Noe v. PolyOne Corp.

520 F.3d 548, 43 Employee Benefits Cas. (BNA) 1545, 183 L.R.R.M. (BNA) 2997, 2008 U.S. App. LEXIS 5763, 2008 WL 723769
Court of Appeals for the Sixth Circuit·Decided March 19, 2008·No. 07-5068·Published·Cited by 68 cases

Opinions

McKEAGUE, J., delivered the opinion of the court, in which FORESTER, D.J., joined, SUTTON, J., (pp. 564-69), delivered a separate opinion concurring in part and dissenting in part.

OPINION

McKEAGUE, Circuit Judge.

This is a retiree health benefits case, in which the court is asked to determine [551] whether the parties to various labor agreements intended for retiree health benefits to vest such that any termination of those benefits constitutes a violation of § 301 of the Labor Management Relations Act (“LMRA”). The district court granted summary judgment for defendant-employer PolyOne Corp. after concluding that the labor agreements in question were unambiguous and established no intent to vest retiree health benefits. Having conducted a thorough review of the record and the applicable law, we arrive at a different conclusion and VACATE the district court’s judgment.

I. BACKGROUND

Russell Bowman, William Duncan, Nancy Hood, Julius Noe, Ray Reynolds, and Anna May Wilder, (“Plaintiffs”) are all retirees or the surviving spouse of a retiree from B.F. Goodrich Co.’s Geon Vinyl Division (“BFG”), which through a series of transactions became PolyOne Corp., the defendant in this case (“PolyOne”). Plaintiffs or their deceased spouses all retired between 1979 and 1990 from BFG’s Louisville, Kentucky, facility. While employed with BFG, Plaintiffs were represented in the collective bargaining process primarily by the Distillery, Rectifying, Wine and Allied Workers’ International Union of America, Local No. 72 (“Union”). During this time period, the Union and BFG entered into various collective bargaining agreements, none of which specifically addressed the issue of health benefits. Also during this period, BFG negotiated a series of agreements with other unions that represented employees working at facilities outside of Kentucky. These other agreements, which were entitled “Agreements on Employee Benefit Programs” (“EBAs”), provided employee and retiree health benefits to the applicable group of employees. Per the terms of the EBAs, retirees were not required to contribute to their health insurance premiums, they were reimbursed for Medicare Part B, and they paid $1.00 for each prescription medication.

Plaintiffs maintain that the health benefits provided by the EBAs were extended to them via a Memorandum of Agreement (“MOA”) entered into by Plaintiffs’ union and BFG. Effective in 1988, BFG replaced the EBAs with a Flexible Benefit Program (“Flex Program”). The Flex Program slightly changed the health care coverage available for active employees and those who retired after August 1988. It is undisputed that Plaintiffs received the health benefits described in the EBAs or the Flex Program until March 2006, when PolyOne ceased reimbursing Plaintiffs’ Medicare Part B premiums, began requiring Plaintiffs to contribute towards their insurance premiums, and instituted much higher prescription drug co-pays. Believing that Po-lyOne’s conduct violated the EBAs and the Flex Program, Plaintiffs filed the instant action under § 301 of the LMRA. Finding that the EBAs and the Flex Program did not manifest an intent to vest retiree health benefits, the district court granted summary judgment for PolyOne. Plaintiffs timely appealed.

II. ANALYSIS

A. Standard of Review and Applicable Law

This court reviews a district court’s grant of summary judgment de novo. Nichols v. Moore, 477 F.3d 396, 398 (6th Cir.2007). Likewise, de novo review applies to questions of contract interpretation. Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 577 (6th Cir.), cert. denied, — U.S. -, 127 S.Ct. 554, 166 L.Ed.2d 410, and, 127 S.Ct. 555, 166 L.Ed.2d 410 (2006).

[552] There are two types of employee benefit plans: pension plans and welfare benefit plans. Id. at 578. While pension plans are subject to mandatory vesting, welfare benefit plans are not. Maurer v. Joy Technologies., Inc., 212 F.3d 907, 914 (6th Cir.2000). Retiree health benefit plans, such as those involved here, are welfare benefit plans; thus, vesting only occurs if the parties so intended when they executed the applicable labor agreements. Id. A court may find vested rights “under a CBA even if the intent to vest has not been explicitly set out in the agreement.” Id. at 915. If the rights to health coverage have vested, then the unilateral termination of the coverage violates § 301 of the LMRA. Yolton, 435 F.3d at 578. On the other hand, an employer is free to terminate any unvested welfare benefits upon the expiration of the relevant CBA. Id.

