International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (Uaw), and Local 134, Uaw v. Yard-Man, Incorporated

716 F.2d 1476, 4 Employee Benefits Cas. (BNA) 2108, 114 L.R.R.M. (BNA) 2489, 1983 U.S. App. LEXIS 24117
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 9, 1983
Docket81-1718
StatusPublished
Cited by403 cases

This text of 716 F.2d 1476 (International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (Uaw), and Local 134, Uaw v. Yard-Man, Incorporated) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (Uaw), and Local 134, Uaw v. Yard-Man, Incorporated, 716 F.2d 1476, 4 Employee Benefits Cas. (BNA) 2108, 114 L.R.R.M. (BNA) 2489, 1983 U.S. App. LEXIS 24117 (6th Cir. 1983).

Opinions

CORNELIA G. KENNEDY, Circuit Judge.

Yard-Man appeals the District Court’s grant of summary judgment that it breached its collective bargaining agreement with appellees, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW or Union) and its Local 134, UAW, by terminating the life and health insurance benefits of Yard-Man’s retired employees at the expiration of the collective bargaining agreement and in substituting the payment of present cash value for its bargained obligation to purchase annuities to fund supplemental pensions. We affirm the District Court’s holding that the retirees are entitled to continued insurance benefits but reverse its holding that YardMan could not, even with the consent of its pensioners, substitute cash value for annuities.

In August 1974, Yard-Man and the UAW entered into a collective bargaining agreement covering employees at Yard-Man’s Jackson, Michigan, plant. The contract bore a stated expiration date of June 1, 1977. Less than a year after the signing of the contract the plant closed.

In April 1977, Yard-Man notified its Jackson retirees that existing health and life insurance benefits would terminate upon the collective bargaining agreement’s expiration. Soon thereafter, the UAW filed grievances claiming that Yard-Man’s unilateral action in terminating the retirees’ life and health insurance violated that agreement. When Yard-Man refused to arbitrate, the UAW filed this action under § 301(a) of the National Labor Management Relations Act of 1947, 29 U.S.C. § 185 (1976), seeking to compel arbitration. Alternatively, it sought on behalf of the retirees specific performance of Yard-Man’s obligation to provide health and life insurance benefits beyond the term of the collective bargaining agreement. It also sought damages to compensate retirees who had paid insurance premiums or medical expenses since the expiration of the collective bargaining agreement.

In a second count, the UAW requested specific performance of Yard-Man’s acknowledged obligation under the collective bargaining agreement to purchase annuities to fund its supplemental pension plan. After this suit was filed, and without notice or consultation with the UAW, Yard-Man distributed lump sum payments of the present value of the supplemental pension rights directly to each retiree.

The UAW waived its demand for arbitration and the parties filed cross-motions for summary judgment. Relying solely upon the language of the collective bargaining agreement, the District Court found that Yard-Man breached its contractual obligations when it cancelled the retirees’ insurance upon expiration of that agreement. Yard-Man was ordered to provide health and life insurance for its retirees and their dependents, and to reimburse employers for losses due to termination of this insurance. The District Court also found that YardMan had failed to purchase annuities to fund the supplemental pension plan. It rejected Yard-Man’s claim that it had performed this obligation by paying the cash value of the annuities to individual employees. The court ordered Yard-Man to purchase the collectively bargained annuities upon repayment by retirees of the lump sum distributions theretofore made. Damage questions were reserved.

The District Court certified its judgment under 28 U.S.C. § 1292(b) as a decision involving a controlling question of law as to which there is substantial ground for difference of opinion. This court permitted [1479]*1479Yard-Man’s appeal from the summary judgment, granting specific performance on both counts, and the UAW’s cross-appeal from that portion of the District Court’s judgment requiring repayment of the cash distribution made in lieu of supplemental pension annuities, as a condition of receiving such an annuity.

Resolution of the UAW’s claim of lifelong insurance benefits for retirees requires interpretation of key contractual language in the collective bargaining agreement. The Union’s second claim, the undisputed failure by Yard-Man to purchase the annuities called for in the collective bargaining agreement, requires evaluation of Yard-Man’s affirmative defense of substituted performance and the legitimacy of offering such performance directly to the retirees after suit had been filed and without notice to the union.

I. The Parties Intended to Create Lifelong Vested Insurance Benefits for the YardMan Retirees

The District Court properly recognized that whether retiree insurance benefits continue beyond the expiration of the collective bargaining agreement depends upon the intent of the parties. Clearly the parties to a collective bargaining agreement may provide for rights which will survive termination of their collective bargaining relationship. John Wiley & Sons v. Livingston, 376 U.S. 543, 555, 84 S.Ct. 909, 917, 11 L.Ed.2d 898 (1964). The parties may, for example, provide retiree insurance benefits which survive the expiration of the collective bargaining agreement. Upholsterer’s International Union v. American Pad & Textile Co., 372 F.2d 427, 428 (6th Cir.1967); International Union, UAW, Local 784 v. Cadillac Malleable Iron Co., Inc., No. G82-75-CA1 (W.D.Mich. April 20,1982); American Standard, Inc., 57 Lab.Arb. (BNA) 698 (1971) (Warns, Arb.); Roxbury Carpet Co. and Textile Workers of America, AFL-CIO, 73-2 Lab.Arb. Awards (CCH) 18521 (1973) (Summers, Arb.). Any such surviving benefit must necessarily find its genesis in the collective bargaining agreement. See John Wiley & Sons, supra, 376 U.S. at 550, 555, 84 S.Ct. at 914, 917; Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass, 404 U.S. 157, 181 n. 20, 92 S.Ct. 383, 398 n. 20, 30 L.Ed.2d 341 (1971); Local 1251, International Union, UAW v. Robertshaw Controls Co., 405 F.2d 29, 33 (2d Cir.1968); American Pad, supra, 372 F.2d at 427-28.

The enforcement and interpretation of collective bargaining agreements under § 301 is governed by substantive federal law. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). However, traditional rules for contractual interpretation are applied as long as their application is consistent with federal labor policies. Id. at 457, 77 S.Ct. at 918. See John Wiley, supra, 376 U.S. at 548, 84 S.Ct. at 913; Transportation-Communication Employees Union v. Union Pacific R.R., 385 U.S. 157, 160-61, 87 S.Ct. 369, 371-72, 17 L.Ed.2d 264 (1966); Kellogg Company v. NLRB, 457 F.2d 519, 524 (6th Cir.1972).

Many of the basic principles of contractual interpretation are fully appropriate for discerning the parties’ intent in collective bargaining agreements.

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716 F.2d 1476, 4 Employee Benefits Cas. (BNA) 2108, 114 L.R.R.M. (BNA) 2489, 1983 U.S. App. LEXIS 24117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-union-united-automobile-aerospace-and-agricultural-ca6-1983.