Fourth Circuit Rejects Retirees’ Claim for Vested Health Benefits
The Fourth Circuit upheld an employer’s unilateral decision to amend a collective bargaining agreement to cap employer contributions to retiree health benefits and freeze Medicare reimbursements for hourly retirees. In so ruling, the Court applied general contract principles, as required by the Supreme Court’s decision in M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015), and concluded that: (i) the applicable CBA and SPD were properly construed to limit the provision of retiree health benefits to the term of the agreement, which meant that the benefits did not vest; and (ii) because the SPD unequivocally stated that pension benefits vested, it was reasonable to conclude that the parties did not intend for health benefits to vest. The case is Barton v. Constellium Rolled Prods.-Ravenswood, LLC, No. 16-1103, 2017 WL 1078540 (4th Cir. 2017).