Quesenberry v. VOLVO TRUCKS RETIREE HEALTHCARE
651 F.3d 437
| 4th Cir. | 2011Background
- Volvo and NRV workers had a long history of retiree health benefits under successive CBAs; the 2005 CBA introduced a VEBA to cap retiree-health costs and outlined a unilateral-change mechanism; VEBA funding included a $3.943 million deposit at contract end and projected exhaustion timing; the Cost paragraph allowed potential premium charges and renegotiation if VEBA exhausted within one year; Volvo announced unilateral retiree-benefit restructuring in 2009, triggering litigation; district court entered judgment enforcing restoration of benefits and enjoining future unilateral changes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 2005 CBA authorize unilateral post-expiration changes? | Retiree benefits survive expiration per Cost paragraph. | Durational language in Coverage ends obligation. | No; Cost paragraph creates post-expiration mechanism and limits unilateral changes. |
| What is the effect of the VEBA and its exhaustion provision on Volvo's duties? | VEBA mechanism constrains unilateral changes. | VEBA is limited and does not control post-expiration. | VEBA mechanism extends beyond expiration, limiting unilateral modifications. |
| Does the Royal Coal reasoning apply to Volvo's agreement? | Royal Coal supports post-expiration obligation. | Royal Coal lacks this agreement's VEBA mechanism. | Distinguishable; here the negotiated mechanism changes the outcome. |
Key Cases Cited
- Keffer v. H.K. Porter Co., 872 F.2d 60 (4th Cir. 1989) (contract interpretation of surviving benefits beyond term)
- United Mine Workers v. Royal Coal Co., 768 F.2d 588 (4th Cir. 1985) (durational language; benefits may not extend after term unless bargained for)
- Gresham v. Lumbermen's Mut. Cas. Co., 404 F.3d 253 (4th Cir. 2005) (analyze contract as a whole; intent governs)