Zino v. Whirlpool Corp.

JOSEPH ZINO, et al., Plaintiffs-Appellees, v. WHIRLPOOL CORP., et al., Defendants-Appellants.

No. 17-3851

No. 17-3860

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

February 15, 2019

NOT RECOMMENDED FOR PUBLICATION

File Name: 19a0079n.06

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO

BEFORE: SILER, GRIFFIN, and STRANCH, Circuit Judges.

GRIFFIN, J., delivered the opinion of the court in which SILER, J., concurred. STRANCH, J. (pp. 5-13), delivered a separate dissenting opinion.

GRIFFIN, Circuit Judge.

In this class action by Hoover Company retirees, the district court ruled that numerous collective-bargaining agreements vest plaintiffs with unalterable lifetime healthcare benefits. Because we find that the CBAs' general durational clauses (which say when the agreements end) control when healthcare benefits end, we reverse.

I.

Plaintiffs built vacuum cleaners for the Hoover Company at its plant in Canton, Ohio, and retired between 1980 and 2007. Over the years, a succession of CBAs governed employment terms and aspects of retirement, including healthcare benefits. As to those benefits, the agreements contained one of three promises:

¦ The Company "assumes responsibility for paying premiums . . . for future retiree's [sic] medical insurance in accordance with the terms and conditions of the [Welfare Benefit] Plan";

¦ An eligible "employee who retires . . . shall have the opportunity to continue elements of the medical insurance in accordance with [specified] principles"; and

¦ "[A]vailable medical benefits" for eligible retirees "shall be" for "pre-65 coverage only" with "no change in current coverage" except for increased cost sharing.

A series of acquisitions left Whirlpool responsible for providing healthcare benefits to plaintiffs. After the company announced drastic reductions to those benefits, plaintiffs sued the company and its Group Benefits Plan under the Labor Management Relations Act and the Employee Retirement Income Security Act, seeking a ruling that the CBAs vest retiree healthcare benefits at unalterable levels.

The parties litigated amidst an earthquake in our case law in which the Supreme Court upended our approach to interpreting the relationship between a CBA's general durational clause and the vesting or non-vesting of healthcare benefits. See M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 930 (2015) (overruling UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983)). After both phases of a bifurcated bench trial, but before our case law ceased its transformation, the district court ruled that the CBAs vest retiree healthcare benefits at unalterable levels to all plaintiffs.

II.

Defendants now appeal the district court's judgment in plaintiffs' favor. We review the district court's findings of fact for clear error and its conclusions of law de novo. Little Caesar v. OPPCO, 219 F.3d 547, 550 (6th Cir. 2000).

To succeed below, plaintiffs needed to prove that defendants violated a union contract that vests lifetime healthcare benefits. See 29 U.S.C. § 185 (providing a cause of action for violationsof a contract between an employer and a union), §§ 1002, 1132 (providing a cause of action to enforce rights under the terms of an employee welfare-benefit plan). Thus we must determine whether the CBAs in this case vest plaintiffs with such benefits. We look first to what each contract says; if its plain language lacks ambiguity, we stop there. See Fletcher v. Honeywell Int'l, Inc., 892 F.3d 217, 228 (6th Cir. 2018).

We've previously recounted the many twists and turns our case law has taken in the past few years, see Cooper v. Honeywell Int'l, Inc., 884 F.3d 612, 616-18 (6th Cir. 2018), but we need not re-map the journey because we recently distilled a rule that dictates the outcome of this case. In Fletcher, we held that "a CBA's general durational clause applies to healthcare benefits unless [the CBA] contains clear, affirmative language indicating the contrary." 892 F.3d at 223.

Here, none of the CBAs contain such language; they state that the company will pay insurance premiums "in accordance with the terms and conditions of the [Welfare Benefit] Plan," that retirees "shall have the opportunity to continue" healthcare coverage, or that coverage for retirees "shall be" for "pre-65 coverage only." None of these statements says clearly and affirmatively that the relevant general durational clause doesn't control the termination of healthcare benefits—whether by reference to the general durational clause itself or by other language stating explicitly that healthcare benefits continue past the relevant agreement's expiration. And nowhere else in any of the CBAs does such language appear. This means the general durational clauses control the termination of Whirlpool's obligation to provide healthcare benefits to plaintiffs, which means the obligation ended when the last CBA expired.

