John Morrell & Co. v. United Food and Commercial Workers International Union, Afl-Cio Benard J. Aning, as Representative of a Class

Cir.1976). However, (8th we have “the an issue for first to consider discretion proper resolution appeal “where the

time on ” Title Ins. beyond doubt.’ Universal States, 1311, 1314 v. United Co. omitted). (citations Cir.1991) brief, respect to the off-

Thompson’s

set, “Brule is correct.” states Indeed, beyond doubt. resolution is

proper Judg- original Order for court’s

the district pro tanto reduction

ment ordered $130,000, million verdict

$1.1 This is one of the did not.

Amended Order appropriate it is for this where

rare occasions in the an issue not raised

court to consider grant relief.

trial court and carefully argu- considered the

We have by the Brules and conclude that

ments made entering court did not err

the district affirm, Thompson.

judgment in favor of We to the district court to reduce the

but remand $130,000, the amount of the judgment

net by Thygeson payment made

settlement

Thompson. Affirm.

We CO.,

JOHN MORRELL &

Plaintiff-Appellee, AND

UNITED FOOD COMMERCIAL UNION, INTERNATIONAL

WORKERS

AFL-CIO; Aning, repre Benard J. class, Defen

sentative of a defendant

dants-Appellants.

No. 93-2863. Appeals, Court of

United States

Eighth Circuit. 16, 1994. Feb.

Submitted

Decided Oct.

1303 bargaining agreements from the 1940’s until April negotiating after bargaining agreement, new collective Morrell disagreed and the over whether the expired Agreements obligate Morrell pay continuing hourly health benefits to April employees who retired before 1989.1 against Morrell commenced this action hourly employ- Union and a class of retired (the “Class”) seeking ees a declaration that it may unilaterally modify or terminate those health care benefits. The Union contends legal that these are vested lifetime governed by Employee issue Retirement Security Income Act of 29 U.S.C. (“ERISA”). §§ seq. 1001 et After the district court2 denied the arbitration, compel motion Union’s parties completed discovery proceeded and trial, Following four-day to trial.3 bench court found that the district the retiree benefits afforded the various Mas Agreements ter were limited the three- year Agreement. Accordingly, term each the court concluded those benefits contractually not vested under the Master legally nor vested under ERISA IL, King, Chicago, argued (Kelly granted requested Morrell the declarato Irving M. brief), ry appellants. for relief. John Morrell & Co. v. United Hupfeld, J. on the Int’l Food & Commercial Workers IL, Boies, Chicago, argued H. Wilber (D.S.D.1993). F.Supp. 825 1440 The Union (Jeremiah Falls, SD, Murphy, D. on Sioux appeal. affirm. and the Class We brief), appellee. for Governing Legal Principles. I. FAGG, HEANEY, Judge, Circuit Before LOKEN, Judge, and Circuit Senior Circuit requires pension plans ERISA Judge. vesting meet minimum standards. See vesting mandatory § 1053. But is not U.S.C. LOKEN, Judge. Circuit plans” plans “employee welfare benefit — (“Morrell”) the health care benefits here at Morrell & Co. and the that offer John 1051(1). (the 1002(1), §§ Workers issue. See U.S.C. United Food Commercial “Union”) may unilaterally modify ter- employer An parties to “Master” collective appeal parties, phrase "hourly it not the denial of its we will use this issue when did arbitration, 1. Like the employees” causing parties to mean Morrell who are compel motion to represented by the Union. em- expense discovery and a trial incur ployee April who retired before Communications, Inc. v. the merits. See Ritzel when he or she covered a Master Tel. 989 F.2d 966 Mid-American Cellular retired. 1993). may party "allow the sub Cir. A (which could lawsuit to run its course stantive BATTEY, 2. The HONORABLE RICHARD H. then, years), if dissatisfied with the take result, Judge the District of United States District right to arbitration on seek to enforce the South Dakota. judgement.” appeal Cotton v. from the final appeal, that we should 3. On Slone, (2d Cir.1993). However, compel arbitration. the Union waived history of those negotiating employ will review “absent mínate contrary,” Agreements to retiree health relates agreement to the contractual er’s 1107, 1109 Corp., 896 F.2d benefits. Varity Howe v. (8th Cir.1990), benefits have even some and the Union bar- Prior to v. IASD Health Servs. paid, see Meester

been care gained the issue of health (8th Cir.1992). 194, F.2d 197 Corp., 963 expressly included employees retired law, governing although is the ERISA Agreements. in the Master such benefits health vested this case turns on whether example, Appendix F to the 1973 Master For contractually in the conferred benefits were Agreement provided: and the Morrell Master between currently Retirement: All retirees 8.12 proof the burden of The has Union. Union coverage Employees ... and all furnished Alpha Port Anderson on this issue. See during the term of the Master who retire Inc., 1512, Indus., F.2d 1516-17 836 land hospital, Agreement shall be furnished denied, 1051, (8th Cir.1988), cert. 489 U.S. Compa- surgical insurance at medical and (1989). 1310, L.Ed.2d 579 109 103 S.Ct. through provided by ny expense plan con Agreements each Company.