The seminal case for determining whether the parties to a CBA intended benefits to vest is UAW v. Yard-Man, 716 F.2d 1476, 1479 (6th Cir.1983). Under Yard-Man, basic rules of contract interpretation apply, meaning that courts must first examine the CBA language for clear manifestations of an intent to vest. Id. Furthermore, each provision of the CBA is to be construed consistently with the entire CBA and “the relative positions and purposes of the parties.” Id. The terms of the CBA should be interpreted so as to avoid illusory promises and superfluous provisions. Id. at 1480. Our decision in Yard-Man also explained that “retiree benefits are in a sense ‘status’ benefits which, as such, carry with them an inference ... that the parties likely intended those benefits to continue as long as the beneficiary remains a retiree.” Id. at 1482. With regard to the “Yard-Man inference,” later decisions of this court have clarified that Yard-Man does not create a legal presumption that retiree benefits are interminable. Yolton, 435 F.3d at 579. Rather, Yard-Man is properly understood as creating an inference only if the context and other available evidence indicate an intent to vest. Id.

When an ambiguity exists in the provisions of the CBA, then resort to extrinsic evidence may be had to ascertain whether the parties intended for the benefits to vest. Int’l Union United Auto. Aerospace & Agric. Implement Workers of Am. v. BVR Liquidating, Inc., 190 F.3d 768, 774 (6th Cir.1999). If an examination of the available extrinsic evidence fails to conclusively resolve the issue and a question of intent remains, then summary judgment is improper. Int’l Union, United Mine Workers of Am. v. Apogee Coal Co., 330 F.3d 740, 744 (6th Cir.2003). Having provided the broad analytical framework, we now turn to the task of parsing the language of the various agreements involved in this case.

Free access — add to your briefcase to read the full text and ask questions with AI

Noe v. PolyOne Corp., 520 F.3d 548, 43 Employee Benefits Cas. (BNA) 1545, 183 L.R.R.M. (BNA) 2997, 2008 U.S. App. LEXIS 5763, 2008 WL 723769 (6th Cir. 2008).

520 F.3d 548 (Noe v. PolyOne Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Danny Donohue v. Andrew M. Cuomo
980 F.3d 53 (Second Circuit, 2020)
Rita Kendzierski v. County of MacOmb
931 N.W.2d 604 (Michigan Supreme Court, 2019)
Rebecca Cooper v. Honeywell Int'l, Inc.
884 F.3d 612 (Sixth Circuit, 2018)
CNH Industrial N. v. v. Reese
583 U.S. 133 (Supreme Court, 2018)
Watkins v. Honeywell International Inc.
875 F.3d 321 (Sixth Circuit, 2017)
UAW v. Kelsey-Hayes Co.
Sixth Circuit, 2017
Craig Serafino v. City of Hamtramck, Mich.
707 F. App'x 345 (Sixth Circuit, 2017)
Reese v. CNH Industrial N.V.
854 F.3d 877 (Sixth Circuit, 2017)
Cole v. Meritor, Inc.
855 F.3d 695 (Sixth Circuit, 2017)
John Gallo v. Moen Incorporated
813 F.3d 265 (Sixth Circuit, 2016)
Reese v. CNH Industrial N.V.
143 F. Supp. 3d 609 (E.D. Michigan, 2015)
International Union v. Kelsey-Hayes Co.
130 F. Supp. 3d 1111 (E.D. Michigan, 2015)
M&G Polymers United States, LLC v. Tackett
135 S. Ct. 926 (Supreme Court, 2015)
Ronald A. Chisholm, Ltd. v. American Cold Storage, Inc.
590 F. App'x 593 (Sixth Circuit, 2014)
Zino v. Whirlpool Corp.
47 F. Supp. 3d 561 (N.D. Ohio, 2014)
Sloan v. Borgwarner, Inc.
1 F. Supp. 3d 743 (E.D. Michigan, 2014)