Kelly et al v. Honeywell International Inc.
ORDER granting in part and denying in part 44 Motion for Summary Judgment pursuant to the attached decision. Signed by Judge Vanessa L. Bryant on 02/08/2017. (Lee, E.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
DAVID KELLY, RICHARD NORKO,
ANNETTE DOBBS, PETER DELLOLIO,
HONEYWELL INTERNATIONAL, INC.
Civil Case Number
February 8, 2017
MEMORANDUM OF DECISION ON THE PARTIES’ CROSS-MOTIONS FOR
SUMMARY JUDGMENT [DKTS. 44, 45]
This case is about the decision of Defendant Honeywell International,
Inc. (“Honeywell”) to terminate Plaintiffs retirees’ full medical coverage
benefits. Plaintiffs David Kelly, Richard Norko, Annette Dobbs, and Peter
Dellolio (collectively, “Plaintiffs”) are retired union workers and a surviving
spouse who allege that the termination of such benefits constitutes an
anticipatory breach of the collective-bargaining agreement; a violation of the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§
1002(1), 1132; and a breach of Honeywell’s fiduciary duty under ERISA, 29
U.S.C. § 1104(a). [Dkt. 1 (Pls.’ Complaint)]. Before the Court are crossmotions for summary judgment.
At issue is whether and under what
circumstances the provisions of the CBA and the incorporated documents
create a vested right for retirees to obtain lifetime medical coverage benefits.
STATEMENT OF FACTS
A. The Parties
Plaintiffs David Kelly, Richard Norko, and Peter Dellolio are union
members who worked at a plant in Stratford, Connecticut (“Plant”) that
produced a variety of aerospace products and gas turbine engines for Army
helicopters and tanks. [Dkt. 45-2 (Def.’s Local Rule 56(a)(1) Statement), ¶ 1;
Dkt. 54 (Pls.’ Local Rule 56(a)(2) Statement), ¶ 1; see Dkt. 44-2 (Pls.’ Local
Rule 56(a)(1) Statement), ¶ 5; Dkt. 55-1 (Def.’s Local Rule 56(a)(2) Statement),
¶ 5]. They retired with a pension and medical coverage benefits between
June 1997 and October 1998. [See Dkt. 44-2, ¶¶ 1-3; Dkt. 55-1, ¶¶ 1-3].
Plaintiff Annette Dobbs is the surviving spouse of a deceased union retiree
who retired with a pension and medical benefits in July 1999. [Dkt. 44-2, ¶ 4;
Dkt. 55-1, ¶ 4]. The Court certified a class consisting of all Honeywell retirees
who retired since October 28, 1994, whose medical insurance benefits
Honeywell announced it intends to terminate.
[See Dkt. 51 (Order Mot.
Class members are retired Plant maintenance and
production workers represented by the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America
(“UAW”) Local 1010 and office clerical and technical workers represented by
UAW Local 376 (collectively, the “Union”).
On September 30, 1998, the Plant, which was owned by Honeywell,
closed. [Dkt. 45-2, ¶ 42; Dkt. 54, ¶ 42]. Textron Corporation (“Textron”)
owned the Plant from 1984 until AlliedSignal, Inc. (“AlliedSignal”) purchased
the Plant on or about October 28, 1994. [Dkt. 45-2, ¶¶ 5-7; Dkt. 54, ¶¶ 5-7].
Honeywell subsequently acquired AlliedSignal, which operated the Plant
until it closed. [Dkt. 44-2, ¶ 7; Dkt. 55-1, ¶ 7].
Honeywell currently provides the named Plaintiffs and putative class
members their medical coverage benefits and has done so throughout their
[See Dkt. 45-2, ¶ 8; 54, ¶ 8].
In December 2015 Honeywell
announced that it would terminate such benefits on December 31, 2016, but
pursuant to an agreement stemming from this litigation the benefits are
currently scheduled to terminate on February 28, 2017. [See Dkt. 53 (Pls.’