The Master setting multiple appendices forth vari tained added.) Agree- 1973 Master (Emphasis The example, plans. For ous benefit expressly ment also contained a term clause Supplemental Appendix G contained F limiting Appendix the duration of the ben- Agreement on Pensions. Consistent efits: ERISA, Appendix vesting provi included G Hospital-Medical-Surgical 103. The expressly referred to “Vested Pen sions and Appendix in F Plan described Insurance F, hand, Appendix On the other sions.” for the duration of this will remain effect care benefits here which contained the health Agreement. issue, express vesting provisions. had no subsequent Agreement Master con- Each an intent to confer The Union clause, tained a similar term as well as may nonetheless be derived vested benefits limiting of all the general clause the duration ambiguous language Appendix F con from Agreement’s provisions to its three- Master light parties’ lengthy collec strued in year term. history. bargaining The Union shoul tive F parties changed Appendix 8.12 of The difficult, though impossible, bur ders a Agreement by deleting in the 1976 Master argument, persuasion with this since den retirees,” “All the reference to so Mor- are reluctant to read more benefits courts only express undertaking pro rell’s was to language plan plain into an than its ERISA employees continuing vide health benefits for v. El Paso Natural Gas confers. See Wise during who would retire the term of that Co., 929, Cir.), 937 cert. de - Agreement. The district court at Master nied, -, 196, 114 126 U.S. S.Ct. change Supreme tributed this Court’s (1993); Howe, 154 896 F.2d at L.Ed.2d Alkali decision Allied Chemical & Work Indus., Inc., 837 DeGeare v. Portland Pittsburgh 404 ers v. Plate Glass U.S. (8th Cir.1988), 812, vacated and F.2d 816 157, 383, (1971), 341 S.Ct. L.Ed.2d grounds, on other 489 U.S. remanded bargaining employees permis for retired is (1989). 103 L.Ed.2d 575 S.Ct. mandatory subject rather than a of col sive PPG, bargaining. Relying Bargaining History. lective Morrell II. The Collective position previously took the 1976 that re plan express terms of an ERISA hourly longer tired were no mem the benefits it confers. But the determine unit, bargaining bers of the and the Union plans appendices at issue were to collective acquiesced. usually un bargaining agreements, and Agreement bargaining agree Although the 1976 Master did wise to construe collective parties negoti- regard bargaining not refer to ments without to their Therefore, health benefits. history. examining before ated the January Agreement provisions, Morrell announced relevant Master we hourly employees provided would negotiations, be as a result of union improved including again a new retroactively improved once plan prescription drugs reduction cost benefits available to union retirees.” some Medicare reimbursement. These When the 1979 Master expired changes were made retroactive to the effec- the Union went on-strike. Morrell Agreement, tive date of the 1976 Master and terminated health care benefits for the strik- subsequently represented to this pay ers but continued to benefits to court that were made “as a result of parties negotiated retirees. After the a new negotiations.”4 union bargaining agreement, Morrell re- opened negotiations major negotiated competitor Morrell and the when a Agreement. Again, wage obtained and benefit another concessions from benefits for the Union. In late accepted retirees were discussed but not the Union Instead, wages lower and included.5 Morrell and the benefits from Morrell as well, 12, 1979, signed July in reciting Agreement “side letter” reflected a new Master duty made September that Morrell has no retroactive to again, Appendix provided benefits but “has advised the Union as a Once F retirement only employees Company policy, Company matter of in- for who retired dur- ing However, September Agreement.6 tends to announce that effective the life of the on 1, 1979, 12, 1984, Company January past hourly will extend the follow- Morrell sent ing programs currently stating part: benefit retirees a letter in retirees by Company covered Plan.” H.M.S. When Dining these with the Un- Agreement the 1979 Master became effec- ion, parties agreed that no reductions tive, existing Morrell wrote retirees that it pensions.7 would be made in retiree How- “pleased improvement” was announce ever, and the Union did in Bishop, their health care benefits. Lee agree your that retiree medical benefit negotiated Agreement who the 1979 Master program provide will be modified to with the testified Morrell made a general same negotiated level of benefits significant change to retiree health benefits employees for ap- active for those benefits in 1979: plicable to retirees.... Benefits have Prior to this time ... Morrell areas, had en- improved particularly been in some gaged in stairstep' what would refer to as catastrophic type as it relates to illnesses. programs past for hand, retirees. other On the other the deductibles and co- words, you 1969, you if got retired one [in] you insurance have been modified so that benefits; you if set of retired in covering will share in some the costs you got a set of differen[t] benefits.... so initial treatments and minor ailments. past hadwe retirees. The multiple plans company’s in existence for determina- ^{[*] [*] [*] [*] [*] [*]} pleased John Morrell & Co. is to be able tion was ... that we would discontinue the provide to continue to retirees with a medi- stairstep approach put past all the plan. cal benefits program. retirees under the same Although Bishop Summary described these as unilater- Morrell also sent retirees a changes, Hourly al Morrell’s brief to this Program court Retiree Medical Benefit stated, stated, Anderson v. John Morrell & “In Program Co. “This Benefit quote page Agreement 4. This is taken from five of Morrell's 6. A 1983 Memorandum of stated that 21, 1986, March brief in v. John Mor Anderson "present by Appen- be ... shall covered” 86-5017-SD, reported rell & No. later at 830 dix F. The district court found that this referred 1987). F.2d 872 Cir. employees Agree- who retired after the 1979 expired Agreement ment but before the 1982 example, Agreement pro- 5. For the 1979 Master negotiated. employees vided that union who retired after 1, 1979, September would be covered under Morrell's Vision Plan. This benefit was not ex- tended to disingenuous pension 7. A statement since bene- previously hourly employees retired fits are vested law under ERISA. January until 12, 1979, letter, July like the side and termination accordance document to modification negotiator applicable law.” its silence. As Morrell Lee trial, Bishop Morrell was aware admitted expired Agreement the 1982 Master When negotiate that it would be harder to a new again went September the Union on Agreement active Master strike, paying again stopped and Morrell upset Company’s the Union was striking employees while past hourly treatment of retirees. continuing retirees. In the them Agreement, Appen- subsequent 1985 Master hand, the view of the On the other Union’s and, past dix F made no mention of bargaining landscape is even more predecessors, was limited to the dura- like its recognizes distorted. The Union three-year Agreement. Master tion of the after 1973 made no men- again on strike. went tion retirees and therefore cannot be parties negotiated impasse to an When providing benefits to al- construed as vested unilaterally implemented early ready hourly employees. The Union A wage benefit terms. new collec- new instead that each retiree has a vested bargaining agreement tive went into effect right to the level of retirement health bene- January of 1991. Morrell sent a memoran- fits afforded in the Master hourly retirees on March dum when he or she retired. But that view effect statement, that included the “The Agreements square Master does discretion, legal right, at reserves its its sole parties’ bargaining history. alter, modify, any plan or terminate any responded benefit at time.” The Union every negotiation In after any such action “would violate the Un- requested improved Union health benefits for applicable bargaining agree- ion’s past Starting in retirees. Morrell elim rights ment as well as the of the retirees.” prior “stairstep” approach inated its —which Morrell then commenced this action. on its face was consistent with the Union’s party appeal, put On each strives to a vesting argument adopted, with at least —and gloss