Fletcher v. Honeywell Int'l, Inc.

• Court: U.S. District Court — Southern District of Ohio
• Writing for the Court: WALTER H. RICE, UNITED STATES DISTRICT JUDGE
• Citation: Fletcher v. Honeywell Int'l, Inc., 238 F.Supp.3d 992 (S.D. Ohio 2017)
• Decision Date: 28 February 2017
• Docket Number: Case No. 3:16–cv–302
• Parties: Barbara FLETCHER, et al., Plaintiffs, v. HONEYWELL INTERNATIONAL, INC., Defendant.

238 F.Supp.3d 992

Barbara FLETCHER, et al., Plaintiffs,

v.HONEYWELL INTERNATIONAL, INC., Defendant.

Case No. 3:16–cv–302

United States District Court, S.D. Ohio, Western Division.

Signed February 28, 2017

John G. Adam, Stuart M. Israel, Martens, Ice, Klass Legghio & Israel, P.C., Royal Oak, MI, William Wertheimer, Law Office of William Wertheimer, Bingham Farms, MI, for Plaintiffs.

Charles Joseph Faruki, Donald E. Burton, Faruki Ireland & Cox PLL, Dayton, OH, Kathleen A. Brogan, Craig S. Primis, Jennifer M. Bandy, K. Winn Allen, William Kimmitt, Kirkland & Ellis LLP, Washington, DC, for Defendant.

OPINION AND ORDER INCLUDING FINDINGS OF FACT AND CONCLUSIONS OF LAW; JUDGMENT TO ENTER IN FAVOR OF PLAINTIFFS AND AGAINST DEFENDANT; TERMINATION ENTRY

WALTER H. RICE, UNITED STATES DISTRICT JUDGE

On behalf of themselves and other similarly situated retirees and their spouses and other eligible dependents, Plaintiffs, Barbara Fletcher, Timothy Philpot, Marcia Fink and Lucinda Smith, filed suit against their former employer, Defendant Honeywell International, Inc. ("Honeywell").¹ They challenge Honeywell's plan to terminate healthcare benefits for those who retired from Honeywell's Greenville, Ohio, plant. Plaintiffs maintain that Honeywell promised them lifetime retiree healthcare benefits, and that the proposed termination of such benefits breaches a series of collective bargaining agreements ("CBAs"). They seek to enforce Honeywell's promises under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132.

Honeywell, however, denies that it agreed to provide lifetime retiree healthcare benefits. According to Honeywell, because the right to retiree healthcare benefits was not vested, any obligation to provide such benefits ended on May 22, 2014, when the last in a long series of CBAs expired.

On November 15, 2016, the Court issued a Decision and Entry overruling Honeywell's Motion to Dismiss. Doc. # 29. That Decision and Entry, which contains a detailed discussion of the governing case law, including M & G Polymers USA, LLC v. Tackett, ––– U.S. ––––, 135 S.Ct. 926, 190 L.Ed.2d 809 (2015) (abrogating UAW v. Yard–Man, Inc., 716 F.2d 1476 (6th Cir. 1983) ), and Gallo v. Moen, Inc., 813 F.3d 265 (6th Cir. 2016), cert. denied, ––– U.S. ––––, 137 S.Ct. 375, 196 L.Ed.2d 293 (2016), is fully incorporated herein.²

In its Decision and Entry, the Court concluded that, because the language contained in the 2000–2003 CBA and subsequent CBAs was ambiguous concerning the parties' intent to vest retiree healthcare benefits, the Court would have to resort to extrinsic evidence to resolve the ambiguity. Rather than convert the motion to dismiss into a motion for summary judgment, the Court found it preferable to hold an evidentiary hearing and rule on the merits of Plaintiffs' claims as soon as possible, given that the retiree healthcare benefits were, at that time, scheduled to be terminated on December 31, 2016.

Thereafter, Honeywell agreed to extend healthcare coverage through February 28, 2017, so that the Court had time to hold the hearing and issue its decision. The Court held the evidentiary hearing on January 30–31, 2017. Sharon Meadows, Edward "Buzz" Fink, Edward Bocik and Eric Warren testified at the hearing. In addition, the parties presented deposition testimony of Steve Shelton, Rick Hancock, Robert McKeage and Edward Thompson. The parties then filed post-hearing briefs. Docs. ## 52, 53, 54, 55.

I. Discussion

This case concerns Honeywell's proposed termination of retiree healthcare benefits at its Greenville, Ohio, plant. On December 28, 2015, Honeywell notified Greenville retirees and their spouses that it intended "to terminate the retiree medical and prescription drug coverage currently provided to you and your covered dependents as of December 31, 2016." JX48.

Plaintiffs filed suit on behalf of themselves and other similarly situated retirees, alleging that Honeywell had promised them lifetime healthcare benefits, and that the proposed termination of those benefits violated the terms of a long series of CBAs. Honeywell admits that it promised to provide lifetime healthcare benefits to surviving spouses and dependents of Greenville retirees, but denies that it promised lifetime healthcare benefits to the retirees themselves.

