The Steamfitters Local 449 Pension Plan filed the suit on July 22 in the Southern District of New York, seeking unspecified damages.

The lawsuit names Eaton Corp and Alexander Cutler, Eaton’s former chairman and ceo as well as Richard Fearon, its vice chairman and chief financial officer. The union claimed they violated US securities law by making “false and misleading statements” about the company’s ability to carry out a tax-free spin-off of its vehicle business after its merger with Dublin-based Cooper Industries.

Before and after the deal, Mr Cutler reassured analysts that the inversion wouldn’t affect Eaton’s ability to spin off its vehicle business, but later admitted the deal imposed a five-year restriction on tax-free spin-offs.

That effectively prevented the sale of Eaton’s vehicle business until at least late 2017, it claimed.