Court Moves Forward Retirees’ Case for Lifetime Benefits

U.S. District Judge Gregory L. Frost of the U.S. District Court for the Southern District of Ohio noted that the 6^th U.S. Circuit Court of Appeals had found that language in collective bargaining agreements suggesting that the parties intended the employer to cover the full cost of health-care benefits for those employees meeting the age and term-of-service requirements and tying eligibility for health-care benefits to pension benefits indicated that the parties intended the health care benefits to vest upon retirement. Frost said he recognized that there are no facts presented on remand that would defeat the 6^th Circuit’s conclusions.  

On the issue of what exactly vested, the district court pointed out that for years there were side agreements intended to impose a cap on employer contributions toward health care benefits. However, Frost said the ambiguous nature of the documents and “abundant questions of intent” lead by necessity to the consideration of extrinsic evidence. “On one side, Defendants argue that an unbroken chain of cap letters informs CBA agreements resulting in at most lifetime health care benefits that are contingent on satisfaction of a cost-sharing arrangement. On the other side, Plaintiffs present compelling evidence for after-the-fact company scrambling to find a way to impose application of cap letters as an unethical cost-savings measure that defies agreements the caps would now puncture,” Frost wrote.   

Retirees, their spouses, and surviving spouses or other dependents of individuals who worked for M&G Polymers assert that although they have a right to lifetime retiree health care benefits, the company is requiring them to pay for those benefits in violation of various collective bargaining agreement provisions. They allege that on or about January 1, 2007, M&G acted contrary to the CBA by unilaterally modifying the health care benefits by shifting a large part of the health care costs onto the class members.   

The district court had previously granted defendants motion to dismiss the complaint, but on appeal, the 6^th Circuit reversed and remanded.