Sixth Circuit Follows Ordinary Principles Of Contract Law To Find Whirlpool Is Not Obligated To Provide Lifetime Retiree Healthcare Benefits

Author:Ms Megan Troy and Ronald J. Kramer
Profession:Seyfarth Shaw LLP
 
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Seyfarth Synopsis: Over the last several years, the law governing disputes on lifetime retiree health benefits in the Sixth Circuit has had many twists and turns. A recent decision may put an end to this uncertainty, confirming that a CBA's general durational clause applies to healthcare benefits unless the CBA contains clear, affirmative language indicating the contrary.

The Sixth Circuit's approach to retiree health benefits has been in flux since 2015, when the Supreme Court rejected the Circuit's use of what is known as the Yard-Man inference, which courts used to infer that negotiated retiree benefits were intended to continue for the retirees' lives. You can read about the Court's decision in M&G Polymers USA, LLC v. Tackett, 135 S.Ct. 926 (2015), here. Post-Tackett, the Sixth Circuit's continued use of a watered-down version of the Yard-Man inference prompted the Supreme Court to again step in and affirm the court's duty to use ordinary principles of contract law when weighing retiree healthcare benefit disputes. You can read about CNH Industrial N.V. v. Reese, 138 S.Ct. 761 (2018), here.

On February 15, 2019, in Zino v. Whirlpool Corp., No. 17-3851/3860, the Sixth Circuit followed this line of precedent (and other more recent decisions from the Sixth Circuit) and reversed a 2017 Northern District of Ohio decision finding certain CBAs vested plaintiffs with lifetime healthcare benefits. The Court found that the CBAs covering the retirees lacked clear, affirmative language that Whirlpool had an obligation to fund their health benefits after the expiration of the agreements' general durational clause. Thus, Whirlpool was under no obligation to continue to offer those benefits past the general durational clause's expiration.

In Zino, the plaintiffs worked for a Hoover Company plant in...

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