Opinion ID: 1203285
Heading Depth: 2
Heading Rank: 2

Heading: Hourly Plaintiffs' LMRA and ERISA Claims

Text: Hourly plaintiffs claim their CBA with Philips Display vested employee health benefits and, accordingly, the subsequent termination of retirees' health insurance violated a contract between an employer and a labor organization representing employees in an industry affecting commerce under the LMRA. 29 U.S.C. § 185(a). Thus, the LMRA claimessentially a breach of contract allegationdetermines the outcome of the ERISA claim because [i]f the parties intended to vest benefits and the agreement establishing this is breached, there is an ERISA violation as well as a LMRA violation. Maurer, 212 F.3d at 914; see also Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir. 1991). A retiree health insurance plan is a welfare benefit plan under ERISA. Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 578 (6th Cir.2006). In contrast to pension benefits, [t]here is no statutory right to lifetime health benefits. Golden v. Kelsey-Hayes Co., 73 F.3d 648, 653 (6th Cir.1996). [11] Therefore, courts often look to collective bargaining agreements between unions and employers to see if the parties agreed to vest health benefits. See, e.g., Yolton, 435 F.3d at 578; Boyer v. Douglas Components Corp., 986 F.2d 999, 1005 (6th Cir.1993); see also Sprague v. General Motors Corp., 133 F.3d 388, 400 (6th Cir.1998) (To vest benefits is to render them forever unalterable.). If the parties vested health benefits, an employer's unilateral modification or reduction of those benefits constitutes an LMRA violation. Yolton, 435 F.3d at 578. This court has previously held that while the enforcement and interpretation of collective bargaining agreements under § 301 is governed by substantive federal law ... traditional rules for contractual interpretation are applied as long as their application is consistent with federal labor policies. UAW v. Yard-Man, Inc., 716 F.2d 1476, 1479 (6th Cir.1983); see also Yolton, 435 F.3d at 578-79. In the benefits context, such an interpretation should focus on the intent of the parties, looking to the explicit language of the collective bargaining agreement for clear manifestations of intent and interpreting each provision in question as part of the integrated whole. Yard-Man, Inc., 716 F.2d at 1479. When ambiguities exist, courts may also look to other provisions of the CBA and extrinsic evidence for guidance. Yolton, 435 F.3d at 579 (citing Yard-Man, Inc., 716 F.2d at 1480); see also Golden, 73 F.3d 648 (The aim in such cases is to settle on an interpretation which is harmonious with the entire agreement.). The CBA, however, need not contain an explicit intent to vest, in order for courts to find that rights have vested. Maurer, 212 F.3d at 915. A recent Sixth Circuit opinion aptly summarizes the continuing impact of International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Yard-Man, 716 F.2d 1476 (6th Cir.1983), this court's leading case for determining whether the parties to a CBA intended benefits to vest. Cole v. ArvinMeritor, Inc., 549 F.3d 1064 (6th Cir.2008). According to Cole, Yard-Man explained that retiree benefits are in a sense `status' benefits which, as such, carry with them an inference .... that the parties likely intended those benefits to continue as long as the beneficiary remains a retiree. Id. at 1482. With regard to the so-called  Yard-Man inference, later decisions of this court have stated that Yard-Man does not create a legal presumption that retiree benefits are vested for life. Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 579 (6th Cir.2006). Yard-Man is instead properly understood as creating such an inference only if the context and other available evidence indicate an intent to vest. Noe, 520 F.3d at 552. Id. at 1069. Plaintiffs argue that the district court erred in not considering the plan documents in its analysis. The district court held that reference to the SPDs would be appropriate only if the 2000 CBA was ambiguous as to whether retiree health insurance vested. Schreiber, 2007 WL 3036743 at  14 (citing UAW v. BVR Liquidating Inc., 190 F.3d 768 (6th Cir.1999)); see also BVR Liquidating, Inc., 190 F.3d at 774 (When a contractual provision is ambiguous, the court may turn to extrinsic evidence to discern the intent of the parties.); Smith v. ABS Indus., Inc., 890 F.2d 841, 846 n. 1 (6th Cir.1989) (considering testimony of retireesdespite it being extrinsic evidencein order to resolve the ambiguity in the contract); UAW v. Park-Ohio Industries, Inc., 1989 WL 63871 (6th Cir. June 15, 1989) (unpublished disposition) (That both parties have offered plausible interpretations of the agreement drawn from the contractual language itself demonstrates that the provision is ambiguous. Neither of the two proffered interpretations is frivolous nor unreasonable on its face, and inquiry should be permitted into extrinsic circumstances.). Because the district court concluded that the 2000 CBA contains express, durational language, unambiguously providing retiree medical insurance for its duration, and not beyond, the court refused to consider the SPDs, which it regarded as extrinsic, or any other extrinsic evidence. Schreiber, 2007 WL 3036743 at . Therefore, as an initial matter, we must examine the district court's decision that the CBA is unambiguous. [12] The hourly retirees look to the relevant portions of the CBA to argue that the document is subject to differing, though reasonable, interpretations. (Final Br. of Pls.