long favorable on this collective bar- implicit approval, single Union bene gaining history. Morrell since package applicable past fits to all retirees. past it has carved retiree health bene- Thereafter, prior signing to the of each new bargaining process fits out the collective Agreement, Master Morrell and the Union “employer and treated them as a matter of negotiated, subsequently imple and Morrell grace.” above-quoted passages But as the mented, package a modified health benefits from Morrell’s brief to this court past January for retirees. As Morrell’s clear, Anderson v. John & Co. make illustrates, letter to retirees the modifi provided the health benefits Morrell to hour- cations included both increases and decreas 1,1989, ly prior April retirees were in fact benefits, yet ines the level of neither the product bargaining. They of collective any Union nor member of the Class ever Agreements, were not included in the Master objected changes that such violated vested perhaps they collectively were not bar- rights.8 gained in a narrow of that sense term. But inconsistency argu- Faced Agreement negotiated, with at oral as each Master ment, suggested the Union that each subse- requests improved the Union made for retir- quent part pre- ee health Morrell devised and modification is of the retirees’ array sented a detailed But those modifications health benefits it vested benefits. provide past product would retirees “as a matter of were the of either side deals or action, company policy,” acquiesced depending upon and the Union unilateral Morrell proposal, by signing bargaining. in Morrell’s either one’s views of the collective collectively bargains approv- past 8. Even aif union benefits were never submitted to retirees for past rights may al, for "vested retirement suggests which that neither Morrell nor the pensioner’s not be altered without the consent.” thought they modifying vested bene- Union PPG, atU.S. 181 n. 92 S.Ct. at 398 n. 20. fits. plans Morrell’s modified retiree health benefit provision 3. The the 1973 Master found in the Master They not to be Agreement that continued health benefits for of the Un- are the basis Agreements, which short, past prior evidence that retirees is there is vesting claims. ion’s Alpha were not vested. See Anderson v. modifications concluding that later basis DeGeare, Portland, 1518-19; 836 F.2d at initial level of health benefits to a retiree’s Likewise, above, Rather, F.2d at 816. as noted Mor- the fact that modifica- are vested. adoption “unilateral” of a modified rell’s routinely negotiated is fundamen- tions were package health benefits the notion that tally inconsistent with signing of each new Master ever vested. benefits were retirement health Portland, prior were not evidence vested. 836 F.2d at Alpha v. See Anderson 1519. Appendix F in of the Master several Agreements contained a coordination-of-ben- reasons, foregoing we conclude For provision. pro- that such efits We have held bargaining history be- of collective vesting. are also inconsistent with visions sup- does not and the Union tween Morrell Portland, 836 F.2d at See Anderson retirees’ port Union’s claim that back- are vested. With provisions ground, we turn to of this substantial textual evi- the face by the dis- Agreements as construed Master are not dence that retiree health benefits trict court. vested, points relatively little in contrary. Agreements the Master Agreement Provisions. III. The Master 9.1(b) refers us to visions non-vested retiree health benefits. language 1. The absence that reflect an intent to confer in Appendix F is strong contain explicit vesting evidence many pro- only provision Appendix (b) After Retirees Death: Agreements: ^[*] that also F to the 1979 Master sfc appeared Hs Agreement, the 1982 and ‡ ‡ limit retiree benefits to parties’ the intent to (2) Employee dies who When Retired Agreement. By con- of the Master the term joint form has selected a and survivor trast, Appendix in pension the benefits G coverage pension, the above shall expressly to as vested. referred surviving spouse and continue for the dependent children until the earlier above, Agree noted each Master As surviving spouse’s death or remar- expressly limit a term clause ment contained riage. ... ing of the retirement health the duration language argues this ex Appendix F to the du The Union benefits contained spouse Appen pressly eligible vests an with Agreement. We held ration of Master until the F retirement health benefits v. Portland Industries dix Anderson pre spouse’s remarriage. or have language with an death We similar was inconsistent language sup viously that such does for life: noted “[i]t intent to vest health benefits eligible argument that survivor ben nugatory port clauses would render the durational Local Union No. 150- even efits are vested. See to hold that benefits continue life A, Int'l provides the Food & Commercial Workers though agreement which United Packing Dubuque expires on a certain date.” 836 F.2d Union benefits Cir.1985). But in the context of 69-70 see also Bidlack v. Wheelabrator (7th Cir.) (en banc) case, construe equally plausible it is this Corp., 993 F.2d surviving providing that a assuming per provision this as (“employers against adamant joint and eligible to receive a spouse all who is petual obligations can eliminate doubt also pension is vested —will any entitle survivor insisting on a clause that makes —which health non-vested retiree granted by the receive whatever ment to health benefits to time. provides from time agreement agreement expire on the date the — denied, -, eligible survivor provision, 114 Under expires”), cert. U.S. (1993). coverage,” which is only the “above receives 126 L.Ed.2d 240 S.Ct. three-year Appendix term of F further evidence that both Morrell and the limited 9.1(b) recognized Agreement. Union retirement ben- and the Master modification, subject ambiguous periodic and cannot overcome the other efits were clauses, recognition term that are provisions, such inconsistent with Union’s con- vesting. inconsistent tention that each Master con- Moreover, ferred vested benefits. Morrell’s Next, upon the Union relies two additions testimony gave § trial 4.1 uncontroverted F in the 1982 and 1985 Master Appendix very meaning exception was an different preamble Appen- Agreements. —it reopen to a concession not to these Agreements F in those stated: “This dix Agreements prior expiration. to their Master provided Agreement ... other than as under words, § express recog- 4.1 was an other section], B retirement benefits [the Section nition that retirement health Union termination, subject to modification shall be benefits could be the of additional upon or the termination of [the] extension the Master Agreement.” language, That before expired. supporting argues without trial testi- mony, vested all the retirement health bene- above, From the we conclude that both the B. But fits contained Section there is plain meaning Agreements, of the Master general vesting B. reference Section bargaining and the collective context Rather, specific provision there is one arose, support —Arti- which the district court’s five-year III —that cle conferred fixed determination that the Class’s retirement Retirees,” “Separation workers contractually health benefits are not vested. ages of 50 and 54 who elected a between separation pension plant closing. after a Ab- Fiduciaiy Duty. Morrell’s IV. contrary, sent extrinsic evidence to the we Finally, that even if preamble’s exception believe —“oth- the Class does not have vested retirement provided er than as under Section B” —was fiduciary Morrell would violate its simply a cross reference to the limited vested by unilaterally modify duties under ERISA retirement health benefits conferred in Arti- ing terminating those benefits. This ar cle III of Section B. gument is without merit. ERISA does not Second, the Union an intent to finds vest employer fiduciary bar an that is also a from § retirement health benefits in 4.1 of Section exercising judgment modify its business Agreements: B in the 1982 and 1985 non-vested welfare benefits. United Pa See plan 4.1 The above retirement benefit perworkers Int’l Union v. Jefferson Smurfit upon was based certain economic condi- (8th Cir.1992). 1384, Corp., 961 F.2d 1386-87 plan in existence at the time such was tions judgment The of the district court af- negotiated by Company the and the Union. firmed. Therefore, Company the and the Union alter, right subsequently

