Opinion ID: 1372750
Heading Depth: 2
Heading Rank: 5

Heading: B.2.a. Section 301 Pleading Sufficiency

Text: The parties dispute whether the Plaintiffs have plausibly alleged a violation of the CBA. The Plaintiffs allege that Defendants unilaterally modified the Plaintiffs' vested health-care benefits. Health-care benefits vest only if the parties so intend. Noe v. PolyOne Corp., 520 F.3d 548, 552 (6th Cir.2008). If the parties do not intend to vest the benefits, the former employer can modify the retiree benefits without breaching a collective bargaining agreement. In determining whether the parties intended health care benefits to vest, this Court applies the principles first described in UAW v. Yard-Man, 716 F.3d 1476, 1479 (6th Cir.1983). In Yard-Man, we held that, when interpreting a collective bargaining agreement, a court must start with the explicit language. Id. General principles of contract interpretation should guide a district court's interpretation of the explicit language. [7] When a contractual provision is ambiguous, the court may turn to extrinsic evidence. UAW v. BVR Liquidating, Inc., 190 F.3d 768, 774 (6th Cir.1999). Language in a collective bargaining agreement that equate[es] eligibility for retiree health benefits with eligibility for a pension suggests an intent to vest. McCoy v. Meridian Auto. Sys., Inc., 390 F.3d 417, 421 (6th Cir.2004) (citing Golden v. Kelsey-Hayes Co., 73 F.3d 648 (6th Cir.1996)). Courts reviewing a collective bargaining agreement must also keep in mind the context of labor-management negotiations on retiree health-care benefits: because retirement health care benefits are not mandatory or required to be included in an agreement, and because they are `typically understood as a form of delayed compensation or reward for past services' it is unlikely that they would be `left to the contingencies of future negotiations.' Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 580 (6th Cir.2006) (quoting Yard-Man, 716 F.2d at 1481-82). Here, the Plaintiffs have pointed to language in the collective bargaining agreement sufficient to survive a 12(b)(6) motion. In their Complaint, the Plaintiffs pointed to language in the November 6, 2000 CBA between M & G and the USW: Employees who retire on or after January 1, 1996 and who are eligible for and receiving a monthly pension under the 1993 Pension Plan ... whose full years of attained age and full years of attained continuous service ... at the time of retirement equals 95 or more points will receive a full Company contribution towards the cost of [health-care] benefits. .... Employees who have less than 95 points at the time of retirement will receive a reduced Company contribution. The Company contribution will be reduced by 2% for every point less than 95. Employees will be required to pay the balance of the health care contribution, as estimated by the Company annually in advance, for the [health-care] benefits.... Failure to pay the required medical contribution will result in cancellation of coverage. (emphasis added). The district court held that the full Company contribution language meant that qualifying retirees will receive the total amount of the company's potential contribution toward the cost of health benefits. Tackett, 523 F.Supp.2d at 695. The district court found that the language, [e]mployees will be required to pay the balance of the health care contribution, supported its reading. Id. at 696. We disagree with the district court's reading of the relevant portions of the CBA. First, the full Company contribution language suggests that the parties intended the employer to cover the full cost of health-care benefits for those employees meeting the age and term-of-service requirements. Keeping in mind the context of the labor-management negotiations identified in Yard-Man, we find it unlikely that Plaintiff USW would agree to language that ensures its members a full Company contribution, if the company could unilaterally change the level of contribution. The CBA has no limitation on the amount of a company contribution and if the Defendants' argument were accepted, the company presumably could lower the contribution to zero without violating this language. Such a promise would be illusory. Second, the limiting language, [e]mployees will be required to pay the balance of the health care contribution, follows the provision requiring contributions by those retirees who had not attained the requisite seniority points. From the placement of this language, we can reasonably infer that it did not apply to all retirees, but only to those retirees who had not attained the requisite seniority points. Third, the collective bargaining agreement tied eligibility for health-care benefits to pension benefits. This is another factor indicating that the parties intended the health care benefits to vest upon retirement. We hold that the Plaintiffs' Complaint presented a plausible claim that the parties intended to vest health-care benefits. Accordingly, we hold that the district court erred in granting the Defendants' Rule 12(b)(6) motion on the § 301 claim.