-Appellants at 33.) Notably, these are the same portions of the agreement on which the district court relied in finding the document unambiguously did not vest retiree health benefits. First, the retirees point to the CBA's maintenance and amendment requirements as set forth in Schedule C. The requirements explain, inter alia, that [t]he Company will maintain during the remaining terms of this Agreement employee group insurance of the following types: ... non-occupational basic medical insurance, non-occupational major medical insurance.... (J.A. at 346.) Plaintiffs assert that the language created a general durational limitation that required the company to maintain the insurance for the period specified, but that it did not address or limit the vesting of those benefits upon retirement. In other words, plaintiffs argue that the clause provides that the insurance benefits must be maintained throughout the life of the CBA; it does not, however, provide that a worker who retires during the life of the CBA will lose those benefits when the CBA expires. In contrast, Philips interprets the clause as a specific durational limitation on the benefits themselves, even after retirement. (Final Br. of Defs.-Appellees at 17.) [13] Both parties cite Gilbert v. Doehler-Jarvis, Inc., 87 F.Supp.2d 788, 791 (N.D.Ohio 2000). The Gilbert court held that the clause in questionwhich provided that [t]his Insurance Program shall continue in effect until termination of the collective bargaining agreement of which this is a partreferr[ed] to the duration of the agreement, as opposed to the duration of the benefits described in that agreement.  Id. (emphasis in original). While we do not know the full context of the Gilbert Insurance Program, other case law explains that [a]bsent specific durational language referring to retiree benefits themselves, courts have held that the general durational language says nothing about those retiree benefits. Yolton, 435 F.3d at 581 (emphasis added); see also Cole, 549 F.3d at 1074 ( Yolton requires that a durational limitation must include a specific mention of retiree benefits in order to apply to such benefits.); Noe v. PolyOne Corp., 520 F.3d 548, 554 (6th Cir.2008). The clause at issue here can be understood either to relate to the duration of the listed benefits, or to the agreement itself. See Gilbert, 87 F.Supp.2d at 791. Nonetheless, like the agreements in Yolton and Noe, there is no language in the CBA that specifically states retiree benefits expire upon the termination of the agreement, and therefore the durational provision alone does not manifest a lack of intent to vest healthcare benefits upon retirement. Yolton, 435 F.3d at 581; see also Noe, 520 F.3d at 554 (noting that the contract language does not state that retiree benefits expire but, rather, speaks generically of all benefits for all employees). We conclude that the district court erred under our precedent in construing the CBA as including a specific durational clause limiting retiree healthcare benefits to the duration of the CBA. [14] Noe, 520 F.3d at 554; see also Maurer, 212 F.3d at 919 (holding a reservation of rights clause was effective against vesting because the language clearly included retirees and was distributed to them). The district court also relied on the Medical Plans section of the CBA which refers to retirees who meet the terms of the existing plan and are, therefore, entitled to purchase health insurance coverage on the same terms and at the same employee contribution levels as in effect for active employeesin accepting Philips' argument that the CBA only guaranteed retiree benefits for the duration of the agreement. According to defendants, this language recognized that retirees would not receive any set level of benefits but, instead, would only be entitled to those benefits of active employees at the Ottawa facility. (Final Br. of Defs.-Appellees at 24.) Plaintiffs, however, argue that this clause was a shorthand way to describe the varying rates of contribution available to retirees. (Final Br. of Pls.