The Sixth Circuit on Friday overturned an Ohio federal judge's decision that Honeywell International Inc. owed its retirees lifetime health care benefits, saying Honeywell only needed to provide the benefits until the collective bargaining agreement expired.
In making its decision, the appellate court used Sixth Circuit precedent and two Supreme Court holdings to “distill a clear rule” — that CBAs’ general durational clauses apply to health care benefits unless the CBA contains “clear, affirmative language indicating the contrary.”
In other words, because the CBA between Honeywell and its workers indicated the agreement was only in effect until May 22, 2014, retirees only had a right to health care benefits until May 22, 2014, even though they were under the impression they would receive the benefits for life — though the CBA did not promise this, the Sixth Circuit said.
An Ohio federal judge had ruled that because other portions of the CBA strongly implied retirees had a right to lifetime health care benefits, the retired workers had proved by a preponderance of the evidence that Honeywell agreed to grant them lifetime benefits.
The Sixth Circuit disagreed, saying that because the CBA never promised lifetime benefits, workers shouldn’t get lifetime benefits and reminding workers that the CBA stopped applying four years ago.
“The district court held that the CBAs were ambiguous and relied on extrinsic evidence for its conclusion that the parties intended retiree health care benefits to vest for life,” the Sixth Circuit said. “Because we hold that the CBAs are unambiguous, we reverse the district court’s judgment.”
K. Winn Allen, a partner at Kirkland & Ellis LLP who represented Honeywell, said the legal team was “pleased with the court’s decision, which correctly interpreted the contracts at issue and continued to clarify the law in the Sixth Circuit regarding the interpretation of collective bargaining agreements.”
Honeywell spokeswoman Victoria Streitfeld said the company was “gratified the court agreed with our position.”
The retirees hit Honeywell with their putative class action after the company sent them a letter saying it was cutting off their benefits as of Dec. 31, 2016. The onetime employees had worked at Honeywell’s plant in Greenville, Ohio, which was operational from 1960 until Honeywell sold it in 2011.
Counsel for the retirees did not respond to a request for comment on Friday.
The retirees are represented by John G. Adam and Stuart M. Israel of Legghio & Israel PC and William Wertheimer of the Law Office of William Wertheimer.
Honeywell International Inc. is represented by K. Winn Allen, Craig S. Primis and Matthew P. Downer of Kirkland & Ellis LLP.
The case is Barbara Fletcher et al. v. Honeywell International Inc., case number 17-3277, in the U.S. Court of Appeals for the Sixth Circuit.
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