On remand from the Supreme Court, the Sixth Circuit sent the parties in Tackett v. M&G Polymers USA, LLC back to the district court for additional factual determinations on whether the retirees who commenced the lawsuit had vested in their health benefits.
Nearly a decade ago, a class of retirees sued their former employer’s successor, M&G Polymers, after it announced that it would begin requiring the retirees to contribute toward their health benefits. The district court granted M&G Polymer’s motion to dismiss and held that the CBA clearly did not give the retirees a vested right to health benefits. On appeal, the Sixth Circuit reversed; applying the principles it established more than three decades earlier in UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), it held that the retirees had stated a plausible claim. The district court subsequently ruled in favor of the retirees on remand, and the Sixth Circuit affirmed.
The U.S. Supreme Court granted M&G Polymer’s petition for certiorari and concluded that the Sixth Circuit’s Yard-Man inference violated ordinary contract principles “by placing a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements.” The Court noted that contractual obligations normally cease when the CBA terminates and that ambiguous writings should not be construed to create lifetime benefits. Although the majority opinion did not state that “clear and express” language is required to demonstrate an intent to vest retiree health benefits, it quoted Sprague v. Gen. Motors Corp., 133 F.3d 388, 400 (6th Cir. 1998) for the proposition that “the intent to vest must be found in the plan documents and must be stated in clear and express language.” The Court further explained that the decision did not preclude a finding that parties intended to vest retiree health benefits, but when a CBA is silent, a court may not infer that the parties intended lifetime health benefits. The Supreme Court thus abrogated the reasoning in Yard-Man and vacated and remanded the case to the Sixth Circuit. Justice Ginsburg, writing a concurring opinion, agreed that courts must apply ordinary contract principles, and noted that “clear and express” language is not required to show that parties intended healthcare benefits to vest and that both explicit and implied terms of an agreement can evidence such intent.
On remand, the Sixth Circuit purported to rely on both the Supreme Court’s majority and concurring opinions. The Sixth Circuit observed that while the Supreme Court’s decision “prevents [it] from presuming that absent specific durational language referring to retiree benefits themselves, a general durational clause says nothing about the vesting of retiree benefits, it also cannot presume that the absence of such specific language, by itself, evidences an intent not to vest benefits or that a general durational clause says everything about the intent to vest.” Rather than decide whether “clear and express” language is needed to establish an intent to vest under ordinary principles of contract law, the Sixth Circuit remanded to the district court to make factual determinations as to the parties’ agreement outside the “shadow” of the Yard-Man decision. The decision is Tackett v. M&G Polymers USA, LLC, No. 12-cv-3329, 2016 WL 240414 (6th Cir. Jan. 21, 2016).