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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

Sixth Circuit Rules Retiree Medical Benefits Were Vested for Employees and Spouses

In a recent opinion, the U.S. Court of Appeals for the Sixth Circuit held that a company violated the terms of two collective bargaining agreements in denying retirees and their spouses lifetime vested healthcare coverage following retirement.?á These union employees retired under 1994 and 1997 collective bargaining agreements and the company provided healthcare insurance for the retirees and their spouses after retirement.?á In mid-2006, the company communicated to the employees that it was instituting a new healthcare plan under which the company contributions to premiums would be reduced and the retirees subsequently filed suit.?á The district court issued a split decision that ruled in favor of the plaintiffs with respect to the retiree coverage, but in favor of the defendants with respect to the spousal coverage.?á The Court of Appeals reversed the district court?ÇÖs decision and ruled in favor of the plaintiffs with respect to both the retiree and spousal… Continue Reading

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