John Gallo v. Moen Incorporated, 813 F.3d 265

Background

Moen and the UAW negotiated successive collective bargaining agreements (CBAs) from 1983–2005 providing retiree health benefits (hospitalization/medical coverage and Medicare Part B reimbursements) for employees who retired from Moen’s Elyria, Ohio plant.
CBAs were generally three-year agreements; earlier retirees (pre‑March 1, 1996) received no‑cost coverage, later retirees paid frozen co‑premiums or received specified Part B reimbursements.
The final CBA (2005) expired when Moen shut the plant in 2008; a Closure Effects Agreement stated healthcare “shall continue ... as indicated under the [final] Collective Bargaining Agreement.”
Moen maintained retiree coverage for several years after closure but reduced benefits in March 2013 (eliminating Part B reimbursements for Medicare‑eligible retirees and increasing cost sharing for others).
A class of ~200 retirees sued claiming the CBAs and plant‑closing agreement vested lifetime, unalterable retiree healthcare; the district court granted summary judgment for plaintiffs under the Yard‑Man line of cases and awarded fees.
On appeal, the Sixth Circuit majority reversed consistent with the U.S. Supreme Court’s decision in M & G Polymers USA, LLC v. Tackett, holding the CBAs did not unambiguously vest lifetime healthcare and vacating the fee award.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CBAs and plant‑closing agreement created vested, lifetime retiree healthcare benefits	CBAs’ language ("continued...will be provided", tie to "past pensioners", frozen co‑premiums, and plant‑closing "shall continue") shows intent to vest; extrinsic evidence (employer statements, conduct) supports vesting	CBAs are time‑limited (general durational clause); no express lifetime commitment; reservation‑of‑rights and incorporation by reference show benefits ran only "for the life of" each CBA	Held for Moen: CBAs do not unambiguously vest lifetime retiree healthcare; ordinary contract rules (per Tackett) require no inference of perpetual benefits absent clear contractual language
Proper role of Yard‑Man inferences post‑Tackett	Plaintiffs rely on prior Sixth Circuit Yard‑Man inferences (tying, continuity) to support vesting	Defendant argues Tackett disapproved Yard‑Man; courts must apply ordinary contract principles without presumptions favoring vesting	Held: Tackett repudiates Yard‑Man inferences; courts must interpret CBAs under ordinary contract rules and not infer lifetime vesting from silence or general tie to pensions
Effect of general durational clause on retiree benefit duration	Plaintiffs: absence of a specific durational limit in retiree‑health provisions (while other provisions have limits) implies intended permanence	Defendant: general durational clause of three‑year CBAs governs unspecified provision duration; no "elephants in mouseholes"—time‑limited agreements should not be read to create lifetime promises	Held: General durational clause controls; retiree health terms are limited by the CBA term absent explicit language committing to lifetime benefits
Admissibility/weight of extrinsic evidence (employer conduct/statements) to show vesting	Plaintiffs: extrinsic evidence (statements, enrollment forms, continued payment after closure, employees taking reduced pensions to obtain benefits) creates ambiguity and supports vesting	Defendant: contract language is primary; no ambiguity—extrinsic evidence cannot override clear written terms; employer conduct consistent with reservable rights	Held: Majority: four‑corners analysis dispositive; contract unambiguous so extrinsic evidence not considered; dissent would find ambiguity and admit extrinsic evidence to resolve intent

Key Cases Cited

M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015) (collective‑bargaining agreements interpreted by ordinary contract principles; rejects Yard‑Man vesting inferences)
UAW v. Yard‑Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (prior Sixth Circuit line that inferred lifetime vesting of retiree health benefits from CBA language)
Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (general durational clause governs unless contract indicates otherwise; contractual obligations ordinarily cease upon agreement termination)
Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir. 1998) (refused to infer lifetime retiree benefits from ambiguous/non‑collective contracts)
Heimeshoff v. Hartford Life & Accident Ins. Co., 134 S. Ct. 604 (2013) (enforce written terms of benefit plans)
UAW v. Skinner Engine Co., 188 F.3d 130 (3d Cir. 1999) (interpreting CBA durational clauses and retiree benefits in light of contract language)
Senn v. United Dominion Indus., Inc., 951 F.2d 806 (7th Cir. 1992) (examining durational clauses and vesting of retiree benefits)