Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Whirlpool Corp. retirees won a major battle in their long-running quest for company-provided health benefits as a federal judge blocked the company from raising premiums, deductibles, and other cost-sharing requirements ( Zino v. Whirlpool Corp. , N.D. Ohio, No. 5:11-cv-01676-BYP, 7/27/17 ).
After previously finding that Whirlpool owed lifetime health benefits to many of its retirees, the judge ruled July 27 that Whirlpool couldn’t fulfill this obligation if it carried out its plan to raise premiums, deductibles, copayments, and out-of-pocket maximums. The parties to the relevant collective bargaining agreements couldn’t have intended to give Whirlpool latitude to make these modifications, because the agreements expressly established specific premiums, deductibles, and other terms while providing no mechanism for altering them, the judge said.
Whirlpool argued that prior decisions granting the retirees vested lifetime health benefits had to be reconsidered in light of the U.S. Court of Appeals for the Sixth Circuit’s 2016 decision denying similar benefits to retirees of Moen Inc. The judge disagreed in a separate order issued July 27, saying that retiree benefit disputes often turn on language in specific collective bargaining agreements that must be read in context, making it difficult to draw clear parallels from one case to another.
The two rulings are examples of courts grappling with the U.S. Supreme Court’s 2015 decision in M&G Polymers USA, LLC v. Tackett, which held that disputes over collectively bargained retiree health benefits should be resolved through ordinary principles of contract interpretation. That was a departure from the “thumb on the scale” in favor of retirees previously used by some courts, particularly the Sixth Circuit.
The Sixth Circuit recently signaled that the proper inquiry is fact-specific and will depend largely on the language of the relevant bargaining agreements. In April, the court issued a trio of decisions in retiree health disputes involving Kelsey-Hayes Co., CNH Industrial N.V., and Meritor Inc. Those cases—all decided on the same day—had different outcomes that appeared driven largely by differences in bargaining agreement language.
In rejecting Whirlpool’s proposed modifications to retiree health benefits, the judge followed two Sixth Circuit rulings in the dispute over health benefits for CNH retirees. Those decisions—from 2009 and 2012—consider how and when an employer can modify retiree health benefits that have vested pursuant to a bargaining agreement.
Judge Benita Y. Pearson of the U.S. District Court for the Northern District of Ohio wrote the decision. In addition to blocking Whirlpool’s proposed benefit cuts through a permanent injunction, Pearson ordered the company to reimburse retirees for any out-of-pocket costs they had to pay as a result of the cuts.
Feinstein Doyle Payne & Kravec, B Zimmerman Law, and Allen Schulman & Associates represented the retirees. Baker & McKenzie and Black McCuskey Souers & Arbaugh represented Whirlpool.
To contact the reporter on this story: Jacklyn Wille 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)