-Appellants at 34.) The Medical Plans section is not a model of clarity with regard to whether retiree health benefits vest. While the court could interpret the language only to provide benefits available to active employees at any moment in time, this is not the most obvious interpretation, and the provision does not provide a clear manifestation of intent that the benefits should or should not vest. Yard-Man, 716 F.2d at 1479-82. Analyzing a similar provision, this court held that [t]he language `will provide insurance benefits equal to the active group' could reasonably be construed, if read in isolation, as either solely a reference to the nature of retiree benefits or as an incorporation of some durational limitation as well. Id. at 1480. Because Schedule C is silent regarding retiree benefits and the Medical Plans section is ambiguous, the district court erred in concluding that the CBA unambiguously states that Philips only agreed to provide retirees `basic' and `major' medical insurance for the duration of the 2000 CBA. Schreiber, 2007 WL 3036743 at . Philips also argues that a prior arbitration opinion collaterally estops plaintiffs from asserting that the CBA is ambiguous on the relevant issue. In an arbitration proceeding between the IBEW and Philips Display, the arbitrator held that Philips had no obligation to provide life insurance benefits to retirees who retired after the expiration of the CBA. According to Philips, plaintiffs' claims here amount to a collateral attack on the arbitrator's decision. Cf. Hitchens v. County of Montgomery, 98 Fed.Appx. 106, 114 (3d Cir.2004) (unpublished disposition) ([D]ecisions against a union can bind members in a subsequent action). There is significant precedent holding that an arbitrator's decision has preclusive effect in federal court. See, e.g., Cent. Transp., Inc. v. Four Phase Sys., Inc., 936 F.2d 256, 257 (6th Cir.1991) (upholding a district court's grant of summary judgment because plaintiffs' remaining claims were based on facts already determined in favor of the defendants by the arbitration panel). Defendants, however, do not address the four elements of collateral estoppel. Cent. Transp., Inc., 936 F.2d at 260. Defendants merely state that the arbitrator considered this court's Yard-Man decision and still rejected the union's argument that LGP was required to provide insurance benefits to retirees after the expiration of the Ottawa contract. (Final Br. of Defs.-Appellees at 19.) Yet the elements of collateral estoppel require that: (1) the precise issue raised in the present case must have been raised and actually litigated in the prior proceeding; (2) determination of the issue must have been necessary to the outcome of the prior proceeding; (3) the prior proceeding must have resulted in a final judgment on the merits; and (4) the party against whom estoppel is sought must have had a full and fair opportunity to litigate the issue in the prior proceeding. Hamilton's Bogarts, Inc. v. Michigan, 501 F.3d 644, 650 (6th Cir.2007); see Bull v. United States, 63 Fed.Cl. 580, 590 (Fed.Cl. 2005) (rejecting the argument that because `the individual plaintiffs enjoyed the opportunity, through their union, to argue the question as to what statute authorizes the payment of overtime,' collateral estoppel is appropriate, as the issues in both cases must be identical to merit preclusive effect (quoting Shell Petroleum, Inc. v. United States, 319 F.3d 1334, 1338 (Fed. Cir.2003)) (internal citations omitted)). The arbitrator's decision addressed Philips' obligation to provide life insurance to employees who retired after the expiration of the contract. ( See J.A. at 230-33.) Significantly, the putative hourly class here is not limited to those who retired after the expiration of the contract but, rather, to those who retired after June 30, 2001. Further, although the durational clause is the same, the CBA contains separate and distinct clauses addressing health insurance coverage for retirees and life insurance coverage for retirees. Also, the arbitrator's decision was based on testimony as well as the CBA. [15] While the district court may conclude on remand that portions of plaintiffs' claims are barred by collateral estoppel, Philips has not established that the court's decision should be upheld on this alternative ground. [16] It does not appear that the arbitrator ever decided whether the durational provisions were general or specific, nor did he decide whether benefits vested for retirees who retired before the expiration of the CBA. He merely held that since there were no provisions in the contract extending the company's obligation to provide life insurance to retirees who retired after the expiration of the contract, the durational provisions terminated that obligation on September 28, 2003. (J.A. at 234.) The district court erred in concluding that the relevant provisions of the CBA are unambiguous and failing to consider the SPDs and extrinsic evidence. Thus, we reverse and remand the hourly plaintiff's LMRA and ERISA claims. [17]