Court Opinion

ID: 9471163
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:26:04.665259+00
Date Added: 2024-06-11T17:42:17.530222
License: Public Domain

HOLSCHUH, District Judge,
concurring in Part I, dissenting in Part II.
I fully concur in the majority’s holding in Part I of its opinion that Yard-Man, in terminating the life and health insurance benefits of its retired employees at the expiration of the collective bargaining agreement, breached that agreement.
However, I must respectfully dissent from the majority’s holding in Part II of its opinion. I believe that the judgment of the District Court ordering specific performance of Yard-Man’s contractual obligation to purchase an annuity for its retirees should be affirmed for several reasons. First, the District Court’s rejection of YardMan’s sole defense in the lower court of substantial performance is not contested on this appeal, and Yard-Man cannot raise for the first time on appeal the alleged affirmative defenses of accord and satisfaction and estoppel. Second, even if these defenses could be asserted for the first time on appeal, there is no evidence in this record that would support them. Third, and of great importance, even if these defenses could now be asserted for the first time, the application of these defenses under the circumstances of this case would be inconsistent with national labor policies and should not be incorporated into the substantive federal law governing this action. The majority opinion finding the defense of accord and satisfaction to be applicable in this case represents, in my view, a troublesome precedent that could encourage an employer who desires to change retirement benefits to ignore the union that won those benefits in the collective bargaining process and to deal directly with the unorganized and economically vulnerable retirees.
I.
Under the collective bargaining agreement between Yard-Man and the UAW, employees and retirees at Yard-Man’s Jackson, Michigan plant were covered by two separate pension plans — the Basic Plan, a qualified plan under the Employee Retirement Income Security Act of 1974 (ERISA), and the Improved Plan, a non-qualified plan under ERISA. With respect to the Improved Plan, Article XVIII of the agreement expressly and unequivocally required Yard-Man, in the event of a business failure, to “fund the balance of the pension benefits payable to employees then on retirement through the purchase of an annuity from a life insurance company.” Yard-Man does not dispute that the closing of the Jackson plant was an event under Article XVIII that triggered Yard-Man’s duty to purchase the required annuity.
Following the closing of the Jackson plant in 1975, the union brought this action in October 1977 seeking, among other forms of relief, specific performance of YardMan’s obligation to purchase the required annuity. After this action had been commenced, Yard-Man requested from five major insurance companies bids for an annuity to cover benefits under both the Basic Plan *1489and the Improved Plan. Three of the five companies responded with quotations. New York Life Insurance Company refused to bid on the Improved Plan because it was a non-qualified pension plan; the Travelers Insurance Company submitted a bid on the Improved Plan contingent upon the award of the annuity for the Basic Plan; and the Metropolitan Life Insurance Company submitted a bid for both plans on the assumption that the Improved Plan was a qualified pension plan. Yard-Man chose to accept Metropolitan’s bid to cover the Basic Plan only, thereby rejecting Travelers’ bid to cover both the Basic and Improved Plans.
Yard-Man decided that, rather than purchasing the required annuity for the Improved Plan (at considerable expense to Yard-Man), it would unilaterally, without notice to the union, terminate all further payments that the annuity would have provided and distribute instead lump sum cash payments in amounts determined by YardMan to be equal to the present value of the expected future payments under the Plan. Yard-Man then sent the following notice to the retirees participating in the Improved Plan:
NOTICE TO FORMER PARTICIPANTS IN THE YARD-MAN PENSION PLAN-JACKSON
The Improved Yard-Man Pension Plan— Jackson was an arrangement by which Yard-Man Inc. made gratuitous payments out of general assets to supplement benefits provided under the Yard-Man Pension Plan — Jackson. The Improved Plan was designed to provide at least a minimum amount of benefits to participants who retired on or before July 31, 1975. Improved Plan benefits were included in with your periodic payments made under the Yard-Man Pension Plan — Jackson through October 31, 1978.
Effective November 1, 1978, each participant in the Improved Yard-Man Pension Plan — Jackson will receive a lump sum payment equal to the present value of all his or her expected future payments (see cover letter for figures). There will be no further payments made after the lump sum distribution. This lump sum distribution is not being made from a qualified retirement plan.
Any overpayments made under the YardMan Pension Plan — Jackson will be recovered by reducing the amount of any lump sum distribution. However, if the overpayment exceeds the amount of any lump sum distribution, there will be no additional reduction in benefits. If you have any questions, please contact YardMan Inc., Montgomery Ward Plaza, 3N, Chicago, II 60671.
II.