reserve the HEANEY, Judge, Senior Circuit modify, increase or reduce the benefits and dissenting. herein, time, coverages provided any at including subsequent Employee’s agree vesting mandatory I is not un date, changes if retirement occur employee der ERISA for welfare benefit benefit, of this costs .retirement or eco- plans. agree I also that the Union waived its industry nomic conditions of the meat or compel My agreement arbitration. Company change, any but modification there, does, ends however. The Union of plan only upon to shall be mutual course, proving have the burden of agreement by Company and the Union. employee contractually welfare benefits were vested, meaning The greater Union construes 4.1 as but this burden is no and no agree any the Union must modification of less than in other contract case. See benefits, 1107, Varity Corp., retiree health even after the Master Howe v. 896 F.2d 1109 (8th Cir.1990); expired. has Even accepting Anderson v. Portland Cir.1988), Indus., Inc., 1512, interpretation provision, Union’s of this it is 836 F.2d 1517

1309 denied, my joint death if I selected the 489 U.S. S.Ct. and surviv- rt. ce (1989); option. or L.Ed.2d 579 Local Union 150-A, Food & Commercial No. United employee Id. at 1733. Another retired of Dubuque Packing Int’l Union Workers Morrell, Smelser, Bob stated in his affidavit (8th Cir.1985). my 20, 1992, April dated as follows: view, more than sustained its the Union has optional (joint I an pension chose form of respectfully dissent. burden. pension) specifically and survivor so that my wife would be covered the benefits History Bargaining