Plaintiffs bear the burden of proving, by a preponderance of the evidence, that Honeywell agreed to provide those lifetime benefits. If the retirees have a vested right to healthcare benefits, Honeywell cannot unilaterally terminate those benefits; however, if there is no vested right, Honeywell was free to terminate retiree healthcare benefits upon the expiration of the final CBA. Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1008–09 (6th Cir. 2009).

For the reasons set forth below, the Court finds that Plaintiffs have satisfied their burden of proving that Honeywell agreed to provide lifetime healthcare benefits to its retirees.

A. Pre–2000 CBAs

Employer-employee relations at Honeywell's Greenville, Ohio, plant have been governed by a long series of CBAs spanning many decades. Prior to 2000, employees were represented by the Fram Employees Independent Union. Pre–2000 CBAs generally provided that Honeywell (or its predecessor companies) would pay the premium cost of single coverage for any retiree enrolled in the health care plan. Retirees who enrolled in family coverage were required to pay the difference in premium costs between single and family coverage. JX001–JX014.

It is undisputed that pre–2000 CBAs contain no language indicating that retiree healthcare benefits were vested, or that Honeywell was obligated to provide lifetime coverage to retirees or their family members. Trial Tr. at 84, 87. Honeywell maintains that its obligation to provide retiree healthcare benefits was subject to the general durational clause contained in each CBA, and ended when the CBA expired.

Honeywell points out that the pre–2000 CBAS contain none of the provisions that the Court found, in later CBAs, to create an ambiguity concerning an intent to vest, e.g., lifetime healthcare benefits to surviving spouses, or deferred caps on company contributions. Honeywell maintains that, because the language in the pre–2000 CBAs is unambiguous, it would be inappropriate to consider any extrinsic evidence of the parties' understanding of the duration of Honeywell's obligation to provide retiree healthcare benefits. Citing Sprague v. General Motors Corp., 133 F.3d 388, 402–03 (6th Cir. 1998), Honeywell also argues that, absent any ambiguity, oral communications cannot be used to modify the terms of the written agreements.

If the Court were being asked to construe the language contained in the pre–2000 CBAs, these rules would certainly apply. However, the Court's only task in this case is to resolve the ambiguities contained in the 2000–2003 CBA and subsequent CBAs to determine the parties' intent, at the time of contracting, with respect to the duration of Honeywell's obligation to provide retiree healthcare benefits. To the extent that evidence of the parties' pre–2000 understanding of the duration of Honeywell's obligation to provide retiree healthcare benefits sheds light on the ambiguous language used in the 2000–2003 CBA and subsequent CBAs, such extrinsic evidence may be considered regardless of whether the pre–2000 CBAs are unambiguous.

Honeywell notes that Edward Bocik, now Vice President of Labor Relations for Honeywell, is the only witness who participated in negotiating any of the pre–2000 CBAs. Bocik was not the chief spokesperson, but was at the bargaining table for most of the negotiations for the 1989–1992 CBA. Trial Tr. at 198, 200. Bocik testified that there was no discussion at the bargaining table concerning lifetime retiree healthcare benefits, and it was his understanding that the company's obligation to provide healthcare coverage would expire when the CBA expired. Id. at 210, 213–215.

Bocik was not present at the bargaining table when the 1994–1997 or 1997–2000 CBAs were negotiated, but participated in a supervisory role. In setting the company's overall economic parameters for the negotiations, he operated under the assumption that Honeywell was obligated to provide retiree healthcare benefits only for the term of each contract. Id. at 220–21. According to Bocik, it would have been against company policy to provide lifetime retiree healthcare benefits. Id. at 227. Bocik testified that it was not his intent to confer lifetime healthcare benefits to retirees. Nor was he made aware of any unspoken understanding that healthcare benefits would be provided for the lifetime of each retiree at the Greenville plant. Id. at 224–25.

As explained below, Mike Rihm, Honeywell's Manager of Labor Relations at the Greenville plant, disagreed. Rihm, a long-time employee at the Greenville plant, had bargained on behalf of Honeywell and its predecessors in 1989, 1994, and 1997. See JX12, GR000660; JX13, GR000707; JX14, GR000760. It was his understanding that Greenville retirees had lifetime healthcare benefits.

B. 2000–2003 CBA

1. Negotiation Preparation

In 2000, a National Labor Relations Board election was held, and the United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") became the new bargaining unit for the employees at the Greenville plant. Trial Tr. at 154. Sharon Meadows, an attorney and benefits consultant for the UAW, was assigned to assist with negotiations held after the election. Id. at 56.

At that point, the union was "very much in the dark about the existing benefits." Id. at 76. Meadows testified that, it was "unfortunate" that the 1997–2000 CBA was "very vague" and lacked "a lot of the basic information." Id. at 63. Likewise, Steve Shelton, the UAW's lead negotiator for the 2000–2003 CBA, testified that, because not all of the current practices had been put in writing, the scope of existing benefits was...