Supreme Court Backs Employer on Retirees’ Pay for Health Benefits

By | January 27, 2015

The U.S. Supreme Court on Monday sided with a company that amended a collective bargaining agreement to force retirees to pay toward healthcare costs, throwing out a lower-court ruling that favored the former employees who objected to the change.

On a unanimous vote, the nine-member court handed a win to M&G Polymers USA, a subsidiary of Italy-based chemical company Mossi & Ghisolfi International, by sending the case back for further proceedings in the Cincinnati-based 6th U.S. Circuit Court of Appeals.

Allyson Ho, the company’s lawyer, said the Supreme Court’s ruling “sends a strong message that restores a level playing field in benefits litigation nationwide.”

Nearly 500 plaintiffs from Ohio who had worked at the M&G polyester plant in Apple Grove, West Virginia, sued in 2006 when the company said retirees would be required to contribute to their healthcare costs.

The plaintiffs, backed by the United Steelworkers union, said the collective bargaining agreement guaranteed them health benefits without requiring them to contribute.

The plaintiffs won in the U.S. District Court for the Eastern District of Ohio following a bench trial, and the judge imposed an injunction reinstating the original benefits. In an August 2013 ruling, the 6th Circuit upheld the district court decision.

The question on which M&G sought high court review was whether the 6th Circuit correctly made a presumption in favor of the retirees after finding the contract did not clearly state the duration of the benefits.

Justice Clarence Thomas, writing on behalf of the court, said the appeals court had not used the correct legal analysis.

Thomas wrote that “when a contract is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life.”

The case is M&G Polymers USA v. Tackett, U.S. Supreme Court, No. 13-1010.

(Reporting by Lawrence Hurley; Editing by Will Dunham)

Latest Comments

  • January 28, 2015 at 9:43 am
    KY jw says:
    I have to agree with SCOTUS on this one. If the contract doesn't specify, then the company should be free to make changes. Health insurance is expensive and retirees should ma... read more
  • January 27, 2015 at 3:06 pm
    Agent says:
    Their dues go to political contributions to the Democratic Party Libby. Why don't you wise up just once? Unions have been in bed with Obama for years. They didn't like it mu... read more
  • January 27, 2015 at 2:04 pm
    Mickey Dee says:
    They are probably eligible for Medicare too. It won't cost them much. Libby: "What makes you think they want Medicare? What are you a Republican?" Mickey: "Yes"
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