Miles Moore
TIRE BUSINESS
Published: November 11, 2014 3:08 pm ET
Updated: November 11, 2014 3:11 pm ET
WASHINGTON — The U.S. Supreme Court heard oral arguments Nov. 10 on whether a West Virginia-based polyester resins plant should continue to honor a previous agreement with the United Steelworkers (USW) union to offer healthcare benefits indefinitely to union retirees.
The case — M&G Polymers U.S.A., L.L.C. vs. Tackett — is expected to have wide-ranging significance and resolve a long-standing split between federal courts.
Some federal circuit courts — including the Sixth Circuit, from which M&G vs. Tackett is on appeal — have held that, when collective bargaining agreements are silent on the duration of health benefits, retirees are entitled to receive them for life.
Other circuit courts, however, have held that employers may unilaterally change health benefits at the end of a specific bargaining agreement.
Goodyear owned the current M&G resins plant in Apple Grove, W. Va., until 1992, according to a Supreme Court brief submitted by the USW. During Goodyear’s ownership of the plant, it regularly negotiated contracts with the United Rubber Workers — which later merged with the USW — that included healthcare benefits for retirees to which recipients did not have to contribute.
Shell Chemical Co. bought the Apple Grove facility in 1992, and owned it until 2000, when the plant was sold to M&G.
Apple Grove retiree Hobert Tackett and others sued M&G in an Ohio district court, claiming that their healthcare benefits were vested and that M&G had no right to force them to pay premiums. After a bench trial, the district court found for the plaintiffs in February 2012, issuing a permanent injunction against M&G to provide the retirees’ health benefits for life.
M&G appealed to the Sixth Circuit. The appeals court upheld the lower court’s decision, but at the same time denied the retirees’ motion to restore them to the version of the union contract that existed before 2007.
In appealing to the Supreme Court, M&G said the issues it brought before the high court were issues of pure law.
“The court should grant M&G’s petition, reverse the Sixth Circuit, and restore uniformity on the exceedingly important question of how to read collective bargaining agreements to determine whether retiree healthcare benefits have vested,” the petition said.
Attorneys for the USW and the retirees, however, argued that M&G misinterpreted the basis of the Sixth Circuit’s decision.
The evidence shows “that the parties intended to create rights to health benefits continuing, without retiree contributions, as long as the retiree is receiving a pension,” the USW and the retirees said.
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