Opp’n to Def.’s Mot. Summ. J.), at 1 n. 2].
B. The Agreements
The Plaintiffs’ rights to retiree health benefits are governed by three
Supplemental Agreement (“SA”), and the Effects Bargaining Agreement
(“EBA”) (collectively, “the Agreements”), the pertinent provisions of which
are set forth below. Textron and the Union negotiated and entered into the
CBA, effective May 30, 1994.1 [See Dkt. 45-2, ¶ 9; Dkt. 54, ¶ 9; Dkt. 45-5 (Def.’s
Mot. Summ. J. Ex. 3, Local 376/Textron CBA), at 4]. By this time, AlliedSignal
Locals 1010 and 376 had a “tandem bargaining relationship” wherein
Textron extended the agreement and economic package negotiated with
Local 1010 to Local 376. [Dkt. 45-2, ¶ 10; Dkt. 54, ¶ 10]. Local 376 negotiated
their respective CBA separately but concurrently. [Dkt. 45-2, ¶ 11; Dkt. 54, ¶
11]. Ultimately, all agreements referenced in this case are substantially
similar and the relevant provisions are materially identical. [Dkt. 45-2, ¶ 11
n. 1; Dkt. 54, ¶ 11]. The Court will thus reference the Union agreements in
the singular and cite to the Local 376 agreements.
was in discussions with Textron to purchase the Plant, and the sale was
contingent upon a CBA negotiation acceptable to AlliedSignal. [See Dkt. 452, ¶ 14; Dkt. 54, ¶ 14]. AlliedSignal representatives did not directly participate
in the process as they communicated only with Textron representatives, but
they ultimately approved the CBA and acquired Textron. [See Dkt. 45-2, ¶¶
16-17; Dkt. 54, ¶¶ 16-17]. The relevant CBA provisions are as follows:
Article XI, Group Insurance, Section 2: “The details and levels of
the Group Insurance benefits hereinabove specified are more fully
described and incorporated in the Supplemental Agreement
covering Insurance.” [Dkt. 45-5, at 46].
Article XVIII, Effects Bargaining Agreement: “The Company and the
Union have agreed to certain terms, conditions and benefits which
shall be applicable in the event that the Company should sell the
assets to a third-party purchaser.
These commitments will be
incorporated into an Effects Bargaining Agreement which shall be
a part hereof as a supplement.” [Id. at 70].
Article XIX, Duration, Section 1: “The Union agrees that during the
term of the Agreement it will not make any demands,
representation or requests to the Company or to any governing
body to enter into collective bargaining negotiations with respect
to employee pensions and other retirement programs, salaries,
merit or promotional increases or any health welfare plan,
inasmuch as these matters have been subject to the collective
bargaining procedure in accordance with the law and duly settled
by this Agreement and not subject for further negotiations during
its term or any addition, thereto.” [Id. at 71].
Article XIX, Duration, Section 3: “Except as otherwise provided
herein, this Agreement shall become effective May 30, 1994, and
shall remain in effect, up to and including June 6, 1997, and shall
automatically renew itself from year to year thereafter unless
written notice to terminate or amend the Agreement is given by
either party to the other party at least sixty (60) days prior to its
expiration or any annual renewal thereof.” [Id. at 72].
Article XIX, Duration, Section 3(b): “In the event that negotiations
for an amended Agreement shall continue beyond the expiration of
the term of this Agreement, this Agreement shall continue in full
force and effect, provided, however, that either party may then
terminate this Agreement upon ten (10) days written notice to the
other party.” [Id. at 73].
As referenced in the CBA, Textron and the Union negotiated the SA
conferring specific Group Insurance benefits, which included medical health
care benefits offered to employees and retirees. [See Dkt. 45-2, ¶¶ 28, 33;
Dkt. 54, ¶ 28, 33]. AlliedSignal agreed to assume the provisions of the SA.
