Opinion ID: 799219
Heading Depth: 4
Heading Rank: 2

Heading: Unilateral Modification

Text: Defendants argue, in the alternative, that the district court erred in concluding that reservation-of-rights language found in the three SPDs themselves did not preclude the vesting of retiree health insurance benefits. See Reese, 574 F.3d at 323-24; Prater, 505 F.3d at 444-45; McCoy v. Meridian Auto. Sys., Inc., 390 F.3d 417, 424-25 (6th Cir.2004). This line of cases recognizes an exception to the general ruleapplicable to collective bargaining agreementsthat `an existing contract cannot be unilaterally modified.' Prater, 505 F.3d at 443 (Were it otherwise, the option of either party to modify a contract unilaterally would defeat the essential purpose of reaching an agreement in the first placeto bind the parties prospectively.). The exception arose out of the holding in Maurer that a widely distributed SPD, issued after the CBA had been signed, prevented retiree health benefits from vesting because the union had failed to contest the SPD's express reservation of the right to curtail or eliminate coverage for any treatment, procedure, or service regardless of whether [the employee is currently] receiving treatment.  Maurer, 212 F.3d at 913 (emphasis added). That is, once the unqualified unilateral right was asserted in the SPD, `the Union was obligated to grieve or enter suit' if it disagreed with the employer's assertion of authorityeven if that assumption of authority came after the effective date of the relevant collective bargaining agreement. Prater, 505 F.3d at 444 (quoting Maurer, 212 F.3d at 919). However, as explained in Prater, to read Maurer broadly would run headlong into the rule that a plan summary `cannot vitiate contractually vested or bargained-for-rights. ' Prater, 505 F.3d at 444 (citation omitted). As a result, the Maurer exception for unilateral modification has been expressly limited to `unqualified reservation-of-rights language,' that claims a `unilateral right by the employer to terminate coverage without regard to existing or future collective bargaining agreements.' Id. (citations omitted). Although this standard is necessarily case specific, McCoy, Prater, and Reese each found the reservation of rights were not sufficiently unqualified so as to fairly be expected to prompt an immediate protest by the union. [9] The reasons given in those cases included: (1) that the SPD acknowledged that termination or modification would be subject to the provisions of any applicable CBA ( McCoy and Prater ), or that any conflict would be governed by the official plan documents or labor agreements ( Reese ); (2) that, unlike in Maurer, the reservation of rights did not assert an explicit right to terminate coverage for even current treatment ( Prater ); and (3), [p]erhaps most importantly, the CBA expressly provided that it could not be amended without mutual signed consent of the parties ( Prater ). Elaborating on the last of these, we explained that the prohibition on unilateral modification in the CBA meant that the union could not be required to protest the SPD as long as the summary does not explicitly renounce the [CBA]. Prater, 505 F.3d at 445. [10] Aetna Summary. Defendants rely specifically on a provision from the first booklet, a 1978 Aetna Group Plan (Aetna Summary) covering various group insurance benefits, including medical insurance, which stated among its general provisions: Change or Discontinuance of PlanIt is hoped that this Plan will be continued indefinitely, but, as is customary in group plans, the right of change or discontinuance at any time must be reserved. Also, after specifying the benefits for the various group plans, a separate summary stated: Your contributions toward the cost of the contributory coverages provided by this Plan will be deducted from your pay and they are subject to change. Despite defendants' comparison to Maurer, the Aetna reservation of rights did not specifically claim a unilateral right to terminate coverage without regard for existing or future CBAs. Cooper SPDs. Defendants also rely on a Cooper Industries Health Care PlanRetired Employees marked with 10/89-STD on the back (1989 Cooper SPD) and a Cooper Industries Comprehensive Retiree Medical Plan marked 1/93 GWI (1993 Cooper SPD). Defendants contend, in particular, that the 1989 Cooper SPD mandates reversal of the judgment with respect to all post-1985 retirees ( i.e., the 1986 to 1993 group). Under the heading background information, the 1989 Cooper SPD states: Amendment or Termination of the Plan: Although the Company expects to continue the Plan in its present form, the Company may amend the Plan from time to time, or it may terminate the Plan altogether at some point. Amendments to the Plan could result in changes in the benefit eligibility rules under the Plan, and in the benefit provisions under the Plan. A termination of the Plan could mean that all benefit payments immediately cease, or that benefit payments would be discontinued at some future date. An amendment or termination of the Plan could affect your eligibility for benefits under the Plan. The Company will notify you if it changes or terminates the Plan. The exact same language was used in the 1993 Cooper SPD. The district court found that this reservation was not sufficiently unqualified because the SPDs otherwise reaffirmed that the CBAs would control any conflict. Bender, 725 F.Supp.2d at 659 (relying on Prater and Reese ). Specifically, both Cooper SPDs included the same introductory provisions explaining, in part, that: This booklet is a `plain language' summary of your retiree health care benefits.... The highlights of the plan in easy to understand language appear in this space at the beginning of each section. This introduction concluded with the following explanation: At the top of each section is a brief explanation of the information in that section. This is followed by a general explanation of important information you should know about the plan. Sometimes, when plain language is used to explain the provisions of what is essentially a legal document, disagreements arise between the meaning given in the explanation and the wording of the legal document. We do not expect that to happen, but if it should, the wording in the legal document will apply. (Emphasis added.) Attempting to distinguish Prater and Reese, defendants argue that the deference given to a legal document in this provision must mean deference to the formal plan rather than to the CBA. It is true that the SPDs in Prater and Reese specifically acknowledged that the CBAs would control. But, the record in this case does not appear to contain any formal plan associated with the Cooper SPDs, and the CBAs provided health insurance benefits as set forth in a booklet and policy. The district court did not err in finding that the Cooper SPDs did not include an unqualified assertion of a unilateral right to end retiree medical insurance benefits without regard for existing or future CBAs. [11] However, even when the Maurer exception does not apply, the summaries nonetheless serve as extrinsic evidence regarding the extent of the employer's promise of future healthcare benefits and whether the parties intended the benefits to vest. Prater, 505 F.3d at 445.