Robert Moore v. Menasha Corporation
690 F.3d 444
6th Cir.2012Background
- Menasha Corp. is a private, family‑run company with a Coloma, Michigan plant; retirees Moore, Rhodes, Peppel, Adams and spouses sue over health benefits under two CBAs.
- Two CBAs govern healthcare: 1994 CBA (1994–1997) and 1997 CBA (1997–2002), with Article XV and Section 7 addressing retiree coverage.
- Retirees retired at age 62; pre‑retirement assurances allegedly promised lifetime healthcare for themselves and spouses.
- From age 62 to 65, Menasha funded 80% (then 100% at 65) of premiums; premiums continued to be paid through Oct. 2006.
- In Oct. 2006 Menasha announced a new plan reducing company contributions from Jan. 1, 2007; plaintiffs sue under LMRA §301 and ERISA §502(a)(1)(B); district court split holding employee but not spousal coverage in plaintiffs’ favor.
- The Sixth Circuit reverses and remands for judgment in plaintiffs’ favor consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the CBAs vest retiree healthcare benefits. | Plaintiffs contend vesting inferred under Yard-Man; 1997 CBA unambiguously vests; 1994 CBA ambiguity resolved in favor of vesting. | Defendant argues benefits are welfare and not vested; 1994 CBA ambiguous and 1997 CBA limited without explicit duration. | Vesting found (1997 explicit; Yard‑Man inference supports vesting). |
| Whether spousal coverage is vested under the CBAs. | Spousal coverage should vest with retirees as a benefit flowing from the employees’ coverage. | Spousal coverage not expressly conferred; only employees are beneficiaries; no explicit spouses language. | Extrinsic evidence supports spousal vesting; vesting found for spouses as a result of the CBAs. |
| Whether Section 7(a) (1994 CBA) is ambiguous and requires extrinsic evidence. | Section 7(a) should apply to retirees to maintain consistent Article XV; 7(a) ambiguous. | 7(a) language refers to employees; inconsistency with 7(b) and structure; ambiguous drafting. | Section 7(a) ambiguous; extrinsic evidence needed. |
| Whether the 1997 CBA unambiguously vests retiree benefits. | 7 CBA unambiguously provides retiree medical benefits for those retiring at/after 65. | No fixed duration or amount; benefits not clearly vested by language. | 7 CBA unambiguously vests retirees’ benefits; no contrary duration limits. |
| Whether the reservation of rights clause or SPD can defeat CBA vesting. | The clause is may not override CBA; vesting remains intact. | ROR allows unilateral modification; SPD may trump CBA. | ROR does not trump the CBA; reserved rights do not defeat vesting; CBA controls. |
Key Cases Cited
- Sprague v. GMC, 133 F.3d 388 (6th Cir. 1998) (vest implied when not explicitly limited by contract language)
- Yard‑Man, Inc. v. Studio, 716 F.2d 1476 (6th Cir. 1983) (Yard-Man inference favors vesting in close CBA cases)
- Reese v. CNH Am. LLC, 574 F.3d 315 (6th Cir. 2009) (distinguishes vesting standards for welfare vs. pension benefits)
- Noe v. PolyOne Corp., 520 F.3d 548 (6th Cir. 2008) (extrinsic evidence needed when contract language is ambiguous)
- UAW v. BVR Liquidating, Inc., 190 F.3d 768 (6th Cir. 1999) (extrinsic evidence to interpret retiree benefit language)
- Prater v. Ohio Educ. Ass’n, 505 F.3d 437 (6th Cir. 2007) (ROR clauses must not contradict CBA terms)
- Bender v. Newell Window Furnishings, Inc., 681 F.3d 253 (6th Cir. 2012) (unilateral modification rights limited by mutual agreement terms)
- Yolton v. El Paso Tennessee Pipeline Co., 435 F.3d 571 (6th Cir. 2006) (contract interpretation in retiree benefits context)