It is undisputed that at the time this lawsuit was filed on October 5, 1977, YardMan had not purchased the annuity required by Article XVIII of Yard-Man’s contract with the union. Accordingly, in Count II of its Complaint the union sought specific performance of Yard-Man’s contractual obligation to fund by purchase of an annuity the balance of the pension benefits due under the Improved Plan.
Yard-Man’s Answer to Count II was basically an admission of its obligation but a denial of the breach and a denial of the union’s claimed right of arbitration (subsequently waived by agreement of the parties). Although the Answer set forth a list of affirmative Defenses, it included neither estoppel, as it is now asserted,1 nor accord and satisfaction. It is understandable, of course, why Yard-Man initially did not plead in its Answer the affirmative defenses of accord and satisfaction and estoppel based upon receipt by retirees of the cash distributions, since no such distribution had yet been made. Yard-Man filed its Answer on February 6, 1978, and made the cash distributions on or about November 1,1978.
*1490Although Yard-Man in its Answer reserved the right “to plead such further defenses after continuing investigation and discovery pursuant to court rules,” the record is clear that Yard-Man never filed any supplemental Answer raising the defenses of accord and satisfaction and estoppel arising from the cash distribution or sought to add either of those defenses to the list of affirmative defenses attached to its original Answer. The record is also clear that YardMan had ample opportunity subsequent to the cash distribution to raise these defenses. The union filed its motion for summary judgment in February 1979, and Yard-Man responded to that motion and filed its cross-motion for summary judgment in March 1979. The District Court held a hearing on the motions for summary judgment in April 1979 — some five months after the cash distributions were made. At no time did Yard-Man assert either of the defenses it now raises as any defense to the union’s motion for summary judgment or as a basis to support its own motion for summary judgment — either in the briefs filed or in the oral arguments made in the District Court.
In its trial court brief, Yard-Man contended that “the lump sum distribution constitutes substantial compliance with the contract provision and was the only viable alternative open to defendant by which the benefits of the Improved Plan could be distributed,” (J.A. 81A), and that “performance of the literal language of Article XVIII Section 1 was impossible and that a reasonable alternative form of compliance was adopted.” (J.A. 83A). In the oral argument, Yard-Man again argued that in view of “the practicalities of the situation,” Yard-Man “attempted to do what was reasonable, what was fair.” (J.A. 166-167A). The District Judge found neither the argument of “substantial compliance” nor that of “impossibility of performance” to be meritorious, finding, instead, that YardMan could have purchased the required annuity but chose to make the cash distributions simply because it was the most economical course for Yard-Man to take. (J.A. 110A).
My examination of the Joint Appendix reveals that the defenses of accord and satisfaction and estoppel were raised for the first time before this Court in the brief filed by Yard-Man.2 Although the union responded to the appellant’s arguments, I do not believe appellee’s response prevents this Court from adhering to its firmly established principle of considering on appeal only questions that were presented to the District Court. Ash v. Board of Education of Woodhaven School Dist, 699 F.2d 822, 827 (6th Cir.1983); Roberts v. Berry, 541 F.2d 607, 610 (6th Cir.1976); Compton v. Tennessee Dept, of Public Welfare, 532 F.2d 561, 563 n. 1 (6th Cir.1976).
This appeal, therefore presents a situation in which the defendant failed to raise before the trial court two defenses that are required by Fed.R.Civ.P. 8(c) to be raised as affirmative defenses and now, after judg*1491ment has been rendered in favor of plaintiff, defendant raises them for the first time on appeal from that judgment. Clearly, in my view, under these circumstances an appellate court should not consider these waived defenses and belated arguments, thereby giving the defendant an undeserved “second bite of the apple.” Inasmuch as the affirmative defenses were not raised in the trial court, it is incorrect to say, as the majority does, that they were “rejected without discussion by the District Court” or that “the District Court held that, as a matter of law, Yard-Man could not provide a substituted performance in accord and satisfaction of contractual obligations to the retirees.” The District Court did not reject these defenses nor did it reach any conclusion regarding their applicability, simply because they were never presented to that Court. The District Judge having committed no error, the judgment below should be affirmed.3
III.
Even if it is assumed that the applicability of the defenses of accord and satisfaction and estoppel is properly before the appellate court for review, then it is important, at the outset, to determine specifically what issues this case does and does not present for our consideration. In my opinion, the reasoning of the majority is based in part upon issues that are not involved in this case.
