UAW v. ArvinMeritor Inc ( 2008 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0447p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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X
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ROBERT COLE, JOHN ADAMS, and RICHARD
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LANTER, on behalf of themselves and a
similarly situated class; and INTERNATIONAL -
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No. 06-2224
UNION, UNITED AUTOMOBILE, AEROSPACE
,
>
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AND AGRICULTURAL IMPLEMENT WORKERS
Plaintiffs-Appellees, -
OF AMERICA,
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v.
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ARVINMERITOR, INC., ROCKWELL
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AUTOMATION, INC., and ROCKWELL
INTERNATIONAL CORPORATION, -
Defendants - Appellants. -
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_________________________________
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BERNARD FAUST, LOIS LAST, DAVID
REAMER, and CHARLES SCHMIDT, on behalf -
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of themselves and a similarly situated class;
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and INTERNATIONAL UNION, UNITED
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AUTOMOBILE, AEROSPACE AND
AGRICULTURAL IMPLEMENT WORKERS OF -
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Plaintiffs-Appellees, -
AMERICA,
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-
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v.
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ARVINMERITOR, INC., ROCKWELL
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AUTOMATION, INC., and ROCKWELL
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INTERNATIONAL CORPORATION,
Defendants - Appellants. -
N
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
Nos. 03-73872; 04-73656—Nancy G. Edmunds, District Judge.
Argued: October 28, 2008
Decided and Filed: December 16, 2008
1
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 2
*
Before: MARTIN and GILMAN, Circuit Judges; DOWD, District Judge.
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COUNSEL
ARGUED: Michael A. Alaimo, MILLER, CANFIELD, PADDOCK & STONE,
Detroit, Michigan, for Appellants. Stuart M. Israel, MARTENS, ICE, KLASS,
LEGGHIO & ISRAEL, Royal Oak, Michigan, for Appellees. ON BRIEF: Michael A.
Alaimo, MILLER, CANFIELD, PADDOCK & STONE, Detroit, Michigan, Charles S.
Mishkind, MILLER, CANFIELD, PADDOCK & STONE, Grand Rapids, Michigan, for
Appellants. Stuart M. Israel, MARTENS, ICE, KLASS, LEGGHIO & ISRAEL, Royal
Oak, Michigan, Carlos F. Bermudez, Michael F. Saggau, ASSOCIATE GENERAL
COUNSEL, INTERNATIONAL UNION, UAW, Detroit, Michigan, for Appellees.
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OPINION
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RONALD LEE GILMAN, Circuit Judge. This is an action by retired employees
and their union against Rockwell International Corporation and its successor companies.
The plaintiffs sued the defendants under § 301 of the Labor Management Relations Act
(LMRA) and the Employee Retirement Income Security Act (ERISA) to enforce what
they contend was a promise by the defendants in the applicable collective bargaining
agreements (CBAs) to provided retirees and their surviving spouses with lifetime
healthcare benefits. Finding that the CBAs contained such enforceable promises, the
district court granted summary judgment to the plaintiffs. For the reasons set forth
below, we AFFIRM the judgment of the district court.
*
The Honorable David D. Dowd, Jr., Senior United States District Judge for the Northern District
of Ohio, sitting by designation.
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 3
I. BACKGROUND
A. Factual background
Rockwell International Corporation, a diversified manufacturer that supplied
parts to the automotive industry, owned industrial plants throughout the United States.
In 1997, Rockwell spun off its automotive division, which became Meritor Automotive,
Inc. Meritor merged with Arvin Industries, Inc. in 2000, forming ArvinMeritor, Inc.
ArvinMeritor manufactures automotive integration systems, modules, and components
for manufacturers of passenger vehicles, commercial trucks, trailers, and original
equipment. Between the late 1970s and 2003, either Rockwell or ArvinMeritor closed
the twelve plants at issue in this litigation, which were located in Illinois, Indiana,
Kentucky, Michigan, Ohio, and Wisconsin.
All of the hourly employees at the closed plants were represented by the United
Automobile, Aerospace, and Agricultural Implement Workers of America (the UAW).
