouth Company as of December 29, 2006 who received Telephone Concession and lived outside the BellSouth Service Area and lived outside the AT&T Service Area on or after December 29, 2006; or

(2) Current of former employees of a BellSouth Participating Company with more than five years of service with a BellSouth Participating Company as of December 29, 2006 who were eligible or who may become eligible to receive Telephone Concession after they retire while they reside outside the BellSouth Service Area and outside the AT&T Service Area; or

(3) Current spouses of any person in Group 1 or Group 2.

Prior to the merger with AT&T, BellSouth stated that it intended to continue Telephone Concession. As a result of the Merger, then Chairman & CEO Ed Whitacre explained, "AT&T, BellSouth and Cingular are now one company" and, as a result, all decisions regarding BellSouth benefits will be made by AT&T. While the terms of the Merger prevent AT&T from making any modifications which reduce benefits until after December 31, 2007, as alleged in the Complaint, Plaintiffs have obtained information suggesting that AT&T is in the process of planning to implement modifications to the BellSouth Telephone Concession which will be effected in 2008 (after which no such restriction will apply). Based on AT&T's prior actions in reducing and eliminating the cash reimbursements of the Out-of-Service Area Telephone Concession for SBC retirees, the class action complaint alleges that this expected modification will similarly reduce and/or eliminate the Bellsouth Telephone Concession cash payments to Out-of-Service Area retirees.

The class action lawsuit seeks a determination that the BellSouth Telephone Concession provided to Out-of-Service Area retirees is a pension plan under ERISA. If successful on establishing this contention, it is expected that such a determination will prevent AT&T from reducing or eliminating the Telephone Concession provided to retirees while they live outside the Service Area of Bellsouth and AT&T.