No dispute has ever existed in this case concerning Yard-Man’s express, unambiguous promise in the collective bargaining agreement to purchase for the retirees the insurance company annuity set forth in Article XVIII of the contract. Yard-Man has never denied this obligation. Instead of fulfilling that promise, however, Yard-Man unilaterally, without any prior notice to the union or retirees and without any prior consent or agreement of the union or retirees, decided that it would not fulfill that promise because of the cost to Yard-Man but, instead, would terminate the Improved Plan and send lump sum cash payments, in amounts determined solely by Yard-Man, to the retirees. This attempt by Yard-Man unilaterally to modify the contract by selecting a benefit of Yard-Man’s choosing for a benefit that was included in its collective bargaining agreement with the union was an obvious breach of that agreement. The issue, therefore, is more correctly stated as follows: whether an employer, having contractually bound itself in a collective bargaining agreement to provide certain vested benefits to its retirees, may unilaterally modify that contract, without notice to or consent of the union, the other contracting party, by selecting different types of benefits for the retirees and then assert, in a breach of contract action by the union, the defenses of accord and satisfaction and estoppel based upon the failure of the retirees to reject those benefits.
*1492While it is important to state the precise issue that is before us, it is equally important to state what is not before us. Contrary to the majority’s statement of the issues, this case does not involve any “settlements” by the retirees of any disputed claims, either collectively or individually. Yard-Man never denied its contractual obligation to the retirees. This case is to be distinguished, therefore, from cases in which an employee or a retiree seeks in a § 301 action to enforce the terms of a collective bargaining contract, the employer denies any liability under the contract, and a third party is called upon to resolve a dispute over the interpretation or applicability of the contract.4 The present case, to the contrary, involves an attempt by the employer to change the terms of a collective bargaining agreement regarding an entire class of beneficiaries. Instead of providing the benefits admittedly required by the contract, the employer, on its own initiative and without notice to or approval of the other contracting party, unilaterally chose to provide an entirely different kind of benefit. It is, purely and simply, a unilateral modification of the contract, constituting a breach of that contract, and it is my belief that under the circumstances of this case the common law defenses of accord and satisfaction and estoppel are not applicable as a matter of common law. Even if applicable as a matter of common law, the assertion of such defenses under the circumstances of this case would be contrary to firmly established policies of federal labor law.
IV.
The majority sets forth the basic elements of the common law defense of accord and satisfaction as follows: “there must be a disputed claim, a substituted performance agreed upon and accomplished and valuable consideration.” As Judge Frank noted in Fleming v. Post, 146 F.2d 441 (2d Cir.1944), “[a] condition precedent to a valid accord and satisfaction is the establishment of a bona fide dispute over liability.” I fail to see any “bona fide dispute over liability” in the present case. Yard-Man never denied its obligation to purchase an annuity to fund the Improved Plan; it simply tried to discharge that obligation in a manner different than that required by the contract. In other words, the dispute in this case is not over Yard-Man’s contractual liability; the dispute is over the payments themselves, i.e., did they constitute “substantial compliance” with Yard-Man’s contractual duty. The payments were not in response to a disputed claim; they created a disputed claim.
Furthermore, I have difficulty in finding any evidence that “a substituted performance agreed upon and accomplished” existed under the facts of this case. Yard-Man’s idea of what would be a “substituted performance” was Yard-Man’s idea and no one else’s. It did not discuss this possible substitution with the union; it did not discuss it with the retirees. In fact it never sought approval of anyone, other than perhaps its own attorney, to make this substitution. The majority, however, finds nothing wrong with Yard-Man’s conduct in bypassing the union, citing a number of cases in which there has been a “meeting of the minds on a substituted performance when the legal representative of the suing party has not been contacted.” Those cases, however, all involved actions in which parties to litigation, without the approval of their attorneys, settled their disputes. I have absolutely no quarrel with the established principle that parties have a right to settle or compromise their litigation without the knowledge or consent of their attorneys. That proposition would be applicable here if defendant Yard-Man and plaintiff union had met and reached an agreement, subject to the vested rights of the beneficiaries, to settle this litigation, even though the agreement was reached without the knowledge *1493or consent of their respective attorneys. However, I do not think the principle is applicable when the parties to this litigation never reached a settlement, compromise or agreement.
The plaintiff in this ■ action was never consulted about Yard-Man’s proposed substituted performance. Moreover, YardMan’s notice to the retirees did not constitute a suggestion, a request or a choice. It was a statement of a fact accomplished— not an offer to be accepted or rejected by the retirees. Few, if any, elderly retirees are familiar with the subtle refinements of the doctrine of accord and satisfaction, and no basis exists for any finding that an accord and satisfaction defense could be available to Yard-Man under the circumstances of this case.
