Opinion ID: 2977409
Heading Depth: 2
Heading Rank: 1

Heading: Vesting of healthcare-benefit plans

Text: There are two types of employee benefit plans: pension plans and welfarebenefit plans. Noe v. PolyOne Corp., 520 F.3d 548, 552 (6th Cir. 2008). Although pension plans are subject to mandatory vesting under ERISA, welfare-benefit plans are not. Id. Retiree healthcare-benefit plans, such as those involved here, are welfarebenefit plans; vesting only occurs if the parties so intended when they executed the applicable labor agreements. Id. “A court may find vested rights ‘under a CBA even if the intent to vest has not been explicitly set out in the agreement.’” Id. (quoting Maurer v. Joy Technologies., Inc., 212 F.3d 907, 915 (6th Cir. 2000)). If the rights to No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 8 healthcare coverage have vested, then the unilateral termination of coverage violates § 301 of the LMRA. Id. Employers are free, on the other hand, to terminate any unvested welfare benefits upon the expiration of the relevant CBA. Id. This circuit’s leading case for determining whether the parties to a CBA intended benefits to vest is International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983). Yard-Man instructs that basic rules of contract interpretation apply, meaning that the courts must first examine the CBA language to see if clear manifestations of an intent to vest are present. Id. at 1479. Furthermore, each provision of the CBA is to be construed consistently with the entire CBA and “the relative positions and purposes of the parties.” Id. The terms of the CBA should be interpreted so as to avoid illusory promises and superfluous provisions. Id. at 1480. Yard-Man also 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. Where an ambiguity exists in the provisions of a CBA, the court may resort to extrinsic evidence to ascertain whether the parties intended for the benefits to survive the agreement. Int’l Union, United Auto. Aerospace & Agric. Implement Workers of Am. v. BVR Liquidating, Inc., 190 F.3d 768, 774 (6th Cir. 1999). If an examination of the available extrinsic evidence fails to conclusively resolve the issue and a question of intent remains, then summary judgment is improper. Int’l Union, United Mine Workers of Am. v. Apogee Coal Co., 330 F.3d 740, 744 (6th Cir. 2003). We review a district court’s grant of summary judgment de novo. Nichols v. Moore, 477 F.3d 396, 398 (6th No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 9 Cir. 2007). Likewise, de novo review applies to questions of contract interpretation. Yolton, 435 F.3d at 577.