The U.S. Supreme Court has agreed to hear a Sixth Circuit retiree health care case, M&G Polymers USA, LLC v. Tackett. The issue is:
Whether, when construing collective bargaining agreements in Labor Management Relations Act (LMRA) cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest (and therefore continue indefinitely), as the Sixth Circuit holds; or should require a clear statement that health-care benefits are intended to survive the termination of the collective bargaining agreement, as the Third Circuit holds; or should require at least some language in the agreement that can reasonably support an interpretation that health-care benefits should continue indefinitely, as the Second and Seventh Circuits hold.
The decision to take this case was announced within two weeks of the Sixth Circuit’s publication of its retiree health care decision in United Steel, Paper and Forestry, Rubber, Manufacturing Energy, Allied Industrial And Service Workers International Union, AFL-CIO-CLC v. Kelsey-Hayes Company. Coincidence? I don’t think so. In a concurring and dissenting opinion in Kelsey-Hayes, Judge Sutton expressed concern that the Court was improperly handcuffing employers, and that is a concern shared by many. In its Yard-Man inference line of cases, the Sixth Circuit has handcuffed employers to providing free lifetime health care benefits in a manner that no other circuit has followed. M&G Polymers is not going to resolve the issue of what benefits must be provided (Judge Sutton’s concern), but it will resolve the inconsistency among the circuits regarding the most basic presumption about collective bargaining agreements. This will be an important decision for employers struggling to manage costs while implementing health care reform.