Nor, of course, could any estoppel defense be available to Yard-Man. In Lovetri v. Vickers, Inc., 397 F.Supp. 293 (D.Conn. 1975), the employer, upon closing a plant, sent termination notices that gave plaintiff retirees the option of receiving a cash payment or an annuity. The plaintiffs elected the option of receiving the cash but subsequently brought suit claiming that the employees were entitled to a more favorable choice of benefits. In rejecting any estoppel defense, the court said,
[pjlaintiffs, however, cannot be estopped because they took cash “in lieu of” their pension benefits. They were not offered the cash as a liquidation of a disputed right, Fleming v. Post, 146 F.2d 441 (2d Cir.1944), or as a part of a plant closing agreement intended to supersede the pension plan and their rights thereunder, cf. Craig v. Bemis Co., Inc., 374 F.Supp. 1251 (S.D.Ala.1974). Whatever the language used in the notice of termination of employment, plaintiffs were offered what defendant even now maintains were their rightful options under the pension plan. They did not forfeit the right to challenge the adequacy of the choice simply because they elected one or the other of the options they were given.
Id. at 297.
The employer in the present case did not give the retirees any option; the employer did not offer cash payments as a liquidation of a disputed right; the employer does not allege the existence of a plant closing agreement intended to supersede the collective bargaining agreement; and clearly the retirees are not estopped from demanding enforcement of their contract rights by virtue of Yard-Man’s arbitrary decision to substitute something else in place of what the union bargained for. Aside from the fact that the required elements of an estoppel are nowhere present in this record insofar as the retirees are concerned, the plaintiff seeking enforcement of the contract in this action is the other signatory to the contract, the employees’ union. Yard-Man does not assert — nor could it — any claim that the union has done anything that would be the basis for an estoppel defense.
V.
Even if Yard-Man had raised accord and satisfaction and estoppel as defenses in the lower court and even if some evidence existed in this record to legitimately support such defenses, I would hold — as a matter of federal substantive law — that in suits under § 301 the assertion of such state law defenses under the circumstances of this case is incompatible with federal labor policy.
A.
As the majority correctly notes in Part I of its opinion, it is well settled that the enforcement of collective bargaining agreements under § 301 is governed not by state law but by federal substantive law. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1956). The majority also recognizes that in the absence of express federal substantive law a federal court may look to state law in fashioning new federal substantive law. However, the Lincoln Mills Court cautioned that courts are to utilize state law only if it is compatible with the purposes of § 301 and only if it is “the rule that will best effectuate the federal policy.” Id. at 457, 77 S.Ct. at 918 (emphasis added).
*1494The majority has apparently concluded that the application of the Michigan law of accord and satisfaction to the facts of this case is to no extent inconsistent with national labor policies, that application of such law “will best effectuate the federal policy,” and that such law is, therefore, properly absorbed as federal law. My opinion, however, is that the state law contract defense of accord and satisfaction as applied in this case is inconsistent with federal labor policy and that this is a case in which “preoccupation with the doctrines of ordinary contract law will thwart realization of Congressional policy.” United Brotherhood of Carpenters and Joiners v. Hensel Phelps Construction Co., 376 F.2d 731, 735 (10th Cir.1967).
When determining whether the application of state law is compatible with federal labor policy, it is important to note that since Lincoln Mills the Supreme Court has repeatedly emphasized that a collective bargaining agreement is not an ordinary contract and is not governed by ordinary contract principles that govern contracts between private parties. Trans-Communications Employees Union v. Union Pacific Railroad, 385 U.S. 157, 87 S.Ct. 369, 17 L.Ed.2d 264 (1966); John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Accordingly, federal courts have not hesitated to depart from basic contract principles in dealing with collective bargaining agreements. For example, in John Wiley & Sons, supra, the Court held that under certain conditions nonparties may be bound by a collective bargaining agreement. Similarly, in Darnel v. East, 573 F.2d 534 (8th Cir.1978), the Eighth Circuit Court of Appeals rejected the contract defense of lack of consideration as incompatible with federal labor policy. “In dealing with such agreements courts should not be preoccupied with principles which might apply to an ordinary contract." Hendricks v. Airline Pilots Association International, 696 F.2d 673, 676 (9th Cir.1983), (citing Lodge 1327, Int’l Ass’n of Machinists v. Fraser & Johnston Co., 454 F.2d 88, 92 (9th Cir.1971)).
B.
