ERISA-Sixth Circuit Rules That Obligation To Provide Healthcare To Retirees Ended When The CBA Establishing The Obligation Expired

In Watkins v. Honeywell International Inc., No. 17-3032 (6th Cir. 2017), for almost 40 years, Honeywell International (or its predecessors) operated a manufacturing plant in Fostoria, Ohio.  Many union workers, including Ann Watkins and James Ulicny, spent most of their working years at the plant.  They retired at a time when Honeywell promised in a collective-bargaining agreement (the “CBA”) that it would pay for their health insurance.  But Honeywell’s plans for Fostoria changed.  When the CBA expired in 2011, Honeywell did not renew it.  It sold the plant and, later, stopped paying for its retirees’ healthcare.

The affected retirees filed suit seeking to require Honeywell to continue to pay.  The district court found that Honeywell’s promise to pay for healthcare ended when the CBA expired and dismissed the suit.

Upon analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) said that the CBA promises healthcare “for the duration of this Agreement,” and this promise means exactly that: Honeywell’s obligation to pay for its Fostoria retirees’ healthcare ended when the CBA expired.  As such, the Court affirmed the district court’s dismissal of the case.

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