For Immediate Release – Friday, December 28, 2007:

Kansas City, Kansas – Ten retirees from North Carolina and Florida today filed a

national class action lawsuit against Embarq Corporation and Sprint Nextel Corporation and

related defendants. The suit charges that the companies have violated the federal retirement

benefits law, ERISA, by cutting off the right to medical insurance for retirees who are eligible

for Medicare and by reducing or eliminating life insurance coverage to some of the oldest

retirees.

The class action suit, which covers an estimated 13,000 retirees around the country,

alleges that on July 26, 2007, Embarq informed retirees that it was unilaterally terminating or

reducing longstanding company-paid medical, prescription drug, and life insurance benefits and

subsidies. On the same day, Embarq reported to shareholders that the cutbacks would save $ 20

million during the second half of 2007 and reduce its long term post-retirement benefit

obligations by $ 301 million. In their lawsuit, the retirees charge that this reduction in benefits is

unlawful under the federal Employee Retirement Income Security Act (ERISA), because it

violates the provisions of the benefit plans of Embarq and its predecessors. The retirees claim in

the alternative that Embarq and its predecessors broke federal law by systematically

misrepresenting that the benefits were secure and would last for the lifetimes of the retirees.

“We represent people who dedicated their lives to working for the phone company. They

retired based on company promises that they would have medical benefits and life insurance for

the rest of their lives. I told company executives it was wrong for them to take away these

benefits, but they would not listen,” said Willie Dorman, one of the ten original named plaintiffs

and a former division manager with Carolina Telephone and Telegraph Company, now an

Embarq subsidiary.

The lawsuit was filed in the United States District Court in Kansas City, Kansas, where

both Embarq and Sprint Nextel are headquartered. Embarq, created in May, 2006 as a spin-off

from Sprint Nextel, is now the fourth largest local exchange telephone carrier in the United

States, with more than $6 billion in annual revenues. In recent years, Sprint Nextel has been hit

with other charges that it violated federal law protecting older workers. It recently paid more

than $60 million to settle class action lawsuits filed by older workers who claimed they were

targeted for layoffs because of their age.

Today’s suit alleges that the telephone companies attracted and retained dedicated

employees by offering programs of retirement benefits, including medical and life insurance

benefits. The plaintiffs contend that Embarq, Sprint Nextel, and their predecessors induced

employees to take early retirement with the promise that their medical and life insurance benefits

would be secure for the rest of their lives. The members of the class seek a court order restoring

their lost benefits and monetary relief to pay the retirees for the losses they have suffered.

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