In reaching its conclusion that YardMan’s assertion of the defense of accord and satisfaction, arising from Yard-Man’s deliberate bypassing of the union and direct dealing with individual retirees, is not incompatible with federal labor policies, the majority relies heavily upon Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971). That case does not, in my view, support such a conclusion.
In Pittsburgh Plate Glass the employer informed the union of its intention to write each retired employee, offering to pay that retiree’s supplemental Medicare premium if the employee would withdraw from the negotiated health insurance plan. Despite the union’s objections, the company circulated its proposal or offer to the retired employees, and 15 of the 190 retirees elected to accept it. The union filed an unfair labor practice charge against the employer, contending that the employer’s conduct was a refusal to bargain collectively with the union and a unilateral mid-term modification of the contract in violation of 29 U.S.C. §§ 158(a)(5) and 158(d). The single and only issue was whether the employer had committed an unfair labor practice. The Supreme Court concluded, as a matter of statutory history and construction, that the statute requiring collective bargaining “with respect to wages, hours, and other terms and conditions of employment” included neither retirement benefits nor retirees within its scope. The Court also held that a “modification” of a collective bargaining contract is a prohibited unfair labor practice only when it changes a term that is a mandatory rather than a permissive subject of bargaining. At the same time, however, the Court pointed out that the narrow issue before it did not concern the enforceability of the contractual obligations to the retirees. Id. at 177 n. 17, 92 S.Ct. at 396 n. 17. The Court ended its decision with the important statement that,
[t]he remedy for a unilateral mid-term modification to a permissive term lies in *1495an action for breach of contract, ... not in an unfair-labor-practice proceeding.
Id. at 188, 92 S.Ct. at 402 (footnote omitted).
The present action is, of course, exactly the type of breach of contract action under § 301 that the Supreme Court indicated is the proper course to enforce compliance with the terms and conditions of the collective bargaining agreement. Nothing in Pittsburgh Plate Glass affects to the slightest degree the fundamental law that in such contract enforcement actions considerations of national labor policies override incompatible common law defenses.
Relying upon Pittsburgh Plate Glass, the majority concludes that 29 U.S.C. § 159(a), in particular the proviso contained therein, has no application to retirees. The proviso reads as follows:
Provided, that any individual employee or a group of employees shall have the right at any time to present grievances to their employer and to have such grievances adjusted, without the intervention of the bargaining representative, as long as the adjustment is not inconsistent with the terms of a collective-bargaining contract or agreement then in effect: Provided further, that the bargaining representative has been given opportunity to be present at such adjustment.
I agree that this statute has no direct application to the retirees in this case. By its express terms it applies only to employees and only to the presentation of grievances by those employees. But the critically important aspect of this statute is its codification of one of the most fundamental principles of national labor law, i.e., that collective bargaining contracts, once executed, are to be strictly enforced according to their terms. The statute in question permits the employer, after notice to the union, to adjust an employee’s grievance under the contract, but it does not permit the employer to make any adjustment that is inconsistent with the terms of the agreement.
Just as an employer may adjust or settle an employee’s individual grievance, provided it is not inconsistent with the terms of the collective bargaining contract, so may an employer adjust or settle a retiree’s individual claim that is in dispute. The employer’s freedom to compromise and settle an individual’s disputed claim is not, however, a license to change the terms of the contract itself. In the present case, the issue before us does not concern “the right of individual retirees to resolve disputes over contractual benefits directly with the former employer without the union’s involvement,” as the majority characterizes it. The issue before us concerns the right of an employer to instigate unilaterally a change of undisputed contractual benefits owed to all its retirees, to bypass the union in dealing directly with the retirees, and then to assert common law defenses of accord and satisfaction and estoppel based upon the retirees’ failure to reject the new benefits. I believe that to permit such defenses under these circumstances does violence to (1) the equal bargaining strength concept that is the foundation of collective bargaining between employer and employees, (2) the strong policy of honoring collective bargaining agreements and the union’s interest in seeing that collective bargaining contracts, once executed, are enforced according to their terms, and (3) the retirees’ interest in preserving vested pension benefits during the years when the old and the infirm depend heavily upon such benefits. Each of these concerns is grounded in national labor policies that greatly overshadow an employer’s interest in relying upon state law defenses of accord and satisfaction or estoppel to effectuate a modification of a collective bargaining agreement.
1.
The special protection afforded collective bargaining agreements is grounded in a basic principle of labor law:
National labor policy has been built on the premise that by pooling their economic strength and acting through a labor union freely chosen by the majority, the employees of an appropriate unit have the most effective means of bargaining *1496for improvements in wages, hours, and working conditions.
