Supreme Court Hears Case Over Retirees’ Health Benefits

On Monday the Supreme Court of the United States was asked to decide whether a chemical company could cut the health benefits of its retired workers. 

Justice Samuel Alito said he expected the issue would have been resolved in the company’s contract with the union. “Why is it that in this collective bargaining agreement and apparently many others there isn’t anything explicit one way or the other?” 

Justice Antonin Scalia said the upshot of the contract’s failure to address the matter was that one side or the other would soon be unhappy.  “Both sides knew it was left unaddressed, so, you know, whoever loses deserves to lose for casting this upon us when it could have been said very clearly in the contract.”

The case, M&G Polymers USA v. Tackett, concerned a union contract at a chemical plant in West Virginia.  The collective bargaining agreement did not directly state whether health benefits for retirees would vest.  The Sixth Circuit Court of Appeals ruled for the retirees, in favor of vesting. 

This leaves the justices with decision to return the case to the Sixth Circuit for reconsideration or decide for themselves what the collective bargaining agreement meant. 

While Justice Anthony Kennedy was the leading proponent of the ordinary contract principles, the other justices appeared to side with the retired workers.  “There are all these indicia that vesting was intended,” Justice Ruth Bader Ginsburg stated.  Justice Scalia agreed, “It is a reasonable assumption, call it a presumption if you like, that any promise to pay those benefits continues after the termination of the union contract.”

See Adam Liptak, Supreme Court Weighs Case Over Cuts to Retirees’ Health Benefits, The New York Times, Nov. 10, 2014. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.