1 NOT RECOMMENDED FOR FULL-TEXT PUBLICATION File No: 14a0171n.06

No. 12-1824

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW); JAMES WARD; MARSHALL HUNT; AND RICHARD GARDEN, Plaintiffs-Appellees,

v. KELSEY-HAYES COMPANY; TRW AUTOMOTIVE HOLDINGS CORPORATION; AND NORTHROP GRUMMAN SYSTEMS CORPORATION, Defendants-Appellants, TRW, INC., aka TRW AUTOMOTIVE,

Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

OPINION

Before: ROGERS, GRIFFIN a nd DONALD, Circuit Judges.2 BERNICE BOUIE DONALD, Circuit Judge. The Kelsey-Hayes Company (“KelseyHayes” or “the Company”) 1 appeals an order of the district court partially de nying its motion to compel arbitration. For the reasons below, we AFFIRM the decision of the district court.

I. In 1998, Kelsey-Hayes entered into a co llective bargaining agreement (“CBA”) [hereinafter, the “1998 CBA”] w ith the International Union, Un ited Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW” or “the Un ion”), which represented the employees of its Detroit manufacturing pl ant. The 1998 CBA provided comprehensive healthcare coverage to its retirees and their surviving spouses; it also specified that any healthcare-related disputes would be exempt fr om otherwise applicable provisions requiring disputes to be resolv ed through arbitration. ( See 1998 CBA, art. XIV, art. V § 4, Supp. “H” and “H-1”). In 2001, Kelsey-Hayes closed its Detroit manufacturing plan t, and negotiated a General Release and Termination Agreement [hereinafter , the “Plant Closing Agreement”] with the Union. The Plant Closing Agreement released Kelsey-Hayes from mo st—but not all—of its obligations under earlier CBAs. Healthcare bene fits that had been negotiated under the 1998 CBA remained intact and were incorporat ed by reference into the 2001 Plant Closing Agreement. The 2001 Agreement also included a general arbitration provision of broad applicability, providing that any disputes arising with the Uni on would be resolved through

arbitration:

1 Kelsey-Hayes Company and its parent company, TRW Automotive Holdings Corp., were acquired by Northrop Grumman in 2002. All three are named defendants in this case, referred to collectively and interchangeab ly, as “the Company” hereinafter.3 In the event the Union shall have any dispute or disagreement concerning the interpretation and application of this Agreement, the sole and exclusive recourse of the Union is to submit any dispute or disagreement in writing to the Company within thirty (30) days after the Union sh all reasonably have become aware of the existence of any such dispute or disagreemen t. Within ten (10) days of receipt of the written document, the Company and the Union shall meet to attempt to resolve the matter. Should the meeting fail to resolve the matter, arbitration shall be conducted in accordance with the labor arbitration rules of the American Arbitration Association. (2001 Plant Closing Agreement, ¶20). Following the execution of the 2001 Plant Cl osing Agreement, Kelsey-Hayes continued to provide health care benefits in compliance with the terms of the 1998 CBA for approximately ten years. In September 2011, however, retirees r eceived letters informing them of a change to

their healthcare. The letters announced that the Co mpany planned to terminate their participation in its retiree healthcare plan and require th em to purchase individual plans for Medicare supplemental insurance with HRA-funding instead.

II. In October 2011, the retirees filed this suit und er Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, alle ging violations of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), (a)(3), and claiming that the Company’s plan breached the terms of the 2001 Plant Closing Agreement and the terms of the 1998 CBA incorporated therein. Kelsey-Hayes moved for an order to comp el arbitration, relying on the 2001 Plant Closing Agreement’s general arbitration clau se. Plaintiffs opposed the motion, arguing that healthcare disputes were e xplicitly removed from arbitr ation under the 1998 CBA’s antiarbitration provision.4 The district court initially granted the motion to compel arbitration in its entirety, finding that the 2001 Plant Closing Agreement “extingui shed” the 1998 CBA anti-arbitration clauses. Upon reconsideration, however, the di strict court reversed itself in part, finding that not all of the Plaintiffs’ rights were governed by the 2001 Plant Closing Agreement. Specifically, the district