The Collective my pension after death. The outline of the options which I received the mail from single powerful, undisputed most fact statement, contained a every hourly employee in this record is that bottom, large capital letters at the as fol- January 1957 and who retired between lows: health benefits from Morrell received of retirement until death. The HEALTH from the time INSURANCE BENEFITS in- retirees received these without FOR YOUR SURVIVING SPOUSE terruption though collective bar- BE BY even WOULD PROVIDED THE gaining agreement terminated on several oc- IF COMPANY ONLY YOU CHOOSE during period though and even A casions JOINT AND SURVIVOR PENSION. on some occasions. the Union went strike addition, Paragraph Id. at 1741. F of a change The health benefits did from time to form entitled “Retirement Information” time, usually to the benefit of the “[f|or states that continued health care bene- forty-two-year always during period, employee’s spouse dependents fits by agreement between Morrell and the Un- retiree, beyond employee the life of the must complained ion. No retiree about select a Joint & Survivor Form of Pension.” changes that were made. 1743; Testimony Id. at see also Trial Tibke, 601; Rodger at id. Affidavit of Fran- undisputed upon A fact is second 20, 1992), (Apr. cis id. Krier Affida- retirement, hourly employee given each 21, 1992), George (Apr. vit of Zuraff id. at joint option selecting survivor form Again, undisputed it is that Morrell Upon of benefits. the death of a retiree who spousal continued these benefits without in- joint survivorship elected terruption during those times that the union surviving spouse that informed the no, employees were on strike and spouse until the died benefits would continue bargaining agreement was in effect. (§ 9.1(b)(2) Jt.App. or remarried. Appendix Agreement), B of 1979 Master undisputed A third fact is that not once McFarland, Larry during period through from 1957 Decem- Morrell, [La- testified that “I was told ber did Morrell inform the Hoffman, Anderson, Gary Butch Jun- Vonne employees, the active about so, Sinsky] and Tim I would have the that retire that it had the to terminate my for the rest of life as as at well health In his affidavit of benefits. my If percent- 21,1992, Jarman, the time of death. I left the April employ- Jim a retired wife, age my Morrell, there she would receive of ee states: the benefits for the rest of her life.” Id. at any Neither Lavonne Hoffman or other 21, 1992, April In his dated 590. affidavit my person pension ever advised me that Sundermann, employee Les another retired my guaranteed was and fixed but that Morrell, of stated: I health insurance benefits were not. have joint pension any any representa-