N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175,180, 87 S.Ct. 2001, 2006,18 L.Ed.2d 1123 (1967). It was by this very process of the active Yard-Man employees “pooling their economic strength” that they were able to bargain not only for their own wages, hours and working conditions but also for important economic concessions for their former fellow employees who reached retirement status. Although the employer was not required to negotiate those benefits for the retirees, Pittsburgh Plate Glass, supra, it nevertheless chose to do so and to make its obligations a part of the collective bargaining agreement, thereby avoiding a disruption of its business by a strike. The active employees, likewise, were not required to negotiate those benefits for the retirees, but they did so and undoubtedly at some economic sacrifice on their part. The concessions given by the employer and the benefits gained by the retirees were hammered out in the bargaining process and were the product of collective activity by labor — a federally recognized and protected activity.
The concept underlying Congressional labor policy is an attempt to place the employer and its employees in relatively equal positions of bargaining strength. The union used its collective strength in obtaining from the employer the benefits for retirees as a part of the contract negotiated by the union and the employer. The employer cannot now attempt to regain from the individual retirees what it gave up in the collective bargaining process.
I would hold that an employer seeking a modification of a collective bargaining agreement whereby it could distribute benefits different from those it had previously agreed to pay would be required to seek the union’s consent to such a modification. To hold otherwise and to permit the employer to completely bypass the union and go directly to individual beneficiaries to effect a change in the contract would pit the sophistication and power of an employer against the unorganized and less sophisticated individual retirees. As this Court itself observed in the Pittsburgh Plate Glass case,
[rjetired employees have no economic or bargaining power within this system. Their financial security derives from past economic power pragmatically and prudently exercised. Once retirement benefits have been bargained for, earned, and become payable, the employer may not recant on his contractual obligation to pay them.
Pittsburgh Plate Glass Co. v. N.L.R.B., 427 F.2d 936, 946 (6th Cir.1970), aff’d sub nom. Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971).
In my opinion, it would be a dilution of that “past economic power pragmatically and prudently exercised” and a destruction of the balanced power that is the keystone to collective bargaining to permit the employer to “recant on his contractual obligation,” do an “end run” around the union with which it bargained, and then claim accord and satisfaction as a result of its direct dealing with the retirees.
2.
Once Yard-Man executed the collective bargaining agreement, strong federal policy required that it adhere to its commitments, and Congress specifically placed jurisdiction in the federal courts to enforce those obligations. Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). It is Congressional policy that the administration of collective bargaining contracts be accomplished under a uniform body of federal substantive law. Smith v. Evening News Ass’n, 371 U.S. 195, 200, 83 S.Ct. 267, 270, 9 L.Ed.2d 246 (1962).
In the face of this fundamental policy that all collective bargaining contracts should be honored and enforced under a uniform body of federal law, I am at a loss to understand why this policy should be less important in cases concerning bargained for benefits for retirees than in cases concerning bargained for benefits for active employees. I simply cannot agree with the majority's statement that, “[wjhile the union may have bargained for and received *1497benefits for retirees, it does not have the same interest in the enforcement of those contractual rights on the behalf of individual retirees that it has in the terms and conditions of employment of active employees.” I find it difficult to believe that a union, having negotiated benefits for retirees, undoubtedly at the expense of the active employees, has any less interest in requiring the employer to fulfill its obligations to the retirees under the agreement than it has in requiring the employer to fulfill other obligations contained in the agreement. As the Supreme Court said in Pittsburgh Plate Glass,
[t]he Board stated that “the Union and current employees have a legitimate interest in assuring that negotiated retirement benefits are in fact paid and administered in accordance with the terms and intent of their contracts.” 177 N.L.R.B., at 815. That interest is undeniable.
404 U.S. at 176 n. 17, 92 S.Ct. at 396 n. 17.
In a very recent case in our own Circuit involving a union official responsible for assisting retirees, beneficiaries and surviving spouses with benefits under pension and insurance plans, this Court said,
[o]ne of the most sensitive functions performed by a union is the securing of benefits and the resolution of issues surrounding the rights to benefits. This is of particular concern to union officers since it provides one of the most visible means for the union to show that it is meeting the needs of its members.
Cehaich v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, 710 F.2d 234 at 239 (6th Cir.1983).
Not only does the union have “a legitimate interest in protecting the rights of the retirees,” but, as in the present case, when a union actually undertakes representation of the retirees some authority indicates that it has. a duty to protect their vested rights. See Toensing v. Brown, 528 F.2d 69, 70 (9th Cir.1975), in which the court said,
[i]f the union does undertake to represent retirees, its duty of fair representation requires that their vested retirement rights not be disturbed.