Rockwell/ArvinMeritor and the UAW have engaged in collective bargaining for
decades, producing a succession of CBAs. The CBAs typically covered a three-year
period and followed a consistent format, including a master agreement (the National
Agreement) and several supplemental agreements addressing different topics that were
expressly incorporated into the National Agreement. For example, the Supplemental
Insurance Agreement (always Exhibit B) and its accompanying Insurance Program
(always Exhibit B-1) addressed the health insurance coverage at issue in this case.
Company-paid retiree healthcare benefits were established in 1962, with Rockwell
paying half the cost. In the 1965 CBA, Rockwell agreed to pay the full cost of retiree
healthcare benefits. The core benefits language at issue in this case first appeared in the
1968 CBA and continued in the 1971, 1974, 1977, 1980, 1982, 1985, 1988, 1991, 1994,
1997, and 2000 CBAs. Over those years, benefits improved in various ways, but the
core language regarding retiree healthcare coverage remained essentially unchanged.
See Cole v. ArvinMeritor, Inc., 515 F. Supp. 2d 791, 795 (E.D. Mich. 2006) (summary
judgment order).
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 4
In 1991, Rockwell began to require that retirees participate in a mandatory mail-
order and generic-drug program. But this change did not fundamentally alter benefits;
it simply changed the mechanism for buying drugs and actually resulted in a savings to
retirees. See Cole v. ArvinMeritor, Inc., 516 F. Supp. 2d 850, 873 (E.D. Mich. 2005)
(preliminary injunction order).
The UAW agreed to a change in benefits in 2000 that adversely affected
employees who retired from the Oshkosh plant before 2001. As a result, affected
employees’ copayments for generic drugs went from $3 to $5, while their copayment for
brand-name drugs more than doubled—from $3 to $7.
In 2001, ArvinMeritor unilaterally froze Medicare Part B premium
reimbursements at 1999 levels for closed-plant retirees age 65 or older. The practical
impact of this change for retirees was an increase of hundreds of dollars per year in the
net amount of their Medicare premiums. Later, in 2003, ArvinMeritor unilaterally
eliminated dental, vision, and hearing-aid coverages for retirees. It also increased
deductibles, copays, and out-of-pocket maximums. Finally, ArvinMeritor announced
plans in 2005 to eliminate all healthcare benefits as of the next year for all retirees,
dependents, and surviving spouses age 65 or older.
B. Procedural background
In April 2003, the UAW brought suit against ArvinMeritor and Rockwell in the
United States District Court for the Eastern District of Michigan. It asserted claims
under § 301 of the LMRA, 29 U.S.C. § 185, and § 501(a)(1)(B) of ERISA, 29 U.S.C.
§ 1132(a)(1)(B). Later, the UAW amended its complaint to add Robert Cole, John
Adams, and Richard Lanter, retirees from Rockwell plants in Ashtabula, Ohio, Detroit,
Michigan, and Winchester, Kentucky respectively, as representatives for a class of
similarly situated retirees (and surviving spouses) from eleven different plants. The
lawsuit was based on ArvinMeritor’s unilateral reduction of benefits and increase in out-
of-pocket expenses for retirees in 2003.
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 5
In September 2004, the UAW, along with class representatives Bernard Faust,
Lois Last, David Reamer, and Charles Schmidt, filed a substantially identical lawsuit in
the Eastern District of Michigan on behalf of retirees and surviving spouses from
Rockwell’s plant in Oshkosh, Wisconsin. That case was consolidated with the Cole case
in October 2005. The district court eventually certified a class of approximately 2,900
UAW-represented retirees (along with spouses and eligible dependents) from the
defendants’ plants in Illinois, Indiana, Kentucky, Michigan, Ohio, and Wisconsin who
currently or formerly received retiree healthcare benefits from the defendants.