I at heard selected a and survivor never time that option because I knew that this form of tive of John Morrell & Co. make pension guarantee any the health would medical insur- statement or statement that my my employees ance for wife after death.... insurance benefits for who have fixed, given guaranteed, and vest- [T]he form to me to take home and retired are my agreements be- fill out ... also said at the bottom that ed in accordance with the Morrell and the Union. wife would have the health insurance after tween UFCS Bishop, 1729. Another retired of Lee conceded that “it was Id. at Nelson, Morrell, Jerry company’s provide past in his affidavit stated best interests 20, 1992, improve- that one told me that retirees with certain April “[n]o of benefit guaranteed, my largely were not ments. And it related to the contract negotiations going told that fixed or vested and. no one ever me that on at that time.” stated, Company’s position Jt.App. Simply it was the those retiree health element, along wages, modified or terminated an could be benefits were fact, hours, benefits, Company. any pensions, fringe I have at never and other any representative Compa- reaching agreement. of the be time heard considered 1736; ny Id. at make such claim.” see also many A employees fifth fact is that testi- 23,1992), (Apr. of Don Reiter id. at Affidavit they fied that were told at the time of their 1738; (Apr. of Ronald Affidavit Christianson retirement that their health benefits would 21, 1992), at Affidavit of Marcene id. they beyond be continued until died and 21, 1992), (Apr. In- Williscroft id. joint spouses for their if elected surviv- deed, July not until was orship following colloquy benefits. The be- Morrell intimated that benefits for attorney tween Virgil for the Union and employees and was a matter of “em- Grace, employee, during a retired Morrell ployer grace” rather than a matter of con- the trial of this matter illustrates what Mor- tract. On that date Morrell wrote to the supervisors employees rell told about their Union: retiree health benefits: Company position has taken the Q. (By King) Mr. ahead. Go What else legal obligation that it has no was said? respect with the Union with to the benefits A. IAnd decided to take it all and [Bob of retirees. Worcamp] explained you to me “Do legal position Without waiver of you doing?” says, know what And I “I however,'... party, either do; hope that I I think that I do.” And I following programs will extend the benefit going get asked for I fringe what was currently by Compa- to retirees covered piece benefits. He handed paper me ny prior H.M.S. Plan and who have retired says, “Read that on the back.” And it September under the [retire- all, if my said that I took it wife wouldn’t 1957, 1959, 1961, provisions] ment get anything and she would lose all of her 1964, 1967, 1970, 1973, Supple- and 1976 plus insurance if I passed away. PCS mental on Pensions. partial part And I took of it she would — added). (emphasis By Id. at 932 get the terms passed those for the rest of her life if I letter, signed which the Union away. accepted, fully preserved legal its Q. get She would what for the rest of her position changes could be made in the life? currently employ- health benefits of retired insurance, A. The and the ees without its consent. it, I PCS. And said that —after I read undisputed

A during fourth fact is that all get my it said that I would insurance and years question, life, my health benefits for PCS the rest of I I said that active and questioned alike were the that and wanted to be sure that getting between Morrell and what I knew because in our Although the Union. it is true that after the condition —she has had rheumatoid arthri- Supreme arthritis, years, Court’s decision Allied Chemical tis for 17 I have and Pittsburgh & Alkali tough Workers v. Plate Glass we shape, are both and I wanted clarify U.S. 92 S.Ct. 30 L.Ed.2d to be sure and that if this —if (1971), legally required any way Morrell was there was that I could lose that bargain to said, only way Union over retiree health health insurance. He “The equally it bargain you is true that it did can lose that health is if insurance over keep company belly this issue and it must up went and went broke.” it negotiator, just made. Even clarify Morrell’s chief M. I said I’d wanted to that be-

13H right change only good as unilateral to retiree health ben- person a is I believe cause fact, obligated by In efits. Morrell was con- their word. tract not to do so. Sinning, another retired Don Id. at 595-96. Morrell, in his affidavit of stated employee 16, 1989, Morrell all On November wrote 21, 1992, told that “Lavonne Hoffman

