Supreme Court Overrules Sixth Circuit (Again) In Class Action Dispute Over Retiree Medical Benefits

Is Yard-Man really dead this time?

This issue should never have arisen, the Supreme Court should not have had to address it in 2015, and it shouldn't have required Supreme Court attention a second time just three years later. But it did. In 1983, in the case of UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983), the Sixth Circuit addressed the claims of a group of unionized workers who argued that they were entitled to lifetime medical benefits upon their retirement. In finding for the retirees, the court simply made up a set of "inferences" in favor of vesting, suggesting that they were just that - inferences - and that they should not be viewed as necessarily controlling. Over time, these "inferences" grew and began to function much like outright presumptions in favor of vesting. The court created new rules along the way largely eviscerating general termination provisions and requiring specific durational language directed at retiree benefits. These holdings resulted in employers losing the vast majority of such disputes in the Sixth Circuit, and cost manufacturing employers considerable expense to pay for benefits they had never promised. In the meantime, other circuits rejected the inferences and continued to apply ordinary rules of contract interpretation, as did the Sixth Circuit itself in such cases brought by non-unionized employees. In 2015, the Supreme Court addressed the Yard-Man line of cases for the first time. In M&G Polymers USA, LLC v. Tackett, 574 U.S. ___ (2015), it flatly rejected the Yard-Man inferences and directed the Sixth Circuit to decide retiree health insurance benefit cases using ordinary contract principles. It specifically held that the general termination provisions of collective bargaining agreement should be given effect unless overridden by more specific language. That should have ended the debate, but as we noted on March 9, 2016, some Sixth Circuit panels, while paying lip service to the majority opinion in Tackett, continued to find for the retirees based on arguments having no basis in contract law. Fractures soon appeared in the post-Tackett case law with ever more obvious splits even within the circuit and different outcomes in factually indistinguishable cases. These splits seemed to reach their zenith on April 20, 2017 when the Sixth Circuit issued three conflicting decisions on the same day, applying different law and having different outcomes. Reese v. CNH Indus., N.V., 854, F.3d 877 (6th Cir...