While the lawsuit was proceeding, ArvinMeritor made the announcement in 2005
that it was eliminating all healthcare benefits for retirees age 65 or older. This caused
the plaintiffs to file a motion for a preliminary injunction to force ArvinMeritor to
continue providing those benefits. After an evidentiary hearing, the district court granted
the preliminary injunction. Cole, 516 F. Supp. 2d at 880. The court found that “the
contracting parties’ intention to provide lifetime retiree health coverage” was expressed
in the “explicit language” of the CBAs. Id. at 866, 876. According to the district court,
this intention was confirmed by: (1) contractual context; (2) written “lifetime”
assurances to employees, retirees, and surviving spouses by multiple company officials;
(3) decades of booklets and summary plan descriptions (SPDs) promising that healthcare
benefits “will be continued during retirement” for both retirees and eligible dependents;
(4) numerous explicit oral assurances of “lifetime” coverage made by company officials
in various plants over the decades; (5) the early expression of the intent for benefits to
continue “for life” in the 1971 Rockwell benefits book; and (6) the retiree insurance
cards issued in 1972, 1973, and 1982; and (7) the testimony and declarations of
witnesses demonstrating that the negotiated security of lifetime pension and healthcare
benefits was widely known, understood, and communicated for decades among union-
represented employees, supervisory employees, and company and union officials who
negotiated the CBAs and the plant-closing agreements. Id. at 866-67.
The district court also applied a series of precedents that it referred to as the
Golden-Meridian decisions. These are Sixth Circuit and Eastern District of Michigan
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 6
cases that the court characterized as “mirror images of the instant case,” some addressing
the actual UAW-Rockwell CBAs at issue, some addressing “virtually identical” CBA
language, and some addressing “similar” language. All of the decisions enforced
promises of lifetime retiree healthcare benefits. See Cole, 516 F. Supp. 2d at 865.
Following the entry of the preliminary injunction, each side moved for summary
judgment, with the defendants essentially repeating the arguments they had made at the
preliminary-injunction stage. The district court granted the plaintiffs’ motion, denied
the defendants’ motion, and permanently enjoined the defendants from altering or
canceling retiree healthcare benefits. Cole, 515 F. Supp. at 794. Quoting the language
of the CBA, the court concluded:
This language, tying pension status to retiree health benefits—and
providing that the health benefits “at the time of retirement . . . shall be
continued thereafter” for retirees and “any eligible
dependants”—constitutes an enforceable contractual promise of lifetime
retiree health benefits to accompany lifetime pension benefits . . . .
The Court thus interprets the relevant CBAs as unambiguously promising
health benefits for each retiree’s lifetime and for the lifetimes of each
retiree’s eligible dependents and surviving spouses.
Id. at 800-01.
The court found that the lifetime promises were confirmed by the following:
(1) the “virtually identical” Golden-Meridian precedents,
(2) the contractual context, including
(a) cost-controlling caps on retiree healthcare benefits extending
“well beyond” the expiration of the CBAs, and
(b) duration limits on healthcare benefits for those laid-off or on
leave, in contrast to no duration limits on retiree healthcare
benefits,
(3) the “substantial evidence of written assurances of lifetime healthcare
benefits,” including
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 7
(a) “lifetime” letters sent between 1988 and 2001,
(b) “for life” prescription cards issued between 1972 and 1984,
(c) the 1971 Rockwell “for life” healthcare benefits booklet, and
(d) company booklets and SPDs issued between 1968 and 2000,
which assured that health benefits “will be continued during
your retirement for yourself and for your eligible
dependents,” and
(4) “oral ‘lifetime’ assurances” made over four decades by company
officials.
Id. at 798-807. In conclusion, the court noted that “[e]ven if the Court had found the
contract language ambiguous, the extrinsic evidence supports the conclusion that the
parties intended that retiree health benefits were vested for life.” Id. at 809.
Upon the defendants’ request, the district court later vacated the summary
judgment order and issued a replacement order that was nearly identical except that it
reserved a determination of the details of the permanent injunctive relief for later
proceedings. The defendants then timely appealed to this court.
II. ANALYSIS
A. Vesting of healthcare-benefit plans
There are two types of employee benefit plans: pension plans and welfare-
benefit 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 welfare-
benefit 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.
B. Terms of the CBA
We must first assess the “explicit language” of the CBAs and apply “basic
principles of contract interpretation.” Yard-Man, 716 F.2d at 1479. Accordingly, we
will address the district court’s conclusion that the language of the Insurance Program
specifically provides for vested lifetime retiree healthcare benefits. In our review of the
language at issue, we note that the numbering of various sections of the CBAs changed
over the years, but that the substance of the text remained unchanged. The district court,
for example, refers to § 8 of the Insurance Agreement, discussed in detail below, as § 10,
based on the numbering in the 1991 CBA. We will instead reference the numbering used
in the 1968 CBA, where the language at issue in this case first appeared.