April self-serving retirees a letter in which it stat- and Survivor if I did select Joint us that always ed that “as reserves the my and I would both be pension, wife form of right change health care from to benefits during my by covered to Id. at 1251. This letter was time time.” would, my wife be and thereafter lifetime by in a vein in which followed others similar covered until the end of her continued to be hardened, position culminating in Morrell’s of Ron- see also Affidavit life.” Id. its decision on December to continue 21, 1992), (Apr. id. at 1758. ald Christianson largely coverage for all retirees but at the for Morrell testified that single witness Not expense. retirees’ time of retirement at the retirees told history In the of this of collective face their health that Morrell could terminate bargaining representations to individual expiration of a collective bar- at the benefits retirees, any support I am unable to find gaining agreement. majority’s the record for the view that the Hoffman, Manager Assistant Lavonne history bargaining that of collective indicates Falls, Morrell in Sioux South of Benefits for retiree health benefits could be terminated Dakota, in which she submitted an affidavit unilaterally. Obviously Morrell Morrell practice to “it was our standard stated that right deny health benefits to retained the pensions were that their [retirees] advise right but it did not have the future fixed, guaranteed and but their ben- [health] already the health benefits of terminate 1723. Hoffman did were not.” Id. at efits hourly employees. employ- explicitly advised not state that she right reserved the to termi- ees that Morrell Agreement Provisions The Master health benefits after retire- nate the retiree single not call a retiree to ment. Morrell did agree with majority cannot statement support Hoffman’s many provisions contain guaranteed, nor did health benefits were not only intent to confer nonvest- that reflect an identify any retiree whom Hoffman herself contrary, benefits. To the ed retiree health guar- were not she told that health benefits single agreements to include a failed anteed. Union, the active provision that informed the four- employees, or sum, supports the record the view practice providing decade and Morrell intended that both the at the end of col- could be discontinued benefits would vest when agreement. bargaining lective that health bene- The retirees knew retired. modified Morrell and the fits could be my opinion,- there are two reasons Mor- they also knew that it was an parties that rell never told the interested that the health article of faith with the Union right retiree health to terminate retained protected. be benefits of retirees would bargaining at the end of a collective that it had intensely agreement. Morrell knew hard times in the Faced with so, only right asserted industry, position to do competitive meat Morrell’s in the indus- purported right when conditions change in On December began to Second, knew try to a retiree became difficult. Morrell stated in a letter right after more its assertion of such change.” Id. at that “benefits are give-and-take bargaining forty years of letter was a sum- than 1180. Enclosed with the certainly trigger a stated, involving this issue would mary health benefits that of retiree perfect oppor- Morrell had a Program subject stoppage. work “This Benefit modifica- unilaterally ter- tunity ap- to assert tion and termination accordance in for retirees Note that Mor- minate plicable law.” Id. at 1182. by decided Pittsburgh Plate Glass was when explicitly not claim that has the rell does Packing; only Supreme Court. It failed to do so and en banc can take the court to with the Union that action.1 instead continued respect to retiree health benefits and to Second, Alpha the facts Anderson v. claims without honor retirees’ health benefit clearly distinguishable Portland are from our interruption. case. majority next claims that this court Alpha 1. v. Anderson Portland both Alpha Portland that held Anderson company the union and the testified that language to that used here limited similar guaranteed retiree benefits were-not of retiree health benefits the duration the beyond the life of the current bar language and that such gaining agreement. The International Union with an intent to vest inconsistent Miechur, president, Alpha Thomas and Port health benefits. There are at least two re- Bonstein, personnel manager, land Robert J. sponses language to this claim. the language they “testified that pre under the Dubuque Packing, to that in here is identical pared agreed upon, retiree welfare bene

in which our court held that contract lan- guaranteed beyond not expira fits were guage plus dealing a course of indicated an tion of the Alpha CBA.” Anderson v. Port right intent that vest land, 836 F.2d at 1515. Here the Union has upon retirement. We stated: always position taken the that retiree health agreements unambigu- are not While life, guaranteed benefits are and Morrell ous, plaintiffs we have carried their believe position many years. to that acceded proof. previously, burden As noted many agree- there are indications Alpha unilaterally 2. Portland created a dealing par- ments and course of group plan insurance for active right ties intended the to benefits would plan 1946 and extended the upon right vest retirement. The to receive 1948. Here Morrell negotiat- and the Union health and welfare benefits arises from the plan ed the health for both active and retired past employee. retiree’s status as a It is employees. dependent on a or continued current Beginning 3. in 1955 the terms of the relationship Company. The sta- Alpha plan subject Portland became to bar- tus of a retiree cannot be affected fu- gaining company between the and the union. agreements time between describing negotiated The booklet initial Union; Company and the neither can plan Alpha stated that Portland reserved the simply act on behalf of retirees. There is right plan. to discontinue the No such lan- (cid:127)no evidence that and the guage appeared in Morrell’s booklet until right Union did not intend to vest the 1985. is, benefits in the retirees. There on the hand, parties other evidence im- In 1965 the proposal union submitted a plicitly provide intended to lifetime bene- Alpha Portland that retiree benefits be fits to retirees. paid spouse to a retiree’s after the retiree’s Dubuque Packing, death, rejected Here, F.2d at 70. This Portland it. panel Dubuque has no to overrule spouses of Morrell retirees who elected the Dubuque Packing argument Co. made the general pro- same to the durational being to this court as is made Morrell. agreement. sug- visions of the Plaintiffs fail to gest why parties manifestly capable who are analysis portions Plaintiffs' of selected clearly indicating respect their intention with and, language simplistically contractual rights obligations termination times, fancifully, suggests parties rights specify were tunable to shall not clearly provide intended to retiree health bene- agreement terminate with in the context of beyond fits the terms of the relevant collective Instead, retiree welfare bargaining agreements. benefits. Plaintiffs The retiree benefit would have provisions subject agreements this Court believe that the contract quite sim- provisions ply coverage specifically describing coverage eligibility provisions contain applicable during prescribes which are of these welfare also the contract term. their language specifying Due to the absence of duration. term, Dubuque Packing such benefits shall Reply survive the contract Co. Br. 4-5. presumably aware that the employees are until health benefits joint option received obligation for union owes they or remarried. died they If for retirees. continued benefits for both benefits Portland In forego wages now in of retiree expectation during the continued and retirees strikers benefits, they would want that assurance stated, fact that “The This court strike. they will continue to re- once retire striking employ- retirees Alpha treated regardless of bar- ceive such benefits the any of intent to negates inference equally ees gain subsequent agreements. reached n. 3. 836 F.2d at 1518 benefits.” vest retiree assertions, Contrary to Yard-Man’s the contrast, Mor- at when strikes occurred In finding an intent to create of interminable rell, striking employees the health benefits rights insurance benefits to retiree for re- benefits were discontinued not, any explicit language, is absence of continued. tirees way, inconsistent with federal discernible argu majority makes two additional The labor law. durational it states that ments. omitted). (citations Here, to the life of all benefits at 1482 retiree clause limits Id. argu This bargaining agreement. during strikes collective were continued health benefits rejected in Inter employees’ considered were ment was active while Auto., Aerospace & national United not. v. Yard- Agric. Implement Workers Am. Second, majority fact asserts “the (6th Cir.1983), Man, Inc., cert. routinely negotiated that modifications were denied, 104 S.Ct. 465 U.S. fundamentally with the notion is inconsistent (1984). In the col Yardr-Man L.Ed.2d any retirement health benefits were provided that bargaining agreement lective agree mod- While that later ever vested.”2 one employees’ terminated active benefits not to may be of an intent ifications evidence Thus, the employee’s layoff. an month after vest, I that the evidence of intent in believe employees terminated all active benefits of contrary. overwhelmingly case is to the company argued that The plant closure. changes in were favor- Most of the benefits thus be terminated retirees’ benefits could to coordi- or were made able retirees expiration of the plant or with the closure newly enacted Medicare. nate benefits with bargaining agreement. The court subsequent fact that there were The mere company in conduct of the looked to the negotiated modifications to retiree health It parties determining intended. what prove that such did benefits not benefits does had retirees’ noted Yard-Man continued in effect when the em- not vest at the level plant clo for a time after benefits insurance Rather, it indicates is that ployee all retired. point benefits beyond the where such sure necessarily have incen- retirees did not for active em could been terminated have object of their bene- tive to to modifications indicates It stated that this conduct ployees. changes increased their fits if the benefits retiree company “did not consider viewed ben- changes were otherwise as limita to be tied to the durational benefits they contributed to Morrell’s eficial because group.” Id. at 1481. The of that active tions prosperity. long-term say: on to court went years During forty-plus only permissive are for retirees Benefits single not Morrell and between mandatory subjects bar- of collective not changes that been objected to the had such, unlikely that such gaining. As it is If an and the Union. .negotiated Morrell typically understood which that his vested individual retiree believed delayed or reward compensation form diminished, had been right services, would be past for left retiree, to commence had negotiations. contingencies of future III.3., erally adopt package benefit a modified health majority uni- states that Morrell's In signing new past of each "adoption of a modified health benefits lateral very every agreement. case until signing of each master end, package retirees with the negoti- package prior for retirees the benefits agreement” evidence that master fact, and the Union. ated not unilat- vested. Morrell did action under section 301 the Labor Man- right