[Dkt. 45-2, ¶ 37; Dkt. 54, ¶ 37]. The relevant SA provisions are as follows:
Article XX, General Provisions, Section 17(d): “If the Collective
Bargaining Agreement is cancelled in whole or in part benefits
hereunder will immediately cease.” [Dkt. 45-7 (Def.’s Mot. Summ. J. Ex.
5, Local 376/Textron SA), at 78].
Article XX, General Provisions, Section 23(b): “This Agreement shall
be effective as of May 30, 1994, and shall remain in full force and effect
without change, to and including June 6, 1997 and shall automatically
renew itself from year to year thereafter unless written notice to
terminate or amend this Agreement shall be given by either party to
the other at least sixty (60) days prior to the renewal thereof. . . . [I]n
the event that such negotiations shall continue beyond the expiration
of the term of this Agreement, this Agreement shall continue in full
force and effect, provided, however, that either party may terminate
this Agreement upon ten (10) days written notice to the other party.”
[Id. at 83].
Textron and the Union also entered into the EBA, which delineated the
benefits to which the Union’s members would be entitled upon and after
AlliedSignal’s acquisition of Textron. [Dkt. 45-2, ¶ 19; Dkt. 54, ¶ 19; Dkt. 459 (Def.’s Mot. Summ. J. Ex. 7, Local 376/Textron EBA), at 1]. AlliedSignal
agreed to assume the provisions of the EBA. [Dkt. 45-2, ¶ 37; Dkt. 54, ¶ 37].
The relevant EBA provisions are as follows:
INSURANCE, 1(b): “The coverage to be furnished shall include the
Group Medical Plan for the bargaining unit which is to be effective
under the 1994 labor agreement, as well as the life insurance and
AD&D coverage likewise so effective. Dependent coverage shall
continue for employees having such coverage when laid off.” [Dkt.
45-9, at 1-2].
PENSIONS, 2: “(a) All current retirees shall continue to receive
monthly pension benefits as provided for under the Pension Plan. (b)
All past and future retired employees and surviving spouses shall
continue to receive their full monthly pension, including supplements
if any, and full medical coverage as provided in the Pension Plan and
Group Insurance Agreement, as now in effect or as hereafter modified
by the parties for the life of the retiree or surviving spouse.” [Id. at 2
DURATION (19): “This Effects Bargaining Agreement shall be effective
as of May 30, 1994, and shall remain in effect until midnight on June
6, 1997, but not thereafter unless renewed or extended in writing by
the parties. It is understood that expiration of this Agreement shall
not foreclose . . . the post-expiration presentation in a timely fashion
of claims regarding matters arising out of the application of its terms
prior to the expiration date.” [Id. at 16].
The Agreements represent the last collectively-bargained agreements
to govern the Plant workers’ benefits. [Dkt. 45-2, ¶ 25; Dkt. 54, ¶ 25]. They
became effective May 30, 1994, and expired on June 6, 1997.2 [Dkt. 45-2, ¶¶
25, 40; Dkt. 54, ¶¶ 25, 40].
The duration provisions in the CBA and SA provide they “shall
automatically renew . . . from year to year . . . unless written notice to
terminate or amend the Agreement is given. . . .” [Dkt. 45-5, at 72; Dkt. 45-7,
Summary judgment should be granted if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). The moving party bears the burden of proving
that no genuine factual disputes exist. See Vivenzio v. City of Syracuse, 611
F.3d 98, 106 (2d Cir. 2010). “In determining whether that burden has been
met, the court is required to resolve all ambiguities and credit all factual
inferences that could be drawn in favor of the party against whom summary
judgment is sought.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986)). If there is any evidence in the record that could reasonably
support a jury’s verdict for the nonmoving party, summary judgment must
at 83]. AlliedSignal gave notice to Local 1010 and 376 of its intention to
terminate the CBA “and all related side letters and/or sub-agreements or
appendices of any nature” effective midnight June 6, 1997. [Dkt. 45-19 (Ex.
