M&G Polymers United States, LLC v. Tackett
135 S. Ct. 926
| SCOTUS | 2015Background
- M&G Polymers USA purchased Point Pleasant plant in 2000 and entered a master CBA and P&I Agreement with the Union.
- P&I Agreement provided that certain retirees and dependents would receive full company contributions toward health care; benefits were for the duration of the agreement and renegotiable in three years.
- After expiration, M&G required retirees to contribute to health care costs; retirees sued alleging vested lifetime health-care benefits.
- District Court dismissed; Sixth Circuit reversed relying on Yard-Man to infer vesting from contract context and negotiations.
- On remand, District Court ruled for retirees; Sixth Circuit affirmed, applying Yard-Man-style inferences across industries.
- Supreme Court vacated and remanded to apply ordinary contract-law principles, rejecting Yard-Man inferences as incompatible with contract law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yard-Man inferences align with ordinary contract law | Retirees rely on Yard-Man-like inferences to vest lifetime benefits. | Yard-Man inferences reflect ordinary contract practice in CBAs. | Yard-Man inferences rejected; apply ordinary contract-law principles. |
| What interpretive framework governs CBA-rich welfare plans post-expiration | Contract terms and context support vesting of retiree health benefits. | Welfare plans under ERISA are largely flexible; termination is allowed after expiration. | Interpret under ordinary contract-law rules, not presumptive vesting. |
Key Cases Cited
- International Union, United Auto, Aerospace, & Agricultural Implement Workers of Am. v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (inferred vesting from context in retiree-benefit disputes)
- Textile Workers v. Lincoln Mills of Ala., 353 U.S. 448 (U.S. 1957) (contract interpretation governs with intent control)
- Litton Fin. Printing Div., Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 190 (U.S. 1991) (contractual obligations cease at termination absent explicit terms)
- Black & Decker Disability Plan v. Nord, 538 U.S. 822 (U.S. 2003) (employers have leeway to design welfare plans; focus on written terms)
- Stolt-Nielsen S. A. v. Animal-Feeds Int’l Corp., 559 U.S. 662 (U.S. 2010) (contract interpretation requires clear agreement of the parties)