At argument, counsel for plaintiffs contended that Fletcher doesn't control because no case to date has required a CBA to contain clear vesting language in order to vest benefits. But vesting language differs from language disconnecting specific benefits from a general durational clause,and Fletcher requires the latter, not the former. Put differently, Fletcher outlines a threshold requirement: either a CBA says clearly and affirmatively—that is, unambiguously—that its general durational clause doesn't control the termination of healthcare benefits, or the clause controls.

And this threshold requirement is just that: a threshold. If a CBA does unambiguously disconnect certain benefits from the agreement's general durational clause, the agreement might well vest those benefits—even absent clear vesting language. Or ambiguity as to vesting might exist. To make the call, a court would need to examine any "clues" that "spring from the CBA." See Cooper, 884 F.3d at 620. Although plaintiffs point to a number of clues they say show that the parties intended to vest healthcare benefits, those clues carry no clout here because no CBA unambiguously disconnects healthcare benefits from the governing general durational clauses. And that means the CBAs unambiguously do not vest lifetime healthcare benefits, which ends our inquiry. Fletcher, 892 F.3d at 224.

III.

For these reasons, we reverse the district court's ruling that the CBAs vest retiree healthcare benefits at unalterable levels to all plaintiffs, vacate the district court's judgment, and remand for proceedings consistent with this opinion.

JANE B. STRANCH, Circuit Judge, dissenting. I respectfully dissent from our recent line of cases denying lifetime healthcare benefits that employers clearly intended—and promised—to provide. I acknowledge that the Supreme Court corrected our Yard-Man case and its progeny, telling us to interpret collective bargaining agreements (CBAs) "according to ordinary principles of contract law." M&G Polymers USA, LLC v. Tackett (Tackett II), 135 S. Ct. 926, 933 (2015). But in doing so, the Court instructed that "[i]n this endeavor, as with any other contract, the parties' intentions control." Id. (quoting Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 682 (2010)).

The goal of contract interpretation is to give effect to the parties' intentions. We are failing that test. The district court decision that we reversed in Cole v. Meritor, Inc., 855 F.3d 695 (6th Cir. 2017), found that the employer repeatedly sent letters to employees that either "expressly use[d] the word 'lifetime'" or "use[d] the words 'life,' 'will continue' and 'for life.'" Cole v. ArvinMeritor, Inc., 515 F. Supp. 2d 791, 806 (E.D. Mich. 2006). Decades of benefits booklets and plan summaries issued under numerous CBAs "promise[d] that company-paid retiree health benefits [were] 'for life.'" Id. The district court decision that we reversed in Fletcher v. Honeywell International, Inc., 892 F.3d 217 (6th Cir. 2018), found that during collective bargaining a union negotiator "specifically stated that the Greenville retirees already had lifetime healthcare benefits," and "none of the [company] negotiators voiced any objection to [his] statement." 238 F. Supp. 3d 992, 1001 (S.D. Ohio 2017). The district court decision that we reversed in Gallo v. Moen, Inc., 813 F.3d 265 (6th Cir. 2016), found that "Defendant Moen's representative told the UAW that future retirees would only need to pay the co-premium set in the agreement and they would be covered for life." 27 F. Supp. 3d 832, 852 (N.D. Ohio 2014). And in IUE-CWA v. GE, company "managers and human resources representatives advised union-represented employees to retirebefore a new CBA took effect" to ensure their benefits would remain guaranteed for life. 745 F. App'x 583, 600 (6th Cir. 2018) (Stranch, J., concurring). Hundreds did so, suffering a lifetime of reduced pensions to maintain the promised healthcare coverage—which was then taken away from them. Id.; see also Gallo, 813 F.3d at 281 (Stranch, J., dissenting) ("One employee, for example, qualified for and took early retirement at age 58 and testified to suffering a 23% reduction in his lifetime monthly pension benefit."). In each case, we held that the CBAs were not ambiguous and so declined to look at the painfully clear evidence of what the parties intended—and what the employers promised.

Tackett II instructed us to remove our thumb from the scale, not move it to the other side. 135 S. Ct. at 935. Citing hornbook law, Justice Ginsburg noted that, "[u]nder the 'cardinal principle' of contract interpretation, 'the intention of the parties, to be gathered from the whole instrument, must prevail'"; she explained that in determining "what the contracting parties intended, a court must examine the entire agreement in light of relevant industry-specific 'customs, practices, usages, and terminology.'" Id. at 937-38 (Ginsburg, J., concurring) (quoting 11 Richard A. Lord, Williston on Contracts §§ 30:2, 30:4 (4th ed. 2012) (Williston))....