Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Honeywell International Inc. violated ERISA by announcing it would terminate lifetime full medical coverage to retirees of a Stratford, Conn., company plant, a federal judge ruled ( Kelly v. Honeywell Int’l, Inc. , 2017 BL 37858, D. Conn., No. 3:16-cv-00543-VLB, 2/8/17 ).
The language “for the life of the retiree or surviving spouse,” included in collective bargaining agreements, unambiguously provided a contractually vested right to lifetime full medical coverage benefits, Judge Vanessa L Bryant of the U.S. District Court for the District of Connecticut held Feb. 8.
People who retired before the expiration of the CBA are entitled to lifetime benefits, but those who retired after the expiration date will move to trial to determine whether their benefits were vested at the time they retired and if the company breached its fiduciary duties under the Employee Retirement Income Security Act, Bryant said.
The decision is the latest development in Honeywell’s efforts to cut lifetime health benefits to its retirees. Honeywell’s 2015 announcement was followed by at least three other lawsuits in Ohio and Michigan. The retirees’ challenges have had mixed results with federal judges.
A federal judge in the Northern District of Ohio held in December that the cuts didn’t violate the retirees’ CBAs.
However, a federal judge in Michigan entered a preliminary injunction barring Honeywell from cutting health benefits for retirees who had worked at the company’s Boyne City, Mich., plant. Another federal judge in the Southern District of Ohio allowed retirees from a Greenville, Ohio, plant to move forward with their lawsuit against the company.
Bryant took notice of other pending challenges against Honeywell and compared the CBAs at issue in those cases with the CBAs applicable to the Stratford retirees. She “recognized” that the agreements in this case didn’t contain the same language as those referenced in the other Honeywell cases, also noting that “some CBAs may be more favorable to employees than others.”
The agreements that covered the Stratford retirees unambiguously vested medical coverage benefits for life, Bryant said. However, the phrase “all past and future retired employees and surviving spouses shall continue to receive” was ambiguous as to whether the benefits vested prior to or after retirement, she said.
In evaluating some extrinsic evidence, Bryant said that because such evidence was insufficiently developed, it couldn’t rule on whether people who retired after the agreements expired on 1997 had vested rights.
Livingston Adler Pulda Meiklejohn & Kelly and William Wertheimer represent the retirees. Morgan Lewis & Bockius LLP represents Honeywell.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)