892 F.3d 217 (6th Cir. 2018), 17-3277, Fletcher v. Honeywell International, Inc.
|Citation:||892 F.3d 217|
|Opinion Judge:||JULIA SMITH GIBBONS, Circuit Judge.|
|Party Name:||Barbara FLETCHER; Timothy Philpot; Marcia Fink; Lucinda Smith, Plaintiffs-Appellees, v. HONEYWELL INTERNATIONAL, INC., Defendant-Appellant.|
|Attorney:||K. Winn Allen, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant. John G. Adam, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, for Appellees. K. Winn Allen, Craig S. Primis, P.C., Matthew P. Downer, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant. John G. Adam, Stuart M. Israel, LEGGHIO &...|
|Judge Panel:||Before: CLAY, GIBBONS, and BUSH, Circuit Judges. GIBBONS, J., delivered the opinion of the court in which CLAY and BUSH, JJ., joined. CLAY, J. (pg. 228), delivered a separate concurring opinion. CLAY, Circuit Judge, concurring.|
|Case Date:||June 08, 2018|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Argued: December 5, 2017
Appeal from the United States District Court for the Southern District of Ohio at Dayton, No. 3:16-cv-00302— Walter H. Rice, District Judge.
K. Winn Allen, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant.
John G. Adam, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, for Appellees.
K. Winn Allen, Craig S. Primis, P.C., Matthew P. Downer, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant.
John G. Adam, Stuart M. Israel, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, William Wertheimer, LAW OFFICE OF WILLIAM WERTHEIMER, Bingham Farms, Michigan, for Appellees.
Before: CLAY, GIBBONS, and BUSH, Circuit Judges.
GIBBONS, J., delivered the opinion of the court in which CLAY and BUSH, JJ., joined.
JULIA SMITH GIBBONS, Circuit Judge.
Plaintiffs, on behalf of themselves and other similarly situated retirees, retirees surviving spouses, and eligible dependents, filed suit against Defendant Honeywell International, Inc. to enforce their rights to retirement healthcare benefits under a series of Collective Bargaining Agreements ("CBAs"). The district court held that the CBAs were ambiguous and relied on extrinsic evidence for its conclusion that the parties intended retiree healthcare benefits to vest for life. Because we hold that the CBAs are unambiguous, we reverse the district courts judgment.
Plaintiffs are retirees who worked at Honeywells plant in Greenville, Ohio. Honeywell owned and operated the Greenville plant from 1960 until it sold the plant in 2011. While employed at the Greenville plant, plaintiffs were members of a bargaining unit represented by the Fram Employees Independent Union ("FEIU") until 2000, and after 2000 by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") and UAW Local 2413.
The bargaining unit and Honeywell negotiated a series of CBAs containing the terms that would govern employer-employee relations. Although Honeywell sold the plant in 2011, the final CBA did not expire until May 22, 2014. Honeywell continued to provide healthcare benefits for retirees and their spouses after the CBA expired, but on December 28, 2015, it sent them a letter informing them that it "intend[ed] to terminate the retiree medical and prescription drug coverage currently provided to you and your covered dependents as of December 31, 2016." DE 15-2, Defendants Ex. B: 12/28/2015 Letter, Page ID 393. Plaintiffs filed suit on behalf of themselves and other similarly situated retirees, retirees surviving spouses, and eligible dependents1 under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, claiming that Honeywell was obligated under the CBAs to provide retirees with lifetime healthcare benefits.
Honeywell argued that the 2011 CBAs general durational clause, which stated that the agreement remained in effect until
May 22, 2014, governed its duty to provide retiree healthcare benefits. Thus, it claimed that plaintiffs had no right to healthcare benefits beyond May 22, 2014. It did promise to continue providing healthcare coverage to certain surviving spouses and dependents since the 2011 CBA expressly promised that "[u]pon the death of a retiree, the Company will continue coverage for the spouse and dependent children for their lifetime," provided that particular conditions were met. JA 18, 2011 CBA, at GR001053.
