ERISA-Supreme Court Rules That The Availability Of Retiree Health Benefits Ended When The Governing CBA Expired.

In CNH Industrial N.V., Et Al. v. Reese (decided by U.S. Supreme Court on February 20, 2018), the U.S. Supreme Court (the “Court” ) reiterated its belief expressed in M&G Polymers USA, LLC v. Tackett, 574 U. S. ___ (2015), in which it required the Sixth Circuit Court of Appeals to interpret collective-bargaining agreements according to ordinary principles of contract law.  In that case, the Court rejected the Sixth Circuit’s use of the “Yard-Man inferences,” under which a court presumes, in a variety of circumstances, that collective-bargaining agreements vested retiree health benefits for life.  In the instant case, the Court found that the Sixth Circuit had returned to the Yard-Man inferences.  Thus, the Court again reversed the Sixth Circuit’s decision and remanded the case for further proceedings.

The Court said the following about the instant case.  Shorn of Yard-Man inferences, this case is straightforward.  The 1998 collective bargaining agreement contained a general durational clause that applied to all benefits, unless the agreement specified otherwise.  No provision specified that the retiree health care benefits were subject to a different durational clause.  The agreement stated that the health benefits plan “r[an] concurrently” with the collective-bargaining agreement, tying the health care benefits to the duration of the rest of the agreement.  If the parties meant to vest health care benefits for life, they easily could have said so in the text.  But they did not.  And they specified that their agreement “dispose[d] of any and all bargaining issues” between them. Thus, the only reasonable interpretation of the 1998 collective bargaining agreement is that the retiree health care benefits expired when the collective-bargaining agreement expired in May 2004.  When the intent of the parties is unambiguously expressed in the contract, that expression controls, and the court’s inquiry should proceed no further.