(CN) - When United Parcel Service more than tripled the monthly health care contributions for retirees of a local union, it should have raised contributions for all retirees of the international union, the 7th Circuit ruled.
Retired UPS workers who belong to the International Brotherhood of Teamsters Local 705 filed a class action against UPS after their monthly health care contributions shot up last year from $50 a month to more than $150 a month.
The union's collective bargaining agreement stated that retired workers would share equally in the cost if the average annual cost per participant exceeded $6,250. The agreement also stated that additional contributions "would not be implemented until after the expiration of the current collective bargaining agreement."
Local 705 retirees argued that if UPS was going to raise their contributions, it had to raise contributions for other retirees of the international union. They also claimed that their "current" five-year collective bargaining agreement became effective in 2008, barring UPS from collecting additional contributions until 2013.
The Chicago-based appeals court upheld the district court's decision, which agreed with the retirees' first argument, but not the second.
UPS violated the local collective bargaining agreement by not raising contributions for all retirees, the 7th Circuit ruled, but the retirees were not entitled to an order barring additional contributions through 2013.
"Local 705 retirees have a right to rely on the language, which unambiguously states that UPS must, if it collects additional contributions, collect them from al [union] retirees," Judge Terence Evans wrote.
But the judge added that UPS wasn't wrong to interpret the term "current" as referring only to its 2002 collective bargaining agreement and not the 2008 agreement, as the retirees had argued.
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