17, AlliedSignal Notice to Local 1010); Dkt. 45-19 (Ex. 18, AlliedSignal Notice
to Local 376)]. The Court determines these letters to be sufficient notice of
intent to terminate the Agreement, wherein negotiations would commence
pursuant to Article XX Section 23(b) of the CBA and Article XX Section 23(b)
of the SA. [See Dkt. 45-5, at 73; Dkt. 45-7, at 83]. There is no documentary
evidence indicating either party provided ten days written notice of
termination post-expiration, but during a hearing before an ALJ in In re Allied
Signal Aerospace, a Division of Allied Signal, Inc., Nos. 34-CA-7898-2, 34-CA7905 (N.L.R.B. Oct. 6, 1998), counsel questioning Mr. Bocik (Vice President
of Labor Relations for AlliedSignal) stated, “We all agree the contracts were
expiring on June 6, 1997.” [Dkt. 45-18 (Def.’s Mot. Summ. J. Ex. 16 (NLRB
Hearing, Oct. 6, 1998), at 100:13-101:2]. The parties do not dispute that the
Agreements expired on June 6, 1997. [See Dkt. 45-2 ¶¶ 25, 40; Dkt. 54 ¶¶ 25,
40]. While the Court notes that counsel’s reference to “the contracts” during
the NLRB hearing is vague, and may have referred only to Locals’ EBA
contracts, the Court finds the totality of evidence and parties’ stipulation is
sufficient to establish the Agreements all terminated on June 6, 1997.
Am. Home Assurance Co. v. Hapag Lloyd Container Linie,
GmbH, 446 F.3d 313, 315–16 (2d Cir. 2006) (internal quotation marks and
In addition, determinations of the weight to accord
evidence or assessments of the credibility of witnesses are improper on a
motion for summary judgment, as such are within the sole province of the
jury. Hayes v. New York City Dep’t of Corr., 84 F. 3d 614, 619 (2d Cir. 1996).
“In order to defeat a summary judgment motion that is properly
supported by affidavits, depositions, and documents as envisioned by Fed.
R. Civ. P. 56(e), the opposing party is required to come forward with materials
envisioned by the Rule, setting forth specific facts showing that there is a
genuine issue of material fact to be tried.” Gottlieb v. Cty. of Orange, 84 F.3d
511, 518 (2d Cir. 1996) (internal citation omitted). A plaintiff may not rely
solely on “the allegations of the pleadings, or on conclusory statements, or
on mere assertions that affidavits supporting the motion for summary
judgment are not credible. Id. (internal citations omitted). “At the summary
judgment stage of the proceeding, [a plaintiff is] required to present
admissible evidence in support of her allegations; allegations alone, without
evidence to back them up, are not sufficient.” Welch–Rubin v. Sandals
Corp., No. 3:03CV481 (MRK), 2004 WL 2472280, at *1 (D. Conn. Oct. 20, 2004)
(citing Gottlieb, 84 F.3d at 518); see Martinez v. Conn. State Library, 817 F.
Supp. 2d 28, 37 (D. Conn. 2011). Where there is no evidence upon which a
jury could properly proceed to find a verdict for the party producing it and
upon whom the onus of proof is imposed, such as where the evidence
offered consists of conclusory assertions without further support in the
record, summary judgment may lie. See Fincher v. Depository Trust and
Clearance Co., 604 F.3d 712, 726-27 (2d Cir. 2010).
On cross-motions for summary judgment the same standard applies.