court concluded that a subset of the Plaintiffs—those who had retired prior to the plant closing in 2001—could not be bound by the terms of the Plant Cl osing Agreement, because their rights had already vested under the 1998 CBA: [T]he Plant Closing Agreement cannot alter the rights of thos e retirees who had already retired, and whose rights had alrea dy vested, prior to th e execution of this document. . . . [The Plaintiffs who chose to retire] prior to the signing of this Plant Closing Agreement are not bound by it. See Allied Chemical and Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 181, n. 20 (1971) (“[u]nder established contract principles, vested retirement rights may not be altered without the pensioner's consent”); Prater v. Ohio Education Association, 505 F.3d 437, 444 (6th Cir. 2007) (subsequent agreement between union and employer does not permit employer to amend or terminate retiree benefits that have alread y vested). Therefore, the now-challenged Order must be modified. Hence, those Pl aintiffs who retired prio r to April 17, 2001 cannot be required to arbitrate their claims because their benefits and interests are governed by the 1998 CBA. Kelsey-Hayes filed a timely notice of appeal, arguing that all of the Plaintiffs, including those who retired prior to the execution of th e 2001 Plant Closing Agreement, were bound by its general arbitration clause. The appeal raised several other issues which were voluntarily dismissed by the time we heard oral arguments in this case. The only remaining issue is whether employees of the Kelsey-Hayes manufacturing plan t who retired prior to the plant closing in 2001 and before the subsequent execution of the Plant Closing Agreement incurred any obligation to arbitrate their dis pute over retiree health care benefits, pursuant to the general

arbitration clause contained in the 2001 Plant Closing Agreement.5 III. This Court reviews a district court’s conclu sions of law regarding whether to compel

arbitration de novo. Watson Wyatt & Co. v. SBC Holdings, Inc. , 513 F.3d 646, 649 (6th Cir. 2008); see also Teamsters Local Union No. 89 v. Kroger Co. , 617 F.3d 899, 904 (6th Cir. 2010); United Steelworkers of Am. v. Cooper Tire & Rubber Co., 474 F.3d 271, 277 (6th Cir. 2007); Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306, 311 (6th Cir. 2000).

It is well-established that parties cannot be compelled to arbitrate a dispute unless they are contractually bound to do so by a vali d and enforceable prior agreement. Cooper, 474 F.3d at 277 (“[A] party cannot be forced to arbitrate a ny dispute that it has not obligated itself by contract to submit to arbitration.” (citation omitted)); see also IAM v. AK Steel Corp. , 615 F.3d 706, 711 (6th Cir. 2010) (“[A]rbitration is . . . a matte r of contract between th e parties. . . . [T]he parties [must] have agreed to submit to arbitrati on.”). A dispute is not arbi trable if the parties’ agreement “specifically excludes” the subject matter of that dispute from arbitration. Cleveland Elec. Illuminating Co. v. Utility Workers, 440 F.3d 809, 816 (6th Cir. 2006) (“[A] union and an employer may arbitrate retirement healthcare disputes only ‘if there is nothing in the agreement that specifically excludes the dispute from ar bitration,’ and then onl y with the retirees’ ‘consent.’”); see also Cooper , 474 F.3d at 279 (“[P]arties may ex clude disputes arising under a side agreement from arbitration sh ould they include a statement to that effect in the arbitration clause of the CBA or in the side agreement itself.”); UFCW v. Fresh Mark, 81 F.App’x. 23, 28 n.3 (6th Cir. 2003) (“[P]arties rou tinely exclude individu al claims for benefits from general CBA arbitration and grieva nce procedures.”). Here, the Kelsey-Hayes employees who re tired prior to the 2001 Plant Closing Agreement were no longer members of the Union at the time of the plan t closing and were not6 represented by the Union in the negotiation or execution of the Plant Closing Agreement. It is well established that when a union negotiates with an employer, the union represents only active employees, and it does not repres ent the interests of retirees absent their consent. See Allied, 404 U.S. at 181 n. 20 (“Since retirees are not members of the bargaining unit, the bargaining agent is under no statutory duty to represent them in negotiations with the employer.”); Amos v. PPG Indus., Inc. , 699 F.3d 448, 453 (6 th Cir. 2012). The Kelsey-Hayes employees who retired prior to the 2001 Plant Closing Agreement thus did not consent to the terms of the Plant Closing Agreement and cannot be compelled to arbitrate under provisions contained in that agreement.

IV. Accordingly, we AFFIRM the district court’s order.