ERISA-Sixth Circuit Rules That Plaintiffs Are Not Entitled To Lifetime Retiree Healthcare Benefits

In Fletcher v. Honeywell Int’l, Inc., No. 17-3277 (6th Cir. 2018), the plaintiffs, on behalf of themselves and other similarly situated retirees, retirees’ surviving spouses, and eligible dependents, filed suit against defendant Honeywell International, Inc. to enforce their rights to retirement healthcare benefits under a series of Collective Bargaining Agreements (“CBAs”).  The district court held that the CBAs were ambiguous and relied on extrinsic evidence for its conclusion that the parties intended retiree healthcare benefits to vest for life.  The defendant appeals.

Upon reviewing the case, the Sixth Circuit Court of Appeals (the “Court”) ruled that, in a suit under the LMRA and ERISA to enforce their retirement healthcare benefits rights under a series of CBA’s, the retirees were not entitled to lifetime healthcare benefits because the CBAs’ general durational clauses, which provided that the CBAs would remain in effect only until specified dates, were unambiguous and applied to the retirees’ healthcare benefits.  Further, ruled the Court, consideration of extrinsic evidence was not warranted because the CBAs’ general durational clauses applied to the retirees’ healthcare benefits since there was no clear, affirmative language to the contrary, and the CBAs unambiguously did not provide for vested lifetime retiree healthcare benefits, even though the CBAs explicitly provided for lifetime healthcare benefits to retirees’ surviving spouses and dependents.

Based on these rulings, the Court overturned the district court’s holding.