Union Fights for Retiree Benefits in Sixth Circuit

CINCINNATI (CN) – The United Auto Workers argued Wednesday before the Sixth Circuit for the implementation of minimum health care premium payments by Honeywell International to a group of over 4,700 retirees who claim they were promised lifetime benefits.

The Potter Stewart U.S. Courthouse in Cincinnati, home of the Sixth Circuit Court of Appeals. (Carol M. Highsmith/Library of Congress)

The UAW, which also represents aerospace workers, claims employees of the technology and manufacturing company who retired before May 1, 2016, are eligible for “safety net” minimum payments in perpetuity, even after the expiration of the parties’ collective bargaining agreement.

But the 2018 Sixth Circuit ruling in Fletcher v. Honeywell came down on the side of the employer, and held that retirees are not eligible for lifetime benefits.

Chief U.S. District Judge Denise Hood in Detroit cited the Fletcher case in her July 2018 opinion dismissing the union’s lawsuit against Honeywell, and found the company was only responsible for retiree health care benefits until Aug. 1, 2018.

“There is no indication, express or implied, that retirees were entitled to lifetime healthcare benefits,” the judge wrote.

Hood agreed with Honeywell that the lack of any “vesting language” in the CBA regarding health care benefits is fatal to the union’s claims, particularly when other benefits, like pensions, contain such language.

Attorney Winn Allen of the D.C. firm Kirkland and Ellis argued Wednesday on behalf of Honeywell, and urged the Sixth Circuit panel to affirm the lower court’s decision.

Allen told the panel the “floor-level” premium payment was intended for use with a very specific Blue Cross Blue Shield health insurance plan, and when that plan was not renewed during collective bargaining negotiations in 2017, the payment ceased to exist.

U.S. Circuit Judge Jane Stranch, an appointee of Barack Obama, told Allen the language for the minimum payment sounded like “an illusory promise,” given that Honeywell could eliminate the only plan for which the contribution could be used.

Allen told the judges that while parties involved in labor negotiations can anticipate providing health care benefits in the future, language in the CBA doesn’t guarantee the payments in perpetuity.

Attorney John Adam of the Michigan firm Legghio & Israel argued on behalf of the union and its retired members, and called the language in the parties’ CBA “unique.”

Adam told the panel his clients’ case is distinct from Fletcher because while the minimum premium payment was negotiated in 2003, it did not take effect until 2008, after the 2003 CBA had expired.

The attorney picked up on Judge Stranch’s line of thought and told the panel that if the UAW and Honeywell couldn’t negotiate an extension to the Blue Cross Blue Shield plan, the employer could not simply eliminate the plan to avoid making contributions.

Senior U.S. Circuit Judge Ronald Gilman, an appointee of Bill Clinton, asked Adam what language in the CBA requires the minimum payment to be vested for life.

“There is no ‘magic words’ doctrine,” the attorney responded, adding that, “You have to read the promise as a whole.”

U.S. Circuit Judge John Nalbandian, an appointee of President Donald Trump, also sat on the panel. No timetable has been set for the court’s decision.

%d bloggers like this: