Senn v. United Dominion Industries, Inc.
Decision Date | 08 January 1992 |
Docket Number | No. 90-3100,90-3100 |
Parties | 139 L.R.R.M. (BNA) 2246, 60 USLW 2464, 120 Lab.Cas. P 11,117, 14 Employee Benefits Cas. 2238 Norman SENN, Clemens Kien, Paul Gilmore, et al., Plaintiffs-Appellees, v. UNITED DOMINION INDUSTRIES, INCORPORATED, formerly known as AMCA International Corporation, PST, Incorporated and Pressed Steel Tank Company, Incorporated, Defendants-Appellants. |
Court | U.S. Court of Appeals — Seventh Circuit |
Miriam R. Katzman, Zubrensky, Padden, Graf & Maloney, Milwaukee, Wis., William T. Payne (argued), Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, Cal., George Graf, Gillick, Murphy, Wicht & Prachthauser, Brookfield, Wis., for plaintiffs-appellees.
Kirk D. Messmer, Allan Gunn, Jay G. Swardenski (argued), Matkov, Salzman, Madoff & Gunn, Chicago, Ill., for defendants-appellants.
Before BAUER, Chief Judge, COFFEY, Circuit Judge, and WILL, Senior District Judge. *
United Dominion Industries, Inc., its subsidiary PST, Inc. ("PST"), and Pressed Steel Tank Co., Inc. ("New Pressed Steel"), the corporation which purchased the assets of PST in January 1987, appeal from the district court's permanent injunction of September 10, 1990. The injunction required the defendants to furnish lifetime health and life insurance benefits to retired PST hourly employees who worked for PST after November 1975, as well as their spouses and eligible dependents. The district court's injunction ordered that the defendants pay the full premium cost for coverage, except for the cost difference between conventional health insurance coverage and HMO coverage for persons who retired after August 1986. The order accompanying the injunction remanded the suit to the magistrate for determination of past damages that retired employees incurred as a result of the defendants' refusal to provide the benefits. We reverse.
This case concerns the obligations of the defendants to provide health and life insurance coverage for retirees of PST, Inc. under a series of Collective Bargaining Agreements (CBAs) entered into between PST and the United Steelworkers during the period from August 1, 1975 to July 31, 1988. Each one of these CBAs contained a "scope of agreement" provision which read:
The first Collective Bargaining Agreement between PST and the United Steelworkers relevant to this case covered the period from August 1, 1975 to July 31, 1978. Section 24.1 of that agreement read, in relevant part:
"24.1 Insurance
a. The Company shall select the insurance carrier(s) to provide the benefits provided in the Insurance Plans and agrees to continue the plans as described in the Insurance Booklet dated June 12, 1973 entitled 'Insurance Plan for Employees and Their Dependents Covering Hourly Employees--Life Insurance, Accident and Sickness, Hospital Surgical Expense--Major Medical Expense' and as revised.
b. The Company will continue for retired employees, the WPS Medicare Supplemental Plan premium contribution of $3.90 per month and $4.00 Medicare 'B' refund.
* * * * * *
d. The Company and the Union Insurance Committee will meet to revise the Insurance Booklet to incorporate changes either by issuing a new booklet or by issuing supplemental sheets, whichever appears more appropriate."
Prior to revision, the 1973 Insurance Booklet referred to in the CBAs contained the following language relevant to retiree insurance under the general heading of "Termination of Coverage":
"Termination of Employment
If not previously terminated, all coverage terminates at the end of the month in which employment terminates and seniority is lost (see 'Retirement' and 'Conversion' below).
* * * * * *
Retirement
On retirement under the Normal, Disability, or Early Retirement provisions of the Pressed Steel Tank Hourly Pension Plan, at the end of the calendar month in which employment terminates, Accident and Sickness coverage terminates and Term Life Insurance coverage reduces to $1,000 (except that if the employee is eligible for a Disability Retirement Benefit his Term Life Insurance coverage will be continued at its present level (usually $7,500) until the end of the calendar month in which he attains age 65, at which time the coverage reduces to $1,000[ ) ]. Special Hospital-Surgical Expense coverage is available to the retired employee or the retired employee and his dependents if he makes the required quarterly contributions in advance for the coverage desired."
The booklet also contained the following provision under the topic of "Additional Information":
Thus, the 1975-78 agreement provided for continuing health and welfare benefits for retirees at company expense. The joint union-company insurance committee published a revised Insurance Booklet in December 1976 that contained provisions materially identical to those quoted from the 1973 booklet. The revised booklet did, however, add a schedule of the company's contributions toward retiree health insurance. Further, in November 1977 PST filed a summary plan description with the Department of Labor (as required under ERISA) that contained the following language regarding retiree benefits:
The Summary Plan Description also contained a "Loss of Benefits" section that provided:
Neither the 1975-78 CBA nor the 1976 Insurance Booklet required contributions from retirees.
