Garbinski v. Gen. Motors LLC

• Decision Date: 30 March 2012
• Docket Number: No. 11-cv-11503,11-cv-11503
• Parties: DANUTA C. GARBINSKI et al., Plaintiffs, v. GENERAL MOTORS LLC, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

DANUTA C. GARBINSKI et al., Plaintiffs,

v.GENERAL MOTORS LLC, Defendant.

No. 11-cv-11503

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

Dated: March 30, 2012

Hon. Gerald E. Rosen

OPINION AND ORDER REGARDING THE PARTIES'

MOTIONS FOR SUMMARY JUDGMENT

I. INTRODUCTION

Plaintiffs Danuta Garbinski and Jerrie Rynicki ("Plaintiffs") filed similar putative class actions against their former employer, Defendant General Motors LLC ("GM" or "Defendant"), in response to a decision made by GM to reduce their weekly workers' compensation benefits. The two cases were consolidated by order of this Court [Dkt. #12]. Plaintiffs claim that the decision to reduce workers' compensation benefits based on the availability of other benefits violated both the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Michigan law, Mich. Comp. Laws §§ 418.354(11), (14). Both parties moved for summary judgment. Having reviewed the parties' briefs and the record, the Court finds that the pertinent allegations and legal arguments are sufficiently addressed in these materials and that oral argument would not assist in theresolution of this motion. Accordingly, the Court will decide Defendant's motion "on the briefs." See L.R. 7.1(f)(2). The Court's opinion and order is set forth below.

II. FACTUAL BACKGROUND

Plaintiffs are both former GM employees who retired after becoming totally and permanently disabled as a result of work-related injuries. Garbinski was injured on March 30, 2004 and retired as a permanently disabled pensioner on April 1, 2005. Rynicki was injured on January 8, 2003 and retired as a permanently disabled pensioner on February 1, 2004. At all relevant times, Plaintiffs were represented by their union, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW"), which undertook the negotiation of a series of collective bargaining agreements ("CBA" or "CBAs") with Defendant. Upon retiring, Plaintiffs began receiving payments for workers' compensation, social security disability insurance, and disability retirement insurance pursuant to the CBA between the UAW and GM.

Because workers' compensation and disability retirement insurance are both employer-funded benefits aimed at accomplishing the same goal -- compensating for a disabled employee's lost earning potential -- the Michigan legislature enacted a statute allowing employers to "coordinate" workers' compensation and disability retirement benefits. The statute essentially allows employers to reduce the amount of an individual's workers' compensation benefits in light of disability retirement benefits also being received by the same person. The legislature enacted this provision because itfound that employers were paying more than once to replace a single employee's lost earning capacity. However, employers are not required to coordinate benefits.

The 2003 CBA between GM and the UAW did not initially include language regarding the coordination of benefits. That year, however, GM and the UAW agreed to an amendment to the 2003 CBA ("the 2003 letter") stating that GM was electing against the coordination of benefits described above, for the time being. The appended paragraph reads as follows: "Pursuant to Subsection 354(14) of the Michigan Workers Compensation Act, as amended, until termination or earlier amendment of the 2003 Collective Bargaining Agreement, workers compensation for employees shall not be reduced by disability retirement benefits payable under the Hourly-Rate Employees Pension Plan."

In 2007, GM and the UAW agreed to a new, supplemental CBA ("the 2007 CBA"). As they did in 2003, GM and the UAW subsequently amended the 2007 CBA to include language regarding the coordination of workers' compensation and disability retirement benefits ("the 2007 letter"). Unlike the prior amendment, however, the 2007 letter stated that disability benefits would be coordinated (i.e., reduced), but only for "employees who are injured and retire on or after October 1, 2007[.]"¹ The appendedparagraph otherwise contained much of the same language as the 2003 CBA amendment, including the caveat that the amendment would last "until termination or earlier amendment of the 2007 Collective Bargaining Agreement . . . ."

Then, in 2009, GM and the UAW agreed to amend the terms of the 2007 letter again in light of GM's precarious finances ("the 2009 letter"). As amended by the 2009 letter, the 2007 CBA stated that, effective January 1, 2010, all retirees' benefits would be coordinated pursuant to Mich. Comp. Laws § 418.354(14).² On January 1, 2010, Plaintiffs' benefits were reduced accordingly. This lawsuit was filed to contest the change. Plaintiffs challenge the coordination of benefits under provisions of both the Labor Management Relations Act ("LMRA") and Michigan law.

