Rita Kendzierski v. County of MacOmb
503 Mich. 296
| Mich. | 2019Background
- Class action by ~1,600 retired Macomb County employees who retired under materially similar CBAs dating back to 1989, challenging unilateral 2009–2010 reductions to retiree healthcare.
- Each CBA contained a three-year general durational clause; none expressly promised lifetime, unalterable retiree healthcare.
- Trial court granted summary disposition to defendant on the theory retirees had a lifetime right but benefits could be reasonably modified; Court of Appeals held benefits were lifetime and unalterable without retirees’ consent.
- Supreme Court granted review to decide whether the CBAs vested lifetime, unalterable retiree healthcare benefits.
- The Court applied de novo review of summary disposition and contract interpretation and evaluated whether the CBAs were ambiguous or whether the general durational clause controlled.
- Court concluded the CBAs did not vest lifetime, unalterable benefits; contractual obligations ceased when each CBA expired and defendant entitled to summary disposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the CBAs granted a vested right to lifetime, unalterable retiree healthcare | CBAs (and surrounding practice/statements) show intent to promise lifetime healthcare to employees who retire during a CBA | CBAs contain a three-year durational clause and no explicit vesting language; therefore benefits expire with each CBA | No vesting; CBAs did not grant lifetime, unalterable benefits; contractual obligations ended at expiration of each CBA |
| Whether the CBAs are ambiguous (permitting extrinsic evidence) | Specific retiree provisions (survivor clause, Medicare/supplement clause, subsequent-employment clause) create ambiguity about duration | Those provisions can occur during a CBA term and do not override the general durational clause; no ambiguity on face of CBAs | CBAs unambiguous; no latent or patent ambiguity sufficient to admit extrinsic evidence; court must apply contract text |
| Whether Yard‑Man inferences or similar presumptions favoring vesting apply | Past precedents infer vesting from retiree-benefit context and bargaining expectations | Supreme Court precedent (Tackett, Reese) rejects Yard‑Man presumptions; ordinary contract principles control | Reject Yard‑Man inferences; follow Tackett/Reese and ordinary contract law — no presumption of vesting |
| Whether particular provisions (survivor, Medicare enrollment, re‑employment) demonstrate intent to vest | Those provisions show benefits designed to run with retirement (e.g., spouse continuation, Medicare linkage) and thus imply post‑CBA duration | Each provision is compatible with non‑vesting and can be harmonized with the general durational clause; they do not explicitly extend duration | Provisions do not render contract ambiguous or demonstrate intent to vest; general durational clause controls absent explicit contrary language |
Key Cases Cited
- Int'l Union, United Auto., Aerospace & Agricultural Implement Workers of Am. v. Yard‑Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (historical Sixth Circuit decision that inferred lifetime vesting from CBAs; later limited by Supreme Court)
- M&G Polymers USA, LLC v. Tackett, 574 U.S. 427 (U.S. 2015) (Supreme Court rejected Yard‑Man inferences; instructed courts to apply ordinary contract principles and not presume vesting)
- CNH Indus. N.V. v. Reese, 583 U.S. _ (U.S. 2018) (Supreme Court disapproved use of Yard‑Man inferences to create ambiguity and held CBA unambiguously did not vest lifetime healthcare)
- Arbuckle v. Gen. Motors LLC, 499 Mich. 521 (Mich. 2016) (Michigan precedent applying Tackett and holding durational clauses control absent explicit vesting language)
- Gallo v. Moen Inc., 813 F.3d 265 (6th Cir. 2016) (Sixth Circuit applied ordinary contract principles to hold CBAs did not create lifetime, unalterable retiree healthcare)