ERISA-Sixth Circuit Rules That CBA Does Not Promise Lifetime Retiree Health And Life Insurance Benefits, Since It Has A Reservation Of Rights Clause

In Witmer v. Acument Global Technologies, Inc., No. 11-1793 (6th Cir. 2012), the Sixth Circuit Court of Appeals (the “Court”) faced the question of whether Acument Global Technologies, Inc. (“Acument”) had promised lifetime, unchangeable healthcare and life insurance benefits to its retired employees.

In this case, a collective bargaining agreement a (“CBA”) governed the relationship between Acument and its retired employees. The CBA contained an express provision under which Acument reserved the right to modify or terminate the retiree healthcare benefits. Specifically, the provision stated that “The Company reserves the right to amend, modify, suspend, or terminate the Plan.” Such a provision is commonly referred to as a “Reservation of Rights” or “ROR” clause. Since the CBA had an ROR clause, the Court concluded that the CBA does not promise lifetime, unalterable retiree healthcare and life insurance benefits, and therefore Acument could change or terminate those benefits at will.

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