505 F.3d 437 (6th Cir. 2007), 06-4393, Prater v. Ohio Educ. Assn.

Docket Nº:06-4393.
Citation:505 F.3d 437
Party Name:James I. PRATER et al., Plaintiffs-Appellants, v. OHIO EDUCATION ASSOCIATION, Defendant-Appellee.
Case Date:October 03, 2007
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 437

505 F.3d 437 (6th Cir. 2007)

James I. PRATER et al., Plaintiffs-Appellants,



No. 06-4393.

United States Court of Appeals, Sixth Circuit

October 3, 2007

Argued: Sept. 13, 2007.

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 04-01077-Edmund A. Sargus, Jr., District Judge.

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David M. Cook, Cook, Portune & Logothetis, Cincinnati, Ohio, for Appellants.

Rodger L. Eckelberry, Baker & Hostetler, Columbus, Ohio, for Appellee.


David M. Cook, Robert E. Rickey, Stephen A. Simon, Cook, Portune

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& Logothetis, Cincinnati, Ohio, for Appellant.

Rodger L. Eckelberry, Manuel Jose Asensio III, Baker & Hostetler, Columbus, Ohio, for Appellee. Michael F. Saggau, Daniel W. Sherrick, Associate General Counsel, Detroit, Michigan, Lisa M. Smith, Samuel C. McKnight, Klimist, McKnight, Sale, McClow & Canzano, Southfield, Michigan, for Amici Curiae.

Before: SUTTON and McKEAGUE, Circuit Judges; FORESTER, District Judge. [*]


SUTTON, Circuit Judge.

James Prater and several other retired employees of the Ohio Education Association ("OEA") claim that OEA improperly terminated their health benefits, which (they say) had become vested and irreducible through a series of collective bargaining agreements. Relying in part on our decision in Maurer v. Joy Technologies, Inc., 212 F.3d 907 (6th Cir. 2000), the district court rejected the claims as a matter of law. Because we conclude that Maurer does not apply here, because after-the-fact unilateral summary plan descriptions cannot supercede the amendment provisions in a collective bargaining agreement and because the contracts are otherwise ambiguous about whether they promise lifetime, irreducible health benefits to employees upon their retirement, we reverse.


In its capacity as a union, OEA represents teaching professionals throughout Ohio. Unions are employers too, however, and, in its capacity as an employer, OEA employs numerous individuals who are represented by two other unions: the Professional Staff Union ("PSU") and the Ohio Associate Staff Union ("OASU"). OEA has negotiated several collective bargaining agreements with these unions, and these agreements have provided for retiree healthcare benefits since 1978 for PSU retirees and since 1981 for OASU retirees. Plaintiffs Montgomery and Whaley, former associate staff employees of OEA, retired in 1999 and 2000, and they seek to represent a class of OASU retirees. Plaintiffs Thorley, Prater and Westfall, former professional employees of OEA, retired between 1984 and 1994, and they seek to represent a class of PSU retirees.

The OASU Agreements. When Montgomery and Whaley retired, the collective bargaining agreement for OASU employees said that it represented "the full and complete commitments between both parties and [could] be altered . . . only through the voluntary, mutual consent of the parties in a written and signed amendment." JA 1101. The agreement provided active employees with medical insurance covering "hospitalization; surgical; major-medical; out-patient X-ray; EKG; laboratory; prescription drug; dental; and optical." JA 1080. Retirees, the agreement said, "shall be included in the Association group in regard to: hospitalization; surgical; out-patient; and major-medical coverage," but, "[a]fter the retiree reaches age 65, the Association is required to provide only major-medical coverage." JA 1086. The collective bargaining agreement also required the company to give each employee "an individual contract guaranteeing the retiree health benefits at the time of retirement." Id.

The PSU Agreements. Like the OASU contract, the PSU collective bargaining

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agreements in force when Prater, Thorley and Westfall retired provided that changes could be made "only by an amendment properly signed and ratified by each party." JA 1387, 1501, 1566. The first provision for retiree benefits, in a subsection entitled "Continuation of Benefits," said that "[t]he Association shall continue to provide all benefits provided by Sections 11.0112 and 11.0113 of this Contract for each retired employee to age sixty-five." JA 1357 (Thorley); JA 1468 (Prater); see also JA 1547-48 (Westfall). The next subsection, entitled "Reimbursement for Cost of Medicare," said that OEA "shall reimburse each retired employee over age sixty-five ... for the cost of Medicare Part B." Id. And under the next subsection, entitled "Supplement to Medicare, "the agreement said that OEA "shall supplement the benefits of Medicare Parts A and B to provide benefits at a level equal to those benefits provided by Sections 11.0112 and 11.0113 of this Contract for each retired employee to age sixty-five." Id.

The Summary Plan Descriptions. OEA, like other employers, distributes summary plan descriptions to its employees to assist them in understanding the more detailed, complex and formal plan documents. Each of the summaries distributed to the plaintiffs contained reservation-of-rights clauses.

The summary distributed to the OASU retirees provided: "Retired employees may continue coverage, in accordance with the collective bargaining agreement.... While the employer expects retiree coverage to continue, the employer reserves the right to modify or discontinue retiree coverage at any time." JA 1832. Elsewhere the OASU summary said that OEA "may modify or amend the Plan from time to time in accordance with the provision of the collective bargaining agreement." JA 1851.

The reservation-of-rights clauses in the PSU summaries did not say that any modifications to benefits must be in accordance with the bargaining agreements. "The Plan Administrator," they said, "may change or eliminate benefits under the plan and may terminate the entire plan or any portion of it." JA 1934 (Thorley); JA 1976 (Prater); see also JA 2045 (Westfall).

The Dispute. For two decades, OEA provided most of its retirees with insurance to supplement Medicare after they reached 65. On March 1, 2004, OEA sent a letter to PSU employees informing them that OEA would honor its "contractual commitment[]" to reimburse retirees for Medicare Part B but would no longer pay for the...

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