Kelly v. Honeywell International, Inc.

233 F. Supp. 3d 302, 63 Employee Benefits Cas. (BNA) 1053, 2017 WL 522163, 2017 U.S. Dist. LEXIS 17463
CourtDistrict Court, D. Connecticut
DecidedFebruary 8, 2017
DocketCivil Case Number 3:16-cv-00543 (VLB)
StatusPublished
Cited by4 cases

This text of 233 F. Supp. 3d 302 (Kelly v. Honeywell International, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelly v. Honeywell International, Inc., 233 F. Supp. 3d 302, 63 Employee Benefits Cas. (BNA) 1053, 2017 WL 522163, 2017 U.S. Dist. LEXIS 17463 (D. Conn. 2017).

Opinion

MEMORANDUM OF DECISION ON THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT [DKTS. 44, 45]

Hon. Vanessa L. Bryant, United States District Judge

I. INTRODUCTION

This case is about the decision of Defendant Honeywell International, Inc. (“Honeywell”) to terminate Plaintiffs retirees’ full medical coverage benefits. Plaintiffs David Kelly, Richard Norko, Annette Dobbs, and Peter Dellolio (collectively, “Plaintiffs”) are retired union workers and a surviving spouse who allege that the termination of such benefits constitutes an anticipatory breach of the collective-bargaining agreement; a violation of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1002(1), 1132; and a breach of Honeywell’s fiduciary duty under ERISA, 29 U.S.C. § 1104(a). [Dkt. 1 (Pis.’ Complaint) ]. Before the Court are cross-motions for summary judgment. At issue is whether and under what circumstances the provisions of the CBA and the incorporated documents' create a vested right for retirees to obtain lifetimé medical coverage benefits.

II. STATEMENT OF FACTS

A. The Parties

Plaintiffs-David Kelly, Richard Norko, and Peter Dellolio are unioñ members who worked at a plant in Stratford, Connecticut (“Plant”) that produced a variety of aerospace products and gas turbine engines for Army helicopters and tanks. [Dkt. 45-2 (Def.’s Local Rule 56(a)(1) Statement), ¶ 1; Dkt. 54 (Pis.’ Local Rule 56(a)(2) Statement), ¶ 1; see Dkt. 44-2 (Pis.’ Local Rule 56(a)(1) Statement), Dkt. 55-1 (Def.’s Local Rule 56(a)(2) Statement), ¶ 5]. They retired with a pension and' medical coverage benefits between June 1997 and October 1998. [See Dkt. 44-2, ¶¶ 1-3; Dkt. 55-1, ¶¶ 1-3]. Plaintiff Annette Dobbs is the surviving spouse of a deceased union retiree who retired with a pension and medical benefits in July 1999. [Dkt. 44-2, ¶ 4; Dkt. 55-1, ¶4]. The Court certified a class consisting of ail Honeywell retirees who retired since October 28, 1994, whose medical insurance benefits Honeywell announced it intends to terminate., [See Dkt. 51 (Order Mot. Certify Class) ]. Class members are retired Plant maintenance and production workers represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”) Local 101Ó and office clerical and technical workers represented by UAW Local 376 (collectively, the “Union”).

[306]*306On September 30,1998, the Plant, which was owned by Honeywell, closed. [Dkt. 45-2, ¶ 42; Dkt. 54, ¶ 42]. Textron Corporation (“Textron”) owned the Plant from 1984 until AlliedSignal, Inc. (“AlliedSig-nal”) purchased the Plant on or about October 28, 1994. [Dkt. 45-2, ¶¶5-7; Dkt. 54, ¶¶ 5-7]. Honeywell subsequently acquired AlliedSignal, which operated the Plant until it closed. [Dkt. 44-2, ¶ 7; Dkt. 55-1, ¶ 7].

