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Timestamp: 2019-04-24 03:54:44+00:00

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FindACase | International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Honeywell International Inc.
International Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Honeywell International Inc.
Plaintiffs, including the UAW and the individually named Plaintiffs (retired hourly employees who worked for Defendant and its predecessors), filed the present action on September 15, 2011. Plaintiffs alleged ERISA violations and an anticipatory breach of the collective bargaining agreements (“CBAs”) entered into by the UAW and Honeywell International, Inc. (“Honeywell” or “Defendant”), specifically the scope and duration of retiree health care benefits to which the retirees are entitled. There are multiple outstanding motions, each of which has been fully briefed and is addressed below.
[T]he Company shall contribute the full premium or subscription charge applicable to the coverages of a pensioner (not including a former employee entitled to or receiving a deferred vested pension) and an employee terminating at age 65 . . .
See, e.g., Dkt. No. 49, Ex. 5 (1965 CBA), App'x C, Sect. 5(G), at 12-13; Dkt. No. 49, Ex. 8 (2003-2007 CBA), PgID 1905; Dkt. No. 49, Ex. 9 (2007-2011 CBA), PgID 19-12-13. With respect to the 2011 CBA (which the parties reference), the Court has only been presented with a “Memorandum of Terms of Settlement of the 2011 UAW-Honeywell Master Negotiations.” Nothing in that Memorandum addresses - or expressly eliminates - the “full premium” provision.
• The subject of health care benefits for present and future retirees, their dependents, and surviving spouses, including the limit described below on Company retiree health care contributions, will be a mandatory subject of bargaining for 2007 UAW Honeywell Master Negotiations and for all future UAW Honeywell Master Negotiations.
• The Company will pay the cost of retiree health care coverage during the term of the 2003 UAW Honeywell Master Agreement as described in its Insurance Section. The Company's contribution for health care coverage after 2007 for present and future retirees, their dependents, and surviving spouses covered under the UAW Honeywell Master Agreement shall not be less than (A) the actual amount of the Company's retiree health care contribution in 2007 or (B) the Company actuary's 2003 estimate of the Company's retiree health care contribution in 2007, whichever is greater. As stated above, this limit will be a mandatory subject of bargaining for 2007 UAW Honeywell Master Negotiations and for all future UAW Honeywell Master Negotiations. Notwithstanding such negotiations, the Company's contributions shall not be less than the greater of: (A) the actual amount of the Company's retiree health care contribution in 2007 or (B) the Company actuary's 2003 estimate of the Company's retiree health care contribution in 2007.
• The above limit on Company retiree health care contributions will not apply to any year prior to calendar year 2008.
• The provisions of this Agreement concerning Retiree Health Care Costs and the Company's obligation to bargain regarding retiree health care benefits shall be binding upon the successors and assignees of the Company, unless Honeywell chooses to retain such obligations. . . .
• Provided however this Agreement concerning Retiree Health Care Costs and the Company's obligation to bargain regarding retiree health care cost benefits shall not impair any existing legal rights that current retirees may have with respect to their post employment health care benefits.
• The Company and the Union agree to work together to develop possible ways to contain health care costs, including drug costs, that will benefit plan participants and the locations covered under the UAW Honeywell Master Agreement.
In connection with the closing of Defendant's Cleveland, Tennessee facility in 2004, Defendant and the UAW entered into a closing agreement that stated: “Honeywell shall incorporate the Cleveland UAW retirees and their dependents, and surviving spouses into its Honeywell UAW Master Agreement, solely for the purpose of negotiating the limit on Company retiree health care contributions.” Dkt. No. 49, Ex. 11, at 1. The Cleveland, Tennessee facility's closing agreement included essentially the same language as the Part VI language of the 2003 CBA. Dkt. No. 95, PgId. 4385.