Honeywell filed a 12(b)(6) motion to dismiss for failure to state a claim, arguing that under M & G Polymers USA, LLC v. Tackett, __ U.S. __, 135 S.Ct. 926, 190 L.Ed.2d 809 (2015) and Gallo v. Moen Inc., 813 F.3d 265 (6th Cir. 2016), the district court was required to dismiss plaintiffs LMRA and ERISA claims. Honeywell argued that the Greenville CBAs are legally indistinguishable from those in Gallo : they contain no clear language promising to provide lifetime retiree healthcare benefits while explicitly vesting other benefits for life, and they are governed by general durational clauses. The district court denied Honeywells motion to dismiss.
Although the district court acknowledged that the CBAs did not expressly provide for vested retiree healthcare benefits, it pointed to language from this circuit emphasizing that the Supreme Courts Tackett decision does not mean that "the absence of such specific language, by itself, evidences an intent not to vest benefits ...." Tackett v. M & G Polymers USA, LLC, 811 F.3d 204, 209 (6th Cir. 2016). The district court thus found that the lack of express vesting language was not dispositive.
The district court further identified "critical differences" between the instant case and Gallo . DE 29, Decision and Entry Overruling Mot. to Dismiss, Page ID 953. The most important difference, the court reasoned, was the language in Honeywells CBA promising lifetime healthcare benefits to retirees surviving spouses and dependents. Article 33, Section D.5 of the 2011 CBA states: "[u]pon the death of a retiree, the Company will continue coverage for the spouse and dependent children for their lifetime," provided certain conditions are met. JA 18, 2011 CBA, at GR001053. According to the district court, such express vesting of lifetime healthcare benefits for surviving spouses and dependents strongly implied that the parties also intended to vest lifetime healthcare benefits for the retirees themselves. While not dispositive, the court found that the express language vesting healthcare benefits for surviving spouses and dependents was "highly unusual" and created ambiguity about the parties intentions. DE 29, Decision and Entry Overruling Mot. to Dismiss, Page ID 957.
The district court also noted that the Gallo CBA contained a reservation-of-rights clause, while the 2011 Honeywell CBA does not. Furthermore, unlike the Gallo CBA, the Honeywell CBA does not have a provision stating that "continued [healthcare benefits] will be provided ...." Gallo, 813 F.3d at 269 (emphasis added). In Gallo, we held that the use of "continued" as a modifier suggested that retiree healthcare benefits were not vested because if they were, the CBA would not need to "continue" them.
Lastly, the district court relied on Article 33, Section D.1 of the 2011 Honeywell CBA, which provides: "[e]mployees ages 50-55 with 30 years of service, who leave the company prior to becoming pension eligible, will be eligible for retiree health care benefits when they commence their pension benefits (age 55 or later)." JA 18,
2011 CBA, at GR001051. The court agreed with plaintiffs that intent to vest could be implied from the fact that eligibility for healthcare benefits could arise years after the CBAs expired.
Based on its conclusion that the CBAs were ambiguous under ordinary principles of contract law, the district court conducted an evidentiary hearing to resolve the ambiguities. It considered extrinsic evidence from both the pre- and post-2000 CBA negotiations that largely consisted of testimony from various participants in the negotiation process. After the hearing, the district court concluded that plaintiffs proved by a preponderance of the evidence that Honeywell agreed to provide lifetime healthcare benefits to retirees at the Greenville plant. It permanently enjoined Honeywell from terminating healthcare benefits for all putative class members who retired from the Greenville plant before June 1, 2012, and for their eligible spouses and dependents. Honeywell appealed.
After a bench trial, this court reviews the district courts findings of fact for clear error and its conclusions of law de novo . T. Marzetti Co. v. Roskam Baking Co., 680 F.3d 629, 633 (6th Cir. 2012). Questions of contract interpretation are legal questions that this court reviews de novo . See Royal Ins. Co. v. Orient Overseas Container Line Ltd., 514 F.3d 621, 634 (6th Cir. 2008).
Plaintiffs filed suit under LMRA § 301 and ERISA § 502. LMRA § 301 gives federal...
To continue readingFREE SIGN UP