Hobert Tackett v. M&G Polymers USA, LLC
733 F.3d 589
| 6th Cir. | 2013Background
- Retirees of the Apple Grove plant (represented by USW Local 644) sued M&G and related plans after M&G began requiring retiree health-care contributions in 2006; Plaintiffs sought enforcement of lifetime, contribution-free retiree health benefits promised in earlier collective bargaining/P&I agreements.
- The operative pre-2005 P&I/CBAs promised a “full Company contribution” for retirees meeting age/service thresholds; separate “cap” side letters (1991, 1994, 1997, LOU 2003-6) limited employer contributions in some master agreements but were not printed in local P&I booklets.
- District court, after a bench trial, found (1) the cap letters did not apply to Apple Grove’s local agreements and (2) pre-August 9, 2005 retirees vested in lifetime contribution-free health benefits; it entered a permanent injunction restoring retirees to post-2007 plan versions without contribution requirements.
- Defendants appealed the liability and injunction; Plaintiffs cross-appealed the scope of the injunction (they wanted reinstatement to the pre-2007 plan versions rather than current plan designs).
- Sixth Circuit affirmed: it reviewed factual findings for clear error, legal conclusions de novo, and affirmed that cap letters were not part of Apple Grove CBAs, that pre-8/9/2005 retirees vested, and that the district court did not abuse discretion in reinstating retirees to the current post-2007 plan designs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether retirees obtained a vested, lifetime right to contribution-free retiree health benefits under the pre-2005 CBAs/P&I | The “full Company contribution” language and linkage to pension benefits show intent to vest; absence of cap letters in local booklets means no limitation | Cap side letters and SPDs limited company liability and applied to Apple Grove, preventing vesting | Vesting found for retirees who retired before Aug. 9, 2005; district court’s factual finding that cap letters did not apply was not clearly erroneous, so vesting stands |
| Whether cap/side letters (caps) were part of Apple Grove’s local CBAs | Plaintiffs: cap letters were part of master agreements but not adopted by the local, so they don’t limit local retirees | M&G: master cap letters and subsequent LOU 2003-6 applied to Apple Grove and bind retirees, including via union practice and post-impasse implementation | Court weighed extrinsic evidence and credibility; concluded caps were not incorporated into Apple Grove agreements (clear‑error review) |
| Whether M&G could unilaterally implement LOU 2003-6 or apply caps to pre-2005 retirees | Plaintiffs: retiree benefits are permissive subjects; unilateral post-impasse changes cannot lawfully alter vested retiree rights | M&G: portions of a final offer can be implemented post-impasse and thus applied to retirees | Court: unilateral implementation was improper for permissive retiree benefits; LOU 2003-6 could not be applied to pre-8/9/2005 vested retirees |
| Proper scope of equitable relief — whether reinstatement must be to pre-2007 plan designs | Plaintiffs: vested benefits include specific plan terms; reinstatement should be to the pre-2007 Comprehensive/Catastrophic plan versions | Defendants: reasonable plan-design changes are permissible even for vested benefits; district court should place retirees in current plan versions | Court: affirmed injunction but upheld district court’s exercise of discretion to place retirees in current (post-2007) plan designs as changes were "reasonable" under precedent |
Key Cases Cited
- Tackett v. M & G Polymers USA, LLC, 561 F.3d 478 (6th Cir. 2009) (earlier panel discussion of CBA language indicating potential intent to vest retiree health benefits)
- Noe v. Polyone Corp., 520 F.3d 548 (6th Cir. 2008) (health-care welfare plans vest only if parties intended vesting)
- UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (framework for determining whether retiree benefits vest beyond the CBA term)
- Reese v. CNH America LLC, 574 F.3d 315 (6th Cir. 2009) (vested retiree benefits may be subject to reasonable plan-design changes consistent with current-employee benefits)
- Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157 (U.S. 1971) (union cannot unilaterally modify vested retiree benefits without retirees’ consent)