The parties entered into a 1978-81 Collective Bargaining Agreements that contained language identical to that found in Sections 24.1a. and 24.1d. of the 1975-78 agreement with the exception that the Insurance Booklet referred to was the 1976 edition. The Insurance Booklet issued in 1979 contained language similar to that of the 1976 Booklet with the exception that the death benefit on term life insurance was increased for retirees and changes were made in the company's contributions for retiree insurance. The bargaining agreement adopted for 1981-84 included the following language setting forth more explicitly the company policy of paying the cost of retiree insurance:
In April of 1982 the joint union-company insurance committee issued a revised Insurance Booklet that increased retiree life insurance coverage to $2,000 and provided that, effective August 1, 1982, all retirees, regardless of retirement date, would have their full insurance premium paid by PST.
AMCA International Corporation (the name under which United Dominion Industries, Inc. operated at all times relevant to this suit) acquired PST as a subsidiary in 1982. Thus, the negotiations for the 1984-86 Collective Bargaining Agreements were the first bargaining sessions in which United Dominion participated, and the resultant agreement included a significant revamping of employee health benefits. The new provisions of the CBA relevant to retiree medical benefits read as follows:
"24.1 a. The Company reserves the right to select or change the insurance carrier(s) or to self fund the negotiated group benefits.
b. The existing group medical, life, dental and accident and sickness coverages in effect on July 31, 1984 will be continued until the new group benefit plans become effective on October 1, 1984.
c. The existing group medical plan will be eliminated. In its place the company Comprehensive Health Plan will be installed. Employees will have the option of selecting the Company's Comprehensive Health Plan or one of the following Health Maintenance Organizations (HMO's):
1. Compcare
2. Family Health Plan
3. Maxicare
4. Samaritan Health Plan
... The company will pay the full premium contribution for either option.
* * * * * *
g. Each employee shall be furnished a copy of the Group benefits booklet which shall contain the benefits negotiated."
The Group benefits booklet issued in April 1985 1 set forth the following language regarding retiree health insurance:
"The class of Employees also includes eligible Retired Employees (including eligible dependents) who are retired in accordance with the retirement plan of the Company but limited in benefit coverage as follows:
1. Accident and sickness [disability] benefits are only provided to active employees.
2. Dental expense benefits are only provided to Disability Retirees (until they reach age 65) and their eligible dependents. Employees retiring early...
To continue reading
Request your trial-
Bidlack v. Wheelabrator Corp.
... ... No. 91-2378 ... United States Court of Appeals, ... Seventh Circuit ... Argued ... as it does pension benefits, Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 91, 103 S.Ct. 2890, 2897, 77 L.Ed.2d 490 ... order to reexamine an earlier decision of the court, Senn v. United Dominion Industries, Inc., 951 F.2d 806 (7th ... ...
-
Hackett v. Xerox Corp. Long-Term Disability Income
... ... Long-Term Disability Income Plan, Health International, Inc., and Elliott Wolf, M.D. and Lance Holemon, M.D., as agents ... Defendants ... No. 00 C 3140 ... United States District Court, N.D. Illinois, Eastern Division ... See e.g. Navarro v. Fuji Heavy Industries. Ltd., 117 F.3d 1027, 1030 (7th Cir.1997). If the ... Corp., 993 F.2d 603, 605 (7th Cir.1993)); Senn v. United Dominion Indus., Inc., 951 F.2d 806, 814 (7th ... ...
-
Boeing Co. v. March
... ... Takacs, and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of ... City of Beloit, 248 F.3d at 652; Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 548 (7th Cir.2003) ... Senn v. United Dom. Indus., 951 F.2d 806 (7th Cir.1992), the ... ...
-
Marconi v. City of Joliet, an Ill. Mun. Corp.
...agreements in force at the time of their respective retirements. Id. The circuit court applied Senn v. United Dominion Industries, Inc., 951 F.2d 806, 814–16 (7th Cir.1992), which employed a presumption that health care benefits established by collective bargaining agreements do not survive......
-
Fourth Circuit Rules That Employer Could Not Unilaterally Change Retiree Health Benefits
...exists under the LMRA when retirees seek monetary relief which the courts deemed to be "legal relief." Senn v. United Dominion Industries, 951 F.2d 806 (7th Cir. 1992); Stewart v. KHD Deutz, 75 F.3d 1522 (11thCir. 1996). Cases in the Sixth Circuit, however, have ruled that suits for retiree......