Morales v. Quintel Entm’t, Inc., 249 F.3d 115, 121 (2d Cir. 2001). “Where
‘parties file[ ] cross-motions for summary judgment [,] . . . each party’s
motion must be examined on its own merits, and in each case all reasonable
inferences must be drawn against the party whose motion is under
consideration.” Fireman’s Fund Ins. Co. v. Great Am. Ins. Co. of New York,
822 F.3d 620, 631 n. 12 (2d Cir. 2016) (citing Morales, 249 F.3d at 121)).
Counts I and II relate to Defendant’s ERISA violation under 29 U.S.C. §
1132 for Defendant’s alleged anticipatory breach of the CBA and
incorporated agreements in deciding to terminate Plaintiffs’ lifetime full
medical coverage benefits. Count III is a breach of fiduciary duty claim
relating to the Defendant’s decision to terminate such benefits. The Court
will first address Counts I and II together and then address Count III.
A. Contractual Vesting
Resolution of the motions for summary judgment before the Court
raises a question of law, namely the interpretation of the Agreements. The
Labor Management Relations Act (“LMRA”) confers jurisdiction upon federal
courts to “resolve disputes between employers and labor unions about
collective-bargaining agreements.” M & G Polymers USA, LLC v. Tackett,
135 S. Ct. 926, 933 (2015) (citing 29 U.S.C. § 185). Plaintiffs allege their
collectively bargained lifetime full medical coverage constitutes an
employee welfare benefit plan under ERISA, 29 U.S.C. § 1002(1). [Dkt. 1 (Pls.’
Complaint), ¶¶ 47-53]. A plaintiff may bring a civil action under ERISA, 29
U.S.C. § 1132, “(A) to enjoin any act or practice which violates . . . the terms
of the plan, or (B) to obtain other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of . . . the terms of the plan.
. . .” 29 U.S.C. § 1132(a)(3). There are two types of employee benefit plans
set forth under ERISA: pension plans and welfare benefit plans. See 29
U.S.C. §§ 1002(1)-(3). Any pension and welfare benefits plans found within a
collective-bargaining agreement is subject to the rules under ERISA. See 29
U.S.C. § 1002(1) (defining “employee welfare benefit plan” or “welfare benefit
plan”), § 1002(2)(A) (defining “employee pension benefit plan” or “pension
plan”); Tackett, 135 S. Ct. at 933. In sum, the LMRA confers the right to sue
in federal court to resolve a dispute from a collective bargaining agreement,
while ERISA states the rights which a party may seek to enforce in that suit,
and as such the Court addresses the Plaintiffs’ ERISA claim for their alleged
lifetime medical coverage benefits.
ERISA treats pension plans and welfare benefits plans differently,
specifically with respect to the vesting of such plans; ERISA explicitly
exempts welfare benefits plans from minimum funding and vesting
standards that govern pension plans. See Tackett, 135 S. Ct. at 933 (citing
29 U.S.C. §§ 1053, 1082, 1083, 1084, 1051(1), 1081(a)(2)). In general, ERISA
does not create a “substantive entitlement to employer-provided health
benefits or any other kind of welfare benefits,” and therefore an employer
may “adopt, modify, or terminate welfare plans.” Devlin v. Empire Blue Cross
and Blue Shield, 274 F.3d 76, 82 (2d Cir. 2001) (quoting Curtiss-Wright Corp.
v. Schoonejongen, 514 U.S. 73, 78 (1995)). An employee’s right to ERISAregulated welfare benefits does not vest unless and until the employer says
they do. Curtiss-Wright Corp., 514 U.S. at 78. Where a plan unambiguously
indicates retiree benefits are vested the plan will be enforced. See id.; In re
AMR Corp., 508 B.R. 296, 307 (Bankr. S.D.N.Y. 2014) (stating that ERISA
permits an employer to agree to vest employee welfare benefits); Abbruscato
v. Empire Blue Cross and Blue Shield, 274 F.3d 90, 97 (2d Cir. 2001) (referring
to this principle as “contractual vesting).
i. Ordinary Contract Principles
Approximately two years ago in M&G Polymers USA, LLC v. Tackett,
135 S. Ct. 926 (2015), the United States Supreme Court issued a unanimous
The CBA at issue and its related Pension, Insurance, and
Service Award Agreement provided retirees, their surviving spouses, and
their dependents with “a full Company contribution towards the cost of
[health care] benefits” and that the benefits would be given “for the duration
of this Agreement” subject to renegotiation in three years. Id. at 931. The
Court held that ordinary principles of contract law must be applied to
interpret the CBA to the extent they are consistent with federal labor policy.
