Cole v. Meritor, Inc., 855 F.3d 695

Background

Rockwell (later Meritor) and the UAW negotiated repeating three-year collective bargaining agreements (CBAs) from 1968–2000 that included retiree healthcare provisions (Exhibit B/Exhibit B-1); language promised that health coverages an employee had at retirement “shall be continued thereafter.”
Each CBA also contained a general durational clause tying the Insurance Agreement/Program to the existence of the current CBA (i.e., benefits continued only while the CBA remained in effect).
In 2003 Meritor reduced retiree benefits and in 2005 announced plans to eliminate retiree healthcare, prompting class litigation by the UAW and ~2,900 retirees under §301 LMRA and ERISA §502(a)(1)(B).
The district court granted a preliminary injunction and later permanent injunctive relief, concluding the CBAs unambiguously vested lifetime retiree healthcare benefits; this court initially affirmed in Cole v. ArvinMeritor, Inc.
After the Supreme Court’s decision in M & G Polymers v. Tackett and this court’s decision in Gallo v. Moen, the panel granted rehearing, applied Tackett/Gallo contract principles, and reversed the district court, holding the CBAs did not vest lifetime retiree health benefits.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CBAs vested lifetime retiree healthcare benefits	The CBAs’ “shall be continued thereafter” language and historical practice show intent to provide lifetime benefits	The durational clauses tying the Insurance Agreement to each CBA limit benefits to the life of the CBA; no explicit lifetime promise	Reversed: CBAs unambiguous under ordinary contract principles and durational clauses prevent vesting for life; no lifetime guarantee
Whether Yard‑Man inference required reading retiree benefits as vested	Yard‑Man and circuit precedent support an inference of vesting when benefits accrue at retirement	Yard‑Man was wrongly applied and was abrogated by Tackett; ordinary contract rules control	Yard‑Man inference abrogated by Tackett; cannot presumptively infer lifetime vesting
Whether extrinsic evidence (historic practice, internal statements, hypothetical examples) may be used to show vesting	Extrinsic evidence shows parties expected lifetime continuation and demonstrates intent	Because contract is unambiguous, parol/extrinsic evidence is inappropriate; the durational clause controls	Contract deemed unambiguous on its face; no need to consider extrinsic evidence; durational clause governs
Whether differences in language (explicit lifetime pension vs. absent lifetime language for healthcare) imply non‑vested healthcare	N/A — plaintiffs argued context implies lifetime	Defendant argued the contrast shows parties knew how to promise life benefits when intended; absence is meaningful	Held that explicit pension lifetime language suggests healthcare lacks similar lifetime guarantee; different wording matters

Key Cases Cited

Yard‑Man, Inc. v. International Union, 716 F.2d 1476 (6th Cir. 1983) (introduced inference favoring vesting of retiree benefits)
Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571 (6th Cir. 2006) (applied Yard‑Man to hold general durational clauses do not terminate retiree benefits absent specific language)
Noe v. PolyOne Corp., 520 F.3d 548 (6th Cir. 2008) (applied circuit precedent on retiree benefit vesting)
Cole v. ArvinMeritor, Inc., 549 F.3d 1064 (6th Cir. 2008) (this court’s earlier decision holding retirees had vested lifetime healthcare benefits)
M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015) (Supreme Court: Yard‑Man inference invalid; ordinary contract interpretation governs retiree benefits)
Tackett v. M & G Polymers USA, LLC, 811 F.3d 204 (6th Cir. 2016) (remanded; discussed ordinary contract principles for interpreting CBAs)
Gallo v. Moen Inc., 813 F.3d 265 (6th Cir. 2016) (applied Tackett; similar CBAs held not to vest lifetime retiree healthcare)
Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (contracts ordinarily terminate with bargaining agreement unless explicit language indicates otherwise)
Stolt‑Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (contract interpretation principle: parties’ intent controls)