Honeywell currently provides the named Plaintiffs and putative class members their medical coverage benefits and has done so throughout their retirement. [See Dkt. 45-2, ¶ 8; 54, ¶ 8]. In December 2015 Honeywell announced that it would terminate such benefits on December 31, 2016, but pursuant to an agreement stemming from this litigation the benefits are currently scheduled to terminate on February 28, 2017. [See Dkt. 53 (Pis.’ Opp’n to Def.’s Mot. Summ. J.), at 1 n. 2].

B. The Agreements

The Plaintiffs’ rights to retiree health benefits are governed by three agreements: the Collective Bargaining Agreement (“CBA”), the Supplemental Agreement (“SA”), and the Effects Bargaining Agreement (“EBA”) (collectively, “the Agreements”), the pertinent provisions of which are set forth below. Textron and the Union negotiated and entered into the CBA, effective May 30, 1994.1 [See Dkt. 45-2, ¶ 9; Dkt. 54, ¶ 9; Dkt. 45-5 (Def.’s Mot. Summ. J. Ex. 3, Local 376/Textron CBA), at 4]. By this time, AlliedSignal was in discussions with Textron to purchase the Plant, and the sale was contingent upon a CBA negotiation acceptable to Al-liedSignal. [See Dkt. 45-2, ¶ 14; Dkt. 54, ¶ 14]. AlliedSignal representatives did not directly participate in the process as they communicated only with Textron representatives, but they ultimately approved the CBA and acquired Textron. [See Dkt. 45-2, ¶¶ 16-17; Dkt. 54, ¶¶ 16-17]. The relevant CBA provisions are as follows:

• Article XI, Group Insurance, Section 2: “The details and levels of the Group Insurance benefits herein-above specified are more fully described and incorporated in the Supplemental Agreement covering Insurance.” [Dkt. 45-5, at 46],
• Article XVIII, Effects Bargaining Agreement: “The Company and the Union have agreed to certain terms, conditions and benefits which shall be applicable in the event that the Company should sell the assets to a third-party purchaser. These commitments will be incorporated into an Effects Bargaining Agreement which shall be a part hereof as a supplement.” [Id. at 70].
• Article XIX, Duration, Section 1: “The Union agrees that during the term of the Agreement it will not make any demands, representation or requests to the Company or to any governing body to enter into collective bargaining negotiations with respect to employee pensions and other retirement programs, salaries, merit or promotional increases or any health welfare plan, inasmuch as these matters have been subject to the collective bargaining procedure in accordance with the law and duly [307]*307settled by this Agreement and not subject for further negotiations during its term or any addition, thereto.” [Id. at 71].
• Article XIX, Duration, Section 3: “Except as otherwise provided herein, this Agreement shall become effective May 30, 1994, and shall remain in effect, up to and including June 6, 1997, and shall automatically renew itself from year to year thereafter unless written notice to terminate or amend the Agreement is given by either party to the other party at least sixty (60) days prior to its expiration or any. annual renewal thereof.” [Id. at 72].
• Article XIX, Duration, Section 3(b): “In the event that negotiations for an amended Agreement shall continue beyond the expiration of the term of .this Agreement, this Agreement shall continue in-full force and effect, provided, however, that, either party may then terminate this Agreement upon ten (10) days written notice to the other party.” [Id. at 73].

As referenced in the CBA, Textron and the Union negotiated the SA conferring specific Group Insurance benefits, which included medical health care benefits offered to employees and retirees. [See Dkt. 45-2, ¶¶ 28, 33; Dkt. 54, ¶28, 33]. Allied-Signal agreed to assume the provisions of the SA. [Dkt. 45-2, ¶ 37; Dkt. 54, ¶ 87]. The relevant SA provisions are as follows:

• Article XX, General Provisions, Section 17(d): “If the Collective Bargaining Agreement is cancelled in whole or in part benefits hereunder will immediately cease.” [Dkt. 45-7 (Def.’s Mot. Summ. J.- Ex. 5, Local 376/Textron'SA), at 78].

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233 F. Supp. 3d 302, 63 Employee Benefits Cas. (BNA) 1053, 2017 WL 522163, 2017 U.S. Dist. LEXIS 17463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelly-v-honeywell-international-inc-ctd-2017.