In the 2007 CBA, Part VI was identical, except that it provided that “The above limit on Company retiree health care contributions will not apply to any year prior to calendar year 2012.” Again, the 2011 CBA (at least in the same form as the 2003 and 2007 CBAs produced during briefing) has not been filed with the Court. The “Memorandum of Terms of Settlement of the 2011 UAW-Honeywell Master Negotiations” does not include any provisions regarding retiree health care contributions for employees who retired prior to January 1, 2016. See, e.g., Dkt. No. 26, Ex. 1 at PgID 944.
On September 15, 2011, Plaintiffs filed the present action in the Eastern District of Michigan, alleging that Defendant's actions constituted anticipatory breach of the CBAs. Defendant notified retirees on September 19, 2011 of its intention to limit its health care contributions starting January 1, 2012. At a November 30, 2011 hearing before the New Jersey District Court, the UAW argued that it “doesn't bargain for retirees” and is not the “designated representative” for retirees. [Docket No. 27, Pg ID 1496, 1498] Ultimately, Defendant did not limit (or “cap”) its health care contributions for retirees as of January 1, 2012 but instead waited to do so until January 1, 2014.
On January 30, 2012, Defendant filed its Answer and Counterclaims against Plaintiffs. Defendant's counterclaims alleged fraudulent misrepresentation under Michigan and New Jersey law, negligent misrepresentation under Michigan and New Jersey law, breach of the implied warranty of authority under Michigan and New Jersey law. On March 13, 2012, Defendant amended its Answer and Counterclaim to include a counterclaim for fraudulent concealment. On March 28, 2013, the Court entered an Order denying all of Defendant's counterclaims except the counterclaim for breach of implied warranty of authority.
begin to cap contributions for those members of the class that (i) retired under the Honeywell-UAW Master CBA on or after May 3, 2003; or (ii) retired under the Cleveland, Tennessee CBA on or after March 13, 2004. This includes surviving spouses and eligible dependents of individuals that retired after those dates. Collections from those class members will commence on January 1, 2014. We will soon be sending out individual notices to those class members to inform them of the healthcare contributions they will owe beginning on January 1, 2014.
Plaintiffs objected on several grounds, including that the CBA did not contain a “cap.” Defendant responded that the contribution language in Part VI is a cap and not a floor on Honeywell's contribution obligation. Defendant indicated it would begin to impose the “caps” on 848 “UAW retirees and covered dependents” and “181 Cleveland TN retirees and covered dependents.” Defendant stated that the monthly contributions would range from 12.44 to $447.54 for Medicare-eligible retirees. Dkt. No. 49, Ex. 3. Defendant later sent letters to post-2003 retirees that it would be imposing a “cap” on January 1, 2014 (Dkt. No. 49, Exs. 14-15), and it did so. For retirees who could not or did not pay the premium amounts Defendant imposed, Defendant indicated that the retirees could not elect to receive the “capped” contribution obligation amount Defendant made on behalf of retirees who did pay premium amounts. Dkt. No. 49, Ex. 1.
A Court should grant summary judgment if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986). A fact is material if it could affect the outcome of the case based on the governing substantive law. Id. at 248. A dispute about a material fact is genuine if on review of the evidence, a reasonable jury could find in favor of the nonmoving party. Id.
The moving party bears the initial burden to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets this burden, the nonmoving party must “go beyond the pleadings and … designate specific facts showing that there is a genuine issue for trial.” Id. at 324. The Court may grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party's case. See Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 328 F.3d 870, 873 (6th Cir. 2003). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. “Conclusory allegations do not create a genuine issue of material fact which precludes summary judgment.” Johari v. Big Easy Restaurants, Inc., 78 F. App'x 546, 548 (6th Cir. 2003).
When reviewing a summary judgment motion, the Court must view the evidence and all inferences drawn from it in the light most favorable to the nonmoving party. Kochins v. Linden-Alimak, Inc., 799 F.2d 1128, 1133 (6th Cir. 1986). The Court “need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3). The Court's function at the summary judgment stage “is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249.

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