International Union, United Automobile, Aerospace & Agricultural Implement Workers v. Kelsey-Hayes Co.
854 F.3d 862
6th Cir.2017Background
- Retirees from Kelsey-Hayes’ Detroit plant (members of UAW) retired before the plant closed in 2001; their healthcare was governed by a 1998 CBA incorporating Supplement H and H-1.
- After the plant closing, parties executed a 2001 Plant Closing Agreement (PCA) that terminated much of the CBA but continued retiree healthcare obligations insofar as they existed "under applicable law and benefit plans (including those provisions contained in collective bargaining agreements)."
- Kelsey-Hayes continued retiree health coverage for a decade, then (2012–2014) shifted to an HRA/individual Medigap model and made unilateral plan changes; plan documents included language reserving the employer’s right to amend or terminate benefits.
- Retirees sued under Section 301 of the LMRA and ERISA, seeking declaration that retiree healthcare vested for life and injunctive relief restoring the group-insurance plan.
- District court granted partial summary judgment for retirees and entered a permanent injunction; the Sixth Circuit affirmed summary judgment, modified the injunction to exclude Northrop Grumman, and held the CBA ambiguous on duration so extrinsic evidence could show intent to vest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1998 CBA vested lifetime retiree healthcare benefits | CBA language and decades of bargaining history, prior cases, company conduct show parties intended lifetime, vested benefits | CBA’s durational clauses and incorporated general expiration mean benefits were not vested for life; Tackett prevents presuming vesting | Court: CBA ambiguous on duration; extrinsic evidence supports intent to vest; summary judgment for retirees affirmed |
| Whether retirees who retired before 2001 PCA are bound to arbitrate under PCA | Plaintiffs: retirees who already vested under 1998 CBA did not consent to PCA arbitration clause | Defendants: PCA’s arbitration clause applies to disputes about continued benefits | Court (earlier decision affirmed): retirees who retired before PCA cannot be compelled to arbitrate under PCA |
| Whether Northrop Grumman is liable as successor to TRW/TRW AHC | Plaintiffs: successor liability or equitable relief should bind Northrop | Defendants: no basis to treat Northrop as successor; it merely bought TRW name/asset | Court: insufficient evidence of successor liability; injunction modified to exclude Northrop Grumman |
| Scope/remedy — whether injunction restoring group-insurance is appropriate | Plaintiffs: equitable relief required to restore bargained-for lifetime group plan and prevent unilateral alteration | Defendants: shift to HRAs and carrier changes permissible under plan documents and employer reservation clauses | Court: injunction returning parties to status quo under 1998 CBA affirmed as to Kelsey-Hayes and TRW AHC (excluding Northrop) — employer must use bargaining procedures to change vested benefits |
Key Cases Cited
- M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (U.S. 2015) (courts must apply ordinary contract principles and may not infer lifetime vesting from silence)
- UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (previous Sixth Circuit inference favoring vesting; overturned by Tackett)
- Golden v. Kelsey-Hayes Co., 73 F.3d 648 (6th Cir. 1996) (earlier interpretation that similar CBA language supported lifetime retiree healthcare)
- Golden v. Kelsey-Hayes Co., 954 F. Supp. (E.D. Mich.) (district court decision finding intent for lifetime healthcare benefits)
- Gallo v. Moen, Inc., 818 F.3d 265 (6th Cir. 2016) (panel held materially similar CBA language unambiguous and did not vest lifetime benefits)
- Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th Cir. 1998) (vesting should not be inferred lightly; plan documents must show clear, express intent to vest)