III. ANALYSIS

A. Summary Judgment Standard

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "[A] party seeking summary judgment always bears the initialresponsibility of informing the [Court] of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quotation marks and citations omitted).

In deciding a motion brought under Rule 56, the Court views the evidence in the light most favorable to the nonmoving party. Pack v. Damon Corp., 434 F.3d 810, 813 (6th Cir. 2006). Yet, "[a] party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record" or "showing that the materials cited do not establish the absence . . . of a genuine dispute . . . ." Fed. R. Civ. P. 56(c)(1)(A)-(B). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact" then the Court may "consider the fact undisputed for purposes of the motion[.]" Fed. R. Civ. P. 56(e)(2). "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

B. Summary Judgment is Appropriate on Plaintiffs' LMRA Claim

The LMRA gives federal courts jurisdiction over breach of contract claims involving collective bargaining agreements. 29 U.S.C. § 185(a). Such is the nature of Plaintiffs' suit: they allege that Defendant's decision to coordinate the workers' compensation benefits of already-retired individuals was a violation of the CBA, but their argument takes multiple forms. First, Plaintiffs argue that their benefits had vested such that they could not be unilaterally reduced. Second, Plaintiffs assert that the modificationitself was not permitted by the CBA's amendment provision. Finally, Plaintiffs characterize the amendment as retroactive and thus impermissible under a separate section of the CBA.³ The Court will address each contention in turn.

As explained below, the Court holds that summary judgment in Defendant's favor is appropriate. There are no disputes of material fact, and Defendant is entitled to judgment as a matter of law: Plaintiffs' benefits were not vested, Defendant complied with the terms of the CBA when it amended its benefit coordination policy, and the amendment is not properly characterized as retroactive. Fed. R. Civ. P. 56(a).

1. Plaintiffs' benefits did not vest.

A claim arising under the LMRA is "essentially a breach of contract allegation[,]" Schreiber v. Philips Display Components Co., 580 F.3d 355, 363 (6th Cir. 2009); and, as with contracts more generally, benefits arising out of a CBA can vest. That is, they can become fixed for the beneficiary's future enjoyment. Black's Law Dictionary 1699 (9th ed. 2009); Sprague v. Gen. Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998) ("having vested, the benefits could not be altered without the plaintiffs' consent."). Vested benefits in a CBA cannot be unilaterally modified without running afoul of the LMRA. Sprague, 113 F.3d at 399.

Under traditional rules of contract interpretation, whether retiree benefits have vested depends on the intent of the parties. Price v. Bd. of Trustees of Indiana Laborer'sPension Fund, 632 F.3d 288, 292 (6th Cir. 2011); Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am. v. Yard-Man, 716 F.2d 1476, 1479 (6th Cir. 1983). "Clearly the parties to a collective bargaining agreement may provide for rights which will survive termination of their collective bargaining relationship." Yard-Man, 716 F.2d at 1479 (citing John Wiley & Sons v. Livingston, 376 U.S. 543, 555 (1964)). Although, such a benefit "must necessarily find its genesis in the collective bargaining agreement." Id.

In the Sixth Circuit, "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." Cole v. ArvinMeritor, Inc., 549 F.3d 1064, 1069 (6th Cir. 2008) (citing Int'l Union, United Auto., Aerospace & Agric. Implement Workers of Am. v. Yard-Man, 716 F.2d 1476, 1479 (6th Cir. 1983)). An intent to vest can be found in explicit language to that effect or, in the alternative, "if the context and other available evidence indicate an intent to vest." Id. (quoting Noe v. PolyOne Corp., 520 F.3d 548, 552 (6th Cir. 2008)). "The [C]ourt should . . . interpret each provision in question as part of the integrated whole. If possible, each provision should be construed consistently with the entire document and the relative positions and purposes of the parties." Yard-Man, 716 F.2d at 1479-80 (6th Cir. 1983) (citations omitted). Further, "the collective bargaining agreement's terms must be construed so as to render none nugatory...