agement Relations Act to assert his America, Appellee, UNITED STATES of that existed at the time receive Aning, of his retirement.3 Benard J. a re- BROYLES, Appellant. James William Morrell, personally tired and as class, representative of the defendant is a No. 93-2962. action, party to this action. Prior to this Appeals, United States Court of retiree had commenced an action to chal- Eighth Circuit. lenge any negotiated changes plan. retiree health Sept. Submitted 1994. Decided Oct.

Conclusion Rehearing Denied Dec. For four decades Morrell and the Union negotiated retirees’ health benefits. reasons, competitive

for economic and Mor- charge

rell decided to retirees for health bargain

benefits. Were it not for its provide

Union to continue to retirees, right would have a under change. to make that

ERISA Morrell cer-

tainly had the to make this decision retirees, respect to future but not with

respect already who had re- bargain,

tired. Morrell made the and no may bargain,

court refuse to enforce this freely

which was entered into and which cost employees higher wages

active and better conditions,

working they agreed which to be- they hospital

cause were concerned about

and medical bills for themselves and then-

spouses after retired.

I sympathy dissent not because I feel do, although I and not because I

question packing industry that the meat is an

intensely one, competitive simply because bargain, is a and we should not party

absolve bargain. either from their judgment

would reverse the of the district

court. retiree, Pittsburgh moreover, 3. The Court in Plate Glass stated: consent. The would have a This does not remedy mean that when a union bar- federal under 301 of the Labor Man- gains nothing opin- for retirees —which in this agement Relations Act for breach of contract if precludes employer agrees ion if the retir- unilaterally changed. —the his benefits were protection. ees are without Under established 404 U.S. at 181 n. 92 S.Ct. at 398 n. 20 principles, rights contract vested retirement (citations omitted). may pensioner’s not be altered without the

Case Details

Case Name: John Morrell & Co. v. United Food and Commercial Workers International Union, Afl-Cio Benard J. Aning, as Representative of a Class

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Jan 17, 1995

Citation: 37 F.3d 1302

Docket Number: 93-2863

Court Abbreviation: 8th Cir.