Wagner Logo

Follow us on Twitter View our profile on LinkedIn Like us on Facebook 

 

 

 

The Wagner Law Group

The Wagner Law Group is a nationally recognized practice in the areas of ERISA and employee benefits, estate planning, employment, labor and human resources and investment management.

 

Established in 1996, The Wagner Law Group is dedicated to the highest standards of integrity, excellence and thought leadership and is considered to be amongst the nation's premier ERISA and employee benefits law firms. The firm has seven offices across the country, providing unparalleled legal advice to its clients, including large, small and nonprofit corporations as well as individuals and government entities worldwide. The Wagner Law Group's 32 attorneys, senior benefits consultant and five paralegals combine many years of experience in their fields of practice with a variety of backgrounds. Seven of the attorneys are AV-rated by Martindale-Hubbell and six are Fellows of the American College of Employee Benefits Counsel, an invitation-only organization of nationally recognized employee benefits lawyers.  Seven of the firm's attorneys have been named to the prestigious Super Lawyers list for 2017, which highlights outstanding lawyers based on a rigorous selection process.

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

 

Washington, D.C.

Tel: (202) 969-2800

 

Fax: (202) 969-2568

 800 Connecticut Avenue, N.W.

Suite 810

Washington, D.C. 20006

 

Chicago

Tel: (847) 990-9034

Fax: (847) 557-1312

190 South LaSalle Street

Suite 2100

Chicago, IL 60603

 

  

Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

  

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

  

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
25 W. Moody Avenue
St. Louis, MO  63119 

 

 

www.wagnerlawgroup.com

 

 

 

Supreme Court Says Retiree

Health Benefits Ended

When CBA Expired

  

March 14, 2018

 

 

 

The U.S. Supreme Court, in CNH Industries N.V. v. Reese, has ruled that certain retiree health benefits provided under a collective bargaining agreement ("CBA") terminated when the CBA expired. In particular, the Supreme Court held that a CBA is to be interpreted according to ordinary principles of contract law unless it is subject to more than one reasonable interpretation.

 

Background. In 1998, CNH agreed to a CBA that provided health care benefits under a group health plan to certain employees. Other benefits, such as life insurance, ceased when an employee retired. The CBA contained a provision saying it would expire in May 2004. When the CBA expired, several retirees and beneficiaries filed a lawsuit to request a declaratory judgment that their health care benefits had vested for life and to enjoin CHN from terminating the benefits.

 

While the retirees' lawsuit was pending, the Supreme Court decided M&G Polymers USA, LLC v. Tackett, holding that where a CBA defines rights to retiree health benefits, it must be interpreted according to ordinary contract law principles. In particular, the Supreme Court rejected the "Yard-Man" inference adopted by numerous courts, including the Sixth Circuit Court of Appeals, where the immediate case was pending.

 

NOTE: In International Union, United Auto., Aerospace & Agric. Implement Workers of America v. Yard-Man, the Sixth Circuit applied a retiree-friendly judicial inference that retiree health benefits are vested for life in the absence of specific language to the contrary in the plan document or CBA.

 

In the wake of Tackett, the district court, which had initially ruled in favor of CNH, surprisingly reversed course and ruled in favor of the retirees. In turn, CNH appealed to the Sixth Circuit.

 

Sixth Circuit. On appeal, the Sixth Circuit affirmed the district court's decision, finding that the CBA was silent concerning whether the retiree health benefits vested for life. Specifically, the Sixth Circuit found the CBA's general duration clause was inconclusive because it: (i) provided that coverage for certain benefits ended at different times; and, (ii) tied eligibility for retiree health benefits to pension plan eligibility. As a result, the Sixth Circuit concluded that the CBA was ambiguous as a matter of law and subject to interpretation based on extrinsic evidence that supported lifetime vesting of retiree health benefits. CNH appealed the decision to the Supreme Court.  

 

Supreme Court. In reviewing the matter, the Supreme Court reversed the Sixth Circuit, holding that a contract is not ambiguous unless it is subject to more than one reasonable interpretation. The Court observed that no other Court of Appeals would find ambiguity under the immediate circumstances, that the CBA was straightforward, and that the only reasonable interpretation of the 1998 CBA was that retiree health care benefits expired when the CBA expired in 2004. Accordingly, the Court reversed and remanded the matter for further proceedings consistent with its opinion.

 

 

 

 

 

 

 

 

 

This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.

 

This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.