See also Nedd v. United Mine Workers of America, 556 F.2d 190, 200 (3d Cir.1977) (when union elects to enforce the employer’s obligations, duty of fair representation applies). An employer’s circumvention of the union and direct dealing with its retirees in an attempt to modify their contractual vested interests directly interferes with the legitimate interest of the union and its duty to the retirees it represented in the collective bargaining process.5 To condone this, in my opinion, would be a subversion of the concept of collective bargaining and a threat to stable management-labor relationships and the “industrial peace” that is the ultimate goal of federally protected collective activity. Vaca v. Sipes, 386 U.S. 171, 182, 87 S.Ct. 903, 912, 17 L.Ed.2d 842 (1967).
3.
When determining the rule of law that will best effectuate federal labor policies, the Court need not limit itself to considering only those policies that prompted passage of the Labor Management Relations Act, but should look also to other expressions of federal policy. The Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (ERISA), for example, is a strong expression of Congress’ concern that retirement benefits be protected. As the Ninth Circuit Court of Appeals stated, “[o]ne of the foremost concerns of Con*1498gress in enacting the Act was to assure workers that retirement benefits would be available when needed.” Connolly v. Pension Benefit Guaranty Corp., 581 F.2d 729 (9th Cir.1978). Congressional findings and declaration of policy are set forth in 29 U.S.C. § 1001(a), which provides as follows:
Congress finds that ... the continued well-being and security of millions of employees and their dependents are directly affected by [employee benefit] plans; that they are affected with a national public interest; that they have become an important factor affecting the stability of employment and the successful development of industrial relations.
It is undisputed that ERISA does not cover the Improved Plan at issue in this case. However, even though the Act does not cover this plan, the expressed policy considerations that prompted passage of the Act have application to non-ERISA retirement plans and should be considered in determining the rule that will best effectuate federal policy. I believe that the majority’s holding that under the circumstances present in this case an employer can assert the affirmative defense of accord and satisfaction is inconsistent with the Congressional concern for the protection of retirement benefits.
C.
I would hold that when an employer initiates a modification of its retirees’ vested benefits without the approval of the union that negotiated those benefits and without the express approval of the retirees themselves, the employer, as a matter of federal substantive law, cannot later raise accord and satisfaction or estoppel as defenses in an action to enforce the employer’s obligations under the collective bargaining agreement. To hold otherwise is contrary, in my opinion, to the Supreme Court’s charge that in § 301 actions courts are to utilize state law only if it is “the rule that will best effectuate the federal policy.” Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 457, 77 S.Ct. 912, 918, 1 L.Ed.2d 972 (1972).
Such a holding in this case would not preclude the adoption into federal substantive law of the principle of accord and satisfaction in an appropriate § 301 action. For example, the result reached in Keppard v. International Harvester Co., 581 F.2d 764 (9th Cir.1978) (a case cited by the majority in support of its position), in which the Ninth Circuit Court of Appeals upheld an employer’s reliance on the California law of accord and satisfaction, would not necessarily be different under the rule of law that I suggest today. In that case the employee asked his union to press a claim for back wages. The union and the employer eventually settled the claim and the employer tendered to the employee a check for the agreed upon amount. The employee, knowing that the company considered the check a full settlement of his back pay claim, accepted and cashed the check. The district court held, and the court of appeals agreed, that the employee’s action completed an accord and satisfaction under California law. International Harvester, therefore, involved an individual employee dispute under a collective bargaining agreement in which the employee was represented by the union, a settlement of that dispute by the employer and the union with the recommendation of the union that the employee accept the settlement check, and an awareness by the employee that the check he received was in settlement of the dispute. This type of case is a far cry from one in which the employer decides to change the benefits due an entire class of beneficiaries under the collective bargaining agreement, intentionally bypasses the union representing those beneficiaries, arbitrarily sends the beneficiaries something other than required by its contract with the union, and then relies upon their silence in asserting common law defenses of accord and satisfaction or estoppel.
VI.
While retirees, as a matter of statutory language and legislative history, do not have the protection of the unfair labor practice statutes against an employer desiring to change their benefits, they do have the protection of federal substantive law as fashioned by the federal courts in a manner consistent with national labor policies. As
*1499the Supreme Court recently reaffirmed, quoting former Justice Goldberg in Humphrey v. Moore, 375 U.S. 335, 358, 84 S.Ct. 363, 376, 11 L.Ed.2d 370 (1964),
[i]t is of the utmost importance that the law reflect the realities of industrial life and the nature of the collective bargaining process. We should not assume that doctrines evolved in other contexts will be equally well-adapted to the collective bargaining process.
