Supreme Court Will Weigh in on Retiree Health Benefits in M&G Polymers v. Tackett

As the Supreme Court begins its October term today, one of the cases on the docket is M&G Polymers v. Tackett. In this case the Court will address how to interpret a collective bargaining agreement if it is silent with respect to an employer’s discretion to amend or terminate retiree health benefits. The federal circuits have been divided on this issue for many years.

M&G Polymers v. Tackett Overview

M&G Polymers v. Tackett originates from the Sixth Circuit, which followed its longstanding presumption that a collective bargaining agreement’s silence regarding the duration of retiree health benefit implies that the parties intended the benefits to vest and continue indefinitely. The Sixth Circuit first established this principle in its landmark UAW v. Yard-Man ruling in 1983. In previous cases the Third Circuit has applied the opposite presumption: that if the parties intend a retiree health obligation to survive the expiration of a collective bargaining agreement, then the agreement must explicitly state such.

Decisions in the Second and Seventh Circuits have represented a compromise position, holding that there must be “some language” in the collective bargaining agreement that reasonably supports the interpretation that retiree benefit obligations were intended to continue indefinitely.

Implications

The Supreme Court’s decision in this case should provide much needed clarity and may have significant implications for an employer’s right to amend or terminate retiree health benefits. The Court is scheduled to hear oral arguments in the case on November 10^th.