1. The “shall be continued” language of the Insurance Program
The cornerstone of the district court’s preliminary-injunction and summary-
judgment decisions was its finding that language from Article III of the Insurance
Program—a document incorporated into the CBAs—explicitly provides for lifetime
retiree healthcare benefits. Article III is titled “Health Care Benefits.” The fifth section
of that article is titled “Continuance of Health Care Coverages Upon Retirement or
Termination of Employment at Age 65 or Older.” Section 5(a) addresses, among other
things, the “continuance” of healthcare coverage for both pension-eligible and
nonpension-eligible retirees. It provides in pertinent part:
The Health Care . . . Coverages an employee has under this Article at the
time of retirement or termination of employment at age 65 or older . . .
shall be continued thereafter provided that suitable arrangements can
be made with the Carrier(s). Contributions for coverages so continued
shall be in accordance with Article I, Section 3(b)(6).
(emphasis added). This language, the district court concluded, “unambiguously
promises lifetime health benefits.” Cole, 515 F. Supp. 2d at 799.
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 10
There is substantial precedential support for the district court’s conclusion in the
form of the Golden-Meridian line of cases, which it called “mirror images of the instant
case.” Cole, 516 F. Supp. 2d at 867. The Golden-Meridian precedents are composed
of: (1) McCoy v. Meridian Auto. Sys., Inc., No. 03-74613, 2004 U.S. Dist. LEXIS 29219
(E.D. Mich. Feb. 6, 2004) (O’Meara, J.) (granting a preliminary injunction for retirees
based on the 1991-1994 Rockwell-UAW CBA); (2) McCoy v. Meridian Auto. Sys., Inc.,
390 F.3d 417 (6th Cir. 2004) (upholding Judge O’Meara’s preliminary injunction);
(3) McCoy v. Meridian Auto. Sys., No. 03-74613, 2005 U.S. Dist. LEXIS 40129 (E.D.
Mich. Feb. 28, 2005) (O'Meara, J.) (granting summary judgment for retirees based on
the 1991-1994 Rockwell-UAW CBA); (4) Golden v. Kelsey-Hayes Co., 845 F. Supp.
410 (E.D. Mich. 1994) (Gadola, J.) (granting a preliminary injunction for retirees based
on language “virtually identical” to that in the 1991-1994 UAW-Rockwell CBA);
(5) Golden v. Kelsey-Hayes Co., 73 F.3d 648 (6th Cir. 1996) (affirming Judge Gadola’s
decision to grant a preliminary injunction); and (6) Golden v. Kelsey-Hayes Co., 954 F.
Supp. 1173 (E.D. Mich. 1997) (Gadola J.) (granting summary judgment for retirees).
Based on the Golden-Meridian precedents, which addressed either the same
CBAs at issue here, or “virtually identical” language from other CBAs, the district court
concluded that the “shall be continued thereafter” language from the Insurance Program
created an enforceable promise of lifetime benefits. But because none of the decisions
in the Golden-Meridian line of cases addressed the effect of the durational limitation
imposed by § 8 of the Insurance Agreement, we will examine below the potential
limiting effect of that provision.
2. Section 8 durational limitation
The defendants have argued at every stage of this litigation that § 8 of the
Insurance Agreement expressly limits retiree insurance coverage to the duration of the
CBA. Section 8 provides as follows:
This [Insurance] Agreement and [Insurance] Program as modified and
supplemented by the [Insurance] Agreement shall continue in effect until
the termination of the Collective Bargaining Agreement of which this is
a part.
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 11
Ins. Agreement at § 8. The district court rejected the defendants’ arguments regarding
that section, characterizing § 8 as only a general durational clause. Cole, 515 F. Supp.
2d at 802. In doing so, it noted the rule in this circuit that general durational clauses
cannot trump contractual promises of lifetime retiree healthcare benefits. Id. “[G]eneral
durational provisions only refer to the length of the CBAs and not the period of time
contemplated for retiree benefits. Absent 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 580-81 (citations and internal quotation
marks omitted). The Yolton court interpreted similar “concurrent language” in the CBA
at issue in that case as doing
nothing to those employees who have already retired under the plan. The
durational language only affects future retirees—that is, someone who
retired after the expiration of a particular CBA would not be entitled to
the previous benefits, but is rather entitled only to those benefits newly
negotiated under a new CBA. Thus, the retirement package available to
someone contemplating retirement will change with the expiration and
adoption of CBAs, but someone already retired under a particular CBA
continues to receive the benefits provided therein despite the expiration
of the agreement itself.
