[JURIST] The US Supreme Court [official website] ruled [opinion, PDF] Monday in M&G Polymers USA, LLC v. Tackett [docket] on collective bargaining agreements for retirement healthcare benefits. The case was brought by retired employees of an M&G Polymers-owned plant, who sued the company when it was announced that retirees would be expected to contribute financially to their medical benefits. The retirees sued under the Labor Management Relations Act and the Employee Retirement Income Security Act of 1974 (ERISA) [texts], arguing that the language of the collective bargaining agreement (CBA) ensured them lifelong health care benefits, without requiring their financial contribution. The interpretation of such an issue was split among courts. The US Court of Appeals for the Third Circuit [official website] has required a clear statement of the parties’ intent that healthcare benefits survive a CBA’s termination. Both the US Court of Appeals for the Second Circuit and the Seventh Circuit [official websites] have ruled that the agreement should contain language to reasonably support the interpretation that benefits are intended to continue indefinitely. Meanwhile, the US Court of Appeals for the Sixth Circuit [official website] held that retiree healthcare benefits are presumed to vest indefinitely unless the duration of benefits is specifically stated. The court held that the Sixth Circuit’s interpretation of the issue was “incompatible with ordinary principles of contract law.”

The district court originally dismissed the retirees’ claim, a decision that was later reversed and remanded by the Sixth Circuit. The district court ruled in favor of the retirees but ordered that the retirees contribute to their health care benefits per the revised agreement. The decision was appealed, and subsequently affirmed [opinion, PDF] by the Sixth Circuit. The Supreme Court heard oral arguments [transcript, PDF] on this case in November.