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Contracts Keyed to Summers
M&G Polymers USA v. Tackett
Facts
M & G Polymers, USA (Defendant) entered into a master collective-bargaining agreement (CBA) and a Pension, Insurance, and Service Award Agreement (P&I) with union workers employed at one of the Defendant plants. The contract language in the CBA and P&I stated that union workers “will receive full Company contribution towards the cost of” healthcare benefits upon retirement. When the CBA and P&I were renewed, Defendant amended the contracts to require retirees to contribute to their healthcare benefits upon retirement. Hobert Tackett and other retirees from M&G (Plaintiffs), along with their surviving spouses and dependents (Plaintiffs), sued Defendant in federal district court for breach of contract and violations of the Labor Management Relations Act and the Employee Retirement Income Security Act of 1974. Plaintiffs claimed that Defendant had promised to provide lifetime, contribution-free healthcare benefits. The district court dismissed the suit for failure to state a claim. Plaintiffs appealed. The court of appeals reversed, relying on UAW v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983), and held that the phrase “will receive” in the CBA and P&I indicated an intent by Defendant to vest Plaintiffs with lifetime benefits. On remand, the district court held in favor of Plaintiffs and issued a permanent injunction, ordering Defendant to reinstate contribution-free healthcare benefits for Plaintiffs. Defendant appealed. The court of appeals affirmed. The United States Supreme Court granted certiorari to review.
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