Id. at 581 (second emphasis added).
The district court also relied on contextual clues from other portions of the CBAs
in support of its conclusion. To start with, the court noted that the Insurance Program
differentiates between active employees, inactive employees, and retirees/surviving
spouses with regard to the continuation of healthcare benefits. Cole, 515 F. Supp. 2d at
803. For example, employees in “active service” are entitled to continued company-paid
healthcare benefits for “any month in which the employee has earnings from the
company.” Id.; Ins. Program, Art. I, § 3(a)(1). Laid-off employees eligible for
supplemental wage payments are entitled to continued healthcare benefits under a
schedule, determined by seniority, for up to 24 months after they become inactive. Id.;
Ins. Program, Art. I, § 3(a)(3). In contrast, retiree healthcare benefits are not subject to
any durational limits. They begin “at the time of retirement” and “shall be continued
thereafter.” Id. at Art. III, § 5(a).
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 12
The district court reasoned that the differential treatment of employees by
classification illustrates that Rockwell clearly knew how to set specific time limits on
the continuation of healthcare benefits, and that it did so for certain classes of
employees. That it set no such limits for retirees and surviving spouses indicated to the
district court that Rockwell never intended for there to be any time limitations on those
benefits. Cole, 515 F. Supp. 2d at 803.
The district court also stressed the fact that the Pension Plan—which the
defendants admit is vested—and the Insurance Program have similar durational clauses.
It reasoned that “virtually identical” durational language would not have been used if the
language was intended to have one meaning as to healthcare benefits and another as to
pension benefits. Quoting Yolton, 453 F.3d at 581, the district court observed that
“[r]eviewing each provision in question as part of the integrated whole, the use of
singular language . . . provides substantial support for the plaintiffs’[] position.” Cole,
515 F. Supp. 2d at 803 (citation and internal punctuation marks omitted).
The defendants raise several arguments that challenge the district court’s
reasoning. Their main contention is that § 8 cannot be regarded as simply a “general”
durational provision because it refers to retiree benefits and expressly limits their
duration to the contract term; in other words, it does not “only refer to the length of the
CBAs.” See Yolton, 435 F.3d at 580. They note that this court in Yard-Man held that
the phrase “‘savings and pension plan programs’ continue only for the duration of the
collective bargaining agreement” constituted a specific durational limitation on benefits.
See Yard-Man, 716 F.2d at 1481-82. The defendants also cite two other cases in which
the Sixth Circuit enforced very similar specific durational clauses: UAW v. Cleveland
Gear Corp., No. C83-947, 1983 WL 2174 (N.D. Ohio Oct. 20, 1983), aff’d, No.
83-3839, 1984 U.S. App. LEXIS 13700 (6th Cir. Oct. 24, 1984), and Bittinger v.
Tecumseh Prods. Co., 83 F. Supp. 2d 851 (E.D. Mich. 1998), aff’d, 201 F.3d 440 (6th
Cir. 1999).
In Cleveland Gear, a clause in the master contract stated:
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 13
The Insurance Agreement and Insurance Plan, as revised, shall be
effective as provided therein and shall remain in full force and effect
during the term of this [CBA].
1983 WL 2174, at *2. The district court in Cleveland Gear concluded that the above
clause clearly demonstrated an intent to limit retiree insurance coverage to the contract
term, id., and the Sixth Circuit affirmed based on that reasoning. 1984 U.S. App. LEXIS
13700, at *2-3.
In Bittinger, the term limitation provision stated:
The Company has established an Insurance Plan for employees covered
by the Agreement and this Plan shall remain in effect for the duration of
the Labor Agreement without costs to said employees.
83 F. Supp. 2d at 858. The district court in Bittinger found, and this court agreed, that
the provision in question “unambiguously express[ed] defendants’ intent that the
duration of [their] obligation to provide fully funded benefits is coextensive with the
CBA.” Id. at 861.
