Pacheco v. Honeywell, Int'l Inc.

289 F. Supp. 3d 1011
CourtDistrict Court, D. Maine
DecidedJanuary 31, 2018
DocketCivil No. 17–5048 (SRN/HB)
StatusPublished

This text of 289 F. Supp. 3d 1011 (Pacheco v. Honeywell, Int'l Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacheco v. Honeywell, Int'l Inc., 289 F. Supp. 3d 1011 (D. Me. 2018).

Opinion

SUSAN RICHARD NELSON, United States District Judge

Plaintiffs Augustine Pacheco and Vicki Hansen filed this suit on November 7, 2017, on their own behalf and on behalf of similarly-situated retirees, under the Employment Retirement Income Security Act (ERISA) and the Labor Management Relations Act (LMRA). They assert claims against their former employer Honeywell International, Inc. ("Honeywell") for breaches of certain collective bargaining agreements ("CBAs") that they allege contain collectively-bargained promises of Honeywell-sponsored healthcare benefits until age 65 for employees who took early retirement under the Honeywell-sponsored benefits plan. (See Compl. ¶¶ 103-39 [Doc. No. 1].)

Shortly after filing this suit, Plaintiffs moved for injunctive relief, seeking an order prohibiting Honeywell from terminating their healthcare coverage, and their families' coverage, which was set to expire January 1, 2018, during the pendency of this litigation. (See Pls.' Mot. for Prelim. Inj. at 1 [Doc. No. 18].) Following an expedited briefing schedule and a December 21, 2017 motion hearing, the Court issued *1014a provisional ruling on December 29, 2017, granting Plaintiffs' request for a preliminary injunction through January 31, 2018. (See Dec. 29, 2017 Order [Doc. No. 39].) The ruling was provisional because the Court had only four business days between Christmas and New Years in which to issue the order. The Court stated that it would thoroughly review the record and the pertinent authorities and issue an amended order no later than January 31, 2018. (See id. at 32.)

Now, having had the opportunity to conduct its thorough review, the Court issues this Amended Order. For the reasons set forth in the December 29, 2017 Order, incorporated herein, and below, Plaintiffs' Motion for a Preliminary Injunction is granted, pending an adjudication on the merits of Plaintiffs' claims or further order of this Court after notice and hearing.

I. BACKGROUND

Plaintiffs Pacheco and Hansen are former members of the production and maintenance collective bargaining unit at Honeywell's Minnesota facilities and were represented by the International Brotherhood of Teamsters Local 1145 ("the Union"). (See Compl. ¶ 5.) Defendant Honeywell is a Fortune 100 company, with operations in approximately 1,250 cities throughout the world, with sales of approximately $38 billion. (Id. ¶ 10.)

A. Factual History

In 2007 and 2010, Honeywell entered into CBAs with the Union, which included pension and welfare provisions for employees who elected to take: (1) "normal retirement" at age 65 or later; or (2) "early retirement," for employees with at least 15 years of credited service, who were at least 55 years old, but younger than 65, at the time of retirement. (Id. ¶ 14; Ex. 3 to Pls.' Mot., Art. 24, § 7 (2007 CBA), Ex. 5 to Pls.' Mot., Art. 24, § 7 (2010 CBA).)1 Employees who took early retirement received a reduced pension for the rest of their lives, based on a formula that accounted for the employees' age and years of service. (See Compl. ¶¶ 15-16.) At issue here are the healthcare benefits available to the employees who took early retirement during the periods of the 2007 and 2010 CBAs.

1. Pre-2007 CBA

Plaintiffs allege that for more than 30 years prior to the 2007 CBA, Honeywell sponsored and provided healthcare benefits for eligible early retirees, starting from the date of retirement and continuing after the expiration of the CBA in effect when retirement began, until the retiree reached age 65. (Id. ¶ 20.) These benefits, Plaintiffs allege, also extended to the retiree's spouse or surviving spouse until age 65, and to the retiree's dependent children until age 26. (Id. )

In support of these allegations, Plaintiffs point to a 2005-2006 document entitled "Frequently Asked Questions and Answers Regarding Retirement." (See id. ¶ 21.) Among the information in the FAQ documents, Honeywell provided the following:

Q: When I reach age 65 my medical coverage ceases for myself. I have a spouse and dependents, what medical coverage will they have?
A: Medical coverage that you had selected for your spouse and eligible dependents continues until your spouse reaches age 65.

(Ex. 1 to Pls.' Mot. (FAQ at 7).)

Plaintiffs also identify a 2001 agreement between Honeywell and the Union concerning severance in the event of restructuring or relocating which also incorporated retiree healthcare benefits. A section entitled "Insurance Continuation" provides that terminated employees who are eligible *1015to retire "will be eligible for retiree medical in accordance with the terms of the applicable plan." (Ex. 2 to Pls.' Mot. (2001 Agmt. at 68).) In addition, in a section labeled "Pension Benefits," it states: "Employees shall receive Pension benefits in accordance with the provisions of the Pension Plan, including retiree medical." (Id. ) Plaintiffs contend that this agreement remains in effect. (See Compl. ¶ 22.)

2. The 2007 CBA

The healthcare benefits provisions in the 2007 CBA are found in Article 24. In Section 7 of Article 24, entitled "Retiree Health Care (Pre 65 only)" Honeywell promised that it "will provide" certain contributions to the healthcare expenses for its pre-65 retirees, their dependents, and surviving spouses. (See Ex. 3 to Pls.' Mot., Art. 24, § 7.) It further stated, "The Company does not provide healthcare benefits for Local 1145 retirees after age 65." (Id. )

The first sentence of Section 1 of Article 24 stated that these insurance and benefit plans would be implemented and maintained "as specified by the time periods outlined below for the duration of this Agreement." (Id., Art. 24, § 1.) The 2007 CBA also contained a general durational clause, stating, "This Agreement shall become effective February 1, 2007 and shall remain in force and effect up to midnight January 31, 2010." (Id., Art. 35, § 1.)

Subsequent to the 2007 CBA, Honeywell appears to have provided its employees with "answers" to questions about the 2007 CBA retiree healthcare coverage, including the following:

Q: What healthcare coverage is provided to retirees?
A: Local 1145 retirees are eligible for healthcare coverage through Honeywell until age 65. After age 65[,] they are eligible for Medicare with no subsidy from Honeywell.

(Ex. 4 to Pls.' Mot. (Answers to Question at 2).) In the same document, Honeywell informed its employees that limits on its annual contributions to retiree healthcare benefits were not expected to "hit until 2018," eight years after the 2010 expiration of the 2007 CBA. (Id. )

3. The 2010 CBA

The nearly identical healthcare provisions for pre-65 retirees in the 2010 CBA are likewise found in Article 24 of that agreement.

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