Del Costello v. International Brotherhood of Teamsters, - U.S. - at -, 103 S.Ct. 2281 at 2294, 76 L.Ed.2d 476 (1983).
Under the circumstances of this case, doctrines of accord and satisfaction and estoppel, developed in other contexts, should not enable an employer to bypass the union with which it dealt in the collective bargaining process and to modify vested pension benefits in reliance upon silent acquiescence of retirees who were presented not with an option but with an accomplished fact.
For the reasons set forth above, I respectfully dissent from Part II of the majority opinion.

. Affirmative defense Number 7 asserted estoppel, but not as Yard-Man now asserts it: “plaintiffs are estopped from bringing this action because they failed to file timely grievanees under the labor contract and are further barred by the doctrine of laches and/or the applicable statutes of limitations.”

. Yard-Man’s arguments in the trial court that it had substantially performed its obligation or that complete performance of its obligation was impossible do not constitute an assertion of the affirmative defenses of accord and satisfaction or estoppel. Yard-Man’s arguments were simply that its conduct in sending the retirees cash payments constituted sufficient performance of its contractual duty and did not raise any issue regarding Yard-Man’s intention that these payments were to be in settlement of a disputed claim or that the beneficiaries in accepting those payments intended to do so as a settlement of a disputed claim. Yard-Man’s arguments concerned only the sufficiency of defendant’s conduct and were based upon different factual and legal considerations than those relevant to the defenses of accord and satisfaction or estoppel, which involve alleged conduct on the part of the plaintiffs. YardMan’s arguments of performance could properly be made under its general denial of a breach of the agreement. Any defense based upon the beneficiaries’ alleged conduct in acceptance of the cash payments, however, would avoid the question of performance and seek to escape liability on other grounds. As matters of avoidance and affirmative defenses, therefore, accord and satisfaction and estoppel were required to be set forth in defendant’s pleadings, Fed.R.Civ.P. 8(c), and cannot be raised for the first time after a judgment has been rendered in favor of the plaintiff. Cf. Marx & Co., Inc. v. Diners’ Club, Inc., 550 F.2d 505, 512 (2d Cir. 1977).

. I do not deem it “of paramount significance,” as the majority suggests, that the words “accord and satisfaction” were never utilized before the District Court, although it does seem to me that if Yard-Man truly intended to raise that well recognized defense in the trial court it would have referred to it by its name at some point somewhere in its briefs or in its oral argument to the trial Judge. Nor do I deem the failure of Yard-Man to amend its answer to assert this affirmative defense to be in and of itself dispositive of the question whether it can now raise that defense, although, again, it seems to me that if Yard-Man truly intended to raise that defense in the trial court it would have taken the simple step of seeking leave of the District Court to amend its Answer. Instead, I base my conclusion that Yard-Man is now foreclosed from asserting this defense on the fact that the record simply does not show any attempt by Yard-Man — until it reached the appellate court — to rely upon this defense, to argue its applicability, to cite authority in support of the defense or to otherwise, in some manner, let the trial Judge know that it was being raised and presented to him for decision. I do not regard the few words in a single sentence in a brief, “a reasonable alternative form of compliance was adopted,” as presenting to the trial court a defense of accord and satisfaction or substituted performance. Those few words appeared in the context of YardMan’s argument that it was impossible to perform the contract as written and that the alternative chosen by Yard-Man constituted substantial performance of a contract, a defense considered and rejected by the District Court.

. In such a case it is possible that the doctrines of accord and satisfaction and estoppel may be asserted as defenses to the individual’s lawsuit. Cf. Keppard v. international Harvester Co., 581 F.2d 764 (9th Cir.1978), cited by the majority in footnote 12 and discussed infra in this dissenting opinion.

. I do not mean to imply that a union is always under some general duty to fairly represent all of the employer’s retirees. I suggest only that where, as in the present case, a union has actually undertaken to represent the retirees in a § 301 action to enforce their contractual rights against the employer, a duty of fair representation arises. Inasmuch as the conduct of the union in this regard is not an issue in this case, I fully agree with the majority that any issue of fair representation is “not squarely presented” by the facts of the present case (p. 1486 n. 15). What is presented, however, is the question of whether the employer’s deliberate attempt to bypass the union — the plaintiff in this case — interferes with the union’s right to prosecute the action on behalf of the retirees as well as the union’s assumed responsibilities to those retirees as their representative in this litigation. In my opinion, it does.