Citing Yolton, the district court below distinguished Cleveland Gear and
Bittinger on the ground that the agreements in those cases did not contain tie-ins to
pension benefits, as do the Rockwell-UAW CBAs. Cole, 515 F. Supp. 2d at 803-04.
This explanation is reasonable, but not irrefutable. For one thing, the Cleveland Gear
court did not describe the contents of either the insurance agreement or the insurance
plan at issue in that case. We therefore do not know whether the benefit documentation
in Cleveland Gear had pension tie-in language or not.
More importantly, the record is less than clear that the Rockwell-UAW CBAs do
tie retiree healthcare benefits to pension status. Both the Insurance Agreement and
Insurance Program contain language expressly stating that insurance benefits are also
available to retirees who are ineligible for pension benefits. See Ins. Agreement, Art. I,
§ 3(b)(6)(ii) (providing that insurance coverages are available to certain retirees who are
ineligible for pension benefits); Ins. Program, Art. III, § 6(a) (“Hospital and Medical
Expense Coverages . . . an employee has under this Article at the time of retirement or
termination of employment at age 65 or older for any reason other than a discharge for
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 14
cause with insufficient service to entitle him to the benefit under . . . [the] Pension Plan,
shall be continued thereafter.”) (emphasis added).
Finally, the defendants assert that the district court’s conclusion that the
durational clause was general in nature ignores the fact that the National Agreement
already had a general durational limitation (at Article XVIII), and that the parties would
have had no need to negotiate a redundant general durational clause in the Insurance
Agreement. An interpretation of the CBA in which one general durational clause is
redundant with another would run afoul of Yard-Man’s adminition that CBAs must be
interpreted in such a way that gives full effect to all provisions and “render[s] none
nugatory.” Yard-Man, 716 F.3d at 1480. The district court did not discuss this apparent
redundancy.
Despite the plausibility of several of the defendants’ arguments regarding § 8,
we are bound to apply the analysis recently employed by this court in Yolton and Noe.
The district court in Noe had concluded that two durational limitations in the benefits
agreements that were incorporated into the CBAs (similar to the Insurance Agreement
and Insurance Program here) expressed an intent not to vest retirement benefits.
3:06-CV-170H, 2006 U.S. Dist. LEXIS 92098, at **12-13 (W.D. Ky. Dec. 19, 2006).
One of the clauses in question, § 12.1, provided that medical benefits would continue
“for the duration of this Agreement.” Id. at *12. The other provision, § 16.4, related
to benefits and provided that “[u]pon termination, this Agreement shall terminate in all
respects except that the benefits provided by it shall be extended for ninety (90) days
following such termination.” Id. at **12-13. Worth noting is that the durational
provisions in Noe referred even more specifically to healthcare benefits than does § 8 in
this case. Id.
This court reversed the district court, relying on language from Yolton in holding
that “‘absent specific durational language referring to retiree benefits themselves[,]’ a
general durational clause says nothing about the vesting of retiree benefits.” Noe, 520
F.3d at 555 (quoting Yolton, 435 F.3d at 581). Examining § 12.1 of the Insurance
Agreement in Noe, this court found it “indistinguishable from the language we held to
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 15
be a general durational provision” in the unpublished case of International Union,
United Automobile, Aerospace & Agricultural Implement Workers of America v. Loral
Corp, Nos. 95-3710, 95-3711, 1997 U.S. App. LEXIS 2118, at * 3 (6th Cir. 1997).
The Noe court also cited International Union, United Automobile, Aerospace &
Agricultural Implement Workers of America v. BVR Liquidating, Inc., 190 F.3d 768 (6th
Cir. 1999), in support of its conclusion. This court in BVR Liquidating held that retiree
healthcare benefits vested notwithstanding an introductory clause stating that benefits
would be provided “at no cost to the Employees or retirees for the term of this
Agreement . . . .” Id. at 774. Likewise—and of particular relevance here—the Noe court
found that §§ 12.1 and 16.4 were not specific limitations because they referred to “all
benefits available to all employees, active and retired,” but did not single out retiree
benefits. Noe, 520 F.3d at 557.
