[firm] blog logo

U.S. Supreme Court Rules Lifetime Retiree Health Benefits Cannot be Inferred from CBA

In the case of CNH Industrial N.V. v. Reese, an employer and certain retirees disputed whether an expired collective bargaining agreement (?Ç£CBA?Ç¥) covering union employees created a vested right to lifetime retiree health benefits. The retirees had successfully argued at the U.S. Court of Appeals for the Sixth Circuit that the duration of their retiree health benefits was ambiguous because the CBA was silent on that issue, which enabled the Sixth Circuit to consider other extrinsic evidence to support its finding that retiree health benefits were vested for life. The Supreme Court, however, disagreed, reasoning that (i) silence alone regarding the duration of retiree health benefits did not make the CBA ambiguous in that regard and (ii) ambiguity required the terms of the CBA to reasonably support an interpretation that retiree health benefits were intended to be vested for life before any extrinsic evidence could be applied. Consequently, the Supreme… Continue Reading

U.S. Supreme Court Sets Standard for Vesting of Retiree Health Benefits

Resolving a more than 30-year split among the circuit courts, a unanimous Supreme Court rejected the U.S. Sixth Circuit Court of Appeals?ÇÖ ?Ç£Yard-Man standard?Ç¥ governing claims for retiree medical benefits arising from a collective bargaining agreement (?Ç£CBA?Ç¥) under which retiree medical benefits are presumed to be vested. In Tackett, the Supreme Court ruled there is no inference that parties to a CBA intend to vest retirees with lifetime medical coverage in the absence of an express contractual provision or other evidence to the contrary, and thus ordinary contact principles should govern interpretation of a CBA. Applying ordinary contract principles, the Supreme Court held that retiree medical benefits established by a CBA with a fixed duration are only guaranteed for the duration of the CBA, absent express language in the CBA or health plan stating otherwise. M&G Polymers USA, LLC v. Tackett, 574 U.S. ____ (2015). A copy of the opinion… Continue Reading

October 2021
S M T W T F S
 12
3456789
10111213141516
17181920212223
24252627282930
31  

Archives