A recent district court analyzing durational language in a CBA very similar to
that in § 8 also found that the durational provision was general in nature and did not limit
retirement benefits to the length of the CBA. See Rose v. Volvo Constr. Equip. N. Am.,
Inc., 542 F. Supp. 2d 751, 763 (N.D. Ohio 2008). The court gave two reasons for its
conclusion: (1) that the durational language did not specifically reference retiree
healthcare benefits, and thus did not satisfy the test in Yolton; and (2) that the pension-
plan portion of the CBA, which the defendant admitted was vested for life, was nearly
identical to the provision for insurance benefits, and there was no logical basis to
attribute different meanings to the two provisions. Id. at 764-66.
The defendants have failed to distinguish Noe and the other cited cases analyzing
similar durational clauses, other than to contend that those cases were wrongly decided.
Indeed, there is a reasonable argument to be made that, while this court has repeatedly
cautioned that Yard-Man does not create a presumption of vesting, we have gone on to
apply just such a presumption. See Noe, 520 F.3d at 567-68 (Sutton, J., dissenting). In
any event, Yolton requires that a durational limitation must include a specific mention
of retiree benefits in order to apply to such benefits. Section 8 of the Rockwell/UAW
Insurance Agreement simply does not include such a specific mention. Moreover,
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 16
because Noe, BVR Liquidating, and other cases have found durational limitations even
more specific than § 8 to constitute only general limitations, then we are bound to find
that § 8 is a general limitation that does not limit retiree healthcare benefits to the length
of the CBA. See Salmi v. Sec’y of Health & Human Servs., 774 F.2d 685, 689 (6th Cir.
1985) (“A panel of this Court cannot overrule the decision of another panel.”).
C. The defendants’ rule of construction/North Bend Terminal argument
The defendants alternatively argue that, even if the durational clause in § 8 of the
Insurance Agreement is not found to be determinative, there is a conflict between § 8
and the “shall be continued thereafter” language from the Insurance Program upon which
the district court based its decision. They note that § 1 of the Insurance Agreement
provides that, in the event of a conflict between it and the Insurance Program, the
Insurance Agreement controls “to the extent necessary to eliminate such conflict.” The
district court did not address this argument, presumably because the argument is simply
a repackaging of the defendants’ position regarding § 8 in slightly different terms.
Neither of the cases cited in support by the defendants arose in the same context as this
case. See UAW v. Textron, Inc., 359 F.2d 966 (6th Cir. 1966) (interpreting conflicting
language within the CBA over the termination of pension benefits where both sides
indicated an intent to terminate the agreement); Haytcher v. ABS Indus., Inc., 889 F.2d
64 (6th Cir. 1985) (construing conflicting CBA language in a dispute over the funding
of pension benefits). As noted in Part II.B.2. above, Yolton applies directly to this case
and controls the outcome of the § 8 issue.
Finally, the defendants argue that there was no “meeting of the minds” on retiree
healthcare benefits, and that United Steelworkers of America v. North Bend Terminal
Co., 752 F.2d 256 (6th Cir. 1985), dictates that the plaintiffs must accordingly lose. This
argument seems far-fetched, at best. In North Bend Terminal, the CBA required the
employer to contribute to a pension plan, but was silent on the issue of its liability to
fully fund the plan. Id. at 260. This court declined to impose an obligation on the
employer to continue funding the pension plan after the facility closed because the
parties likely never considered the impact of a closing on the employer’s funding
No. 06-2224 Cole et al. v. ArvinMeritor, Inc. et al. Page 17
obligation. Id. We agree with the district court’s evaluation of the defendants’ North
Bend Terminal argument:
North Bend is easily distinguished. Here, unlike the facts in North Bend,
the parties expressed their intent in unambiguous contract language. Even
if the Court had found the contract language ambiguous, the extrinsic
evidence supports the conclusion that the parties intended that retiree
health benefits were vested for life.
Cole, 515 F. Supp. 2d at 809.
D. Extrinsic evidence
Because this court’s precedents under the Golden-Meridian line of cases, along
with Yolton, Noe, and other similar decisions, hold that the language of the CBAs creates
an unambiguous promise for lifetime healthcare benefits, we need not consider extrinsic
evidence of the parties’ intentions. But we note that such evidence, had we considered
it, weighs heavily in the favor of the plaintiffs and indicates the defendants’ intention to
provide lifetime retiree healthcare benefits.
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the judgment of the district
court.