Id. at 933 (abrogating Int’l Union, United Auto., Aerospace, and Agric.
Implement Workers of Am. (UAW) v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir.
Tackett re-establishes several contract principles that guide this Court
First, “[w]here the words of a contract in writing are clear and
unambiguous, its meaning is to be ascertained in accordance with its plainly
expressed intent.” Id. (quoting 11 R. Lord, Williston on Contracts § 30:6, p.
108 (4th ed. 2012) (Williston)). A court may draw upon “known customs or
usages in a particular industry” to determine the meaning of the contract,
but can only do so if the parties provide evidentiary support thereof. Id. at
935. Second, the Court acknowledged that welfare benefits generally are
free to be adopted, modified, or terminated by the employer, but reminded
lower courts that “[p]arties, however, can and do voluntarily agree to make
retiree benefits a subject of mandatory collective bargaining.” Id. at 936.
Third, “courts should not construe ambiguous writings to create lifetime
Fourth and by like measure, the contractual obligation
ceases in the ordinary course when the CBA is terminated, although “[t]hat
While ordinary principles of contract law apply, with respect to the
interpretation of labor laws the Court acknowledges that “[f]ederal
interpretation of the federal law will govern, not state law.” Textile Workers
Union of Am. v. Lincoln Mills of Alabama, 353 U.S. 448, 457 (1957); New York
v. Nat’l Servs. Indus., Inc., 352 F.3d 682, 686 (2d Cir. 2003); Peters v. Sikorsky
Aircraft Corp., No. 3:04cv1066 (PCD), 2006 WL 2331077, at *5 (D. Conn. Aug.
10, 2006) (stating that § 301 of the LMRA is interpreted to give “federal courts
the authority to fashion a uniform federal common law to resolve disputes
over collective bargaining agreements”).
principle does not preclude the conclusion that the parties intended to vest
lifetime benefits for retirees.” Id. at 937. The Court expressly noted that a
CBA can state “in explicit terms that certain benefits continue after the
agreement’s expiration. But when a contract is silent as to the duration of
retiree benefits, a court may not infer that the parties intended those benefits
to vest for life.” Id. (internal quotation marks and citations omitted).
Notably, Justice Ginsburg in her concurring opinion added that in
applying ordinary contract principles, “the intention of the parties, to be
gathered from the whole instrument, must prevail.” Id. (quoting 11 R. Lord,
Williston on Contracts § 30:2, p. 27 (4th ed. 2012) (Williston)) (emphasis
added). Even after a CBA has expired, a court may look at explicit terms or
implied terms of the expired agreement to place constraints on the employer.
Id. at 938; see also Litton Fin. Printing Div., Div. of Litton Bus. Sys., Inc., 501
U.S. 190, 203 (1991) (noting that one “source of possible constraints upon
the employer after the expiration date of a collective-bargaining agreement”
is “from the express or implied terms of the expired agreement itself”). For
example, the existence of “a provision stating that retirees ‘will receive’
health-care benefits if they are ‘receiving monthly pension’” is relevant
because retirees have an automatic vested right to pensions under ERISA.
Id. A “survivor benefits” clause is also relevant to the extent it gives the
surviving spouse the ability “to receive [the retiree’s heath-care] benefits . .
. until death or remarriage” if the retiree dies. Id.
ii. Other Honeywell Cases
Post-Tackett, it appears that Honeywell has with respect to other
unions decided to alter its longstanding practice of providing retirees with
medical coverage benefits. Vice President and Deputy General Counsel for
all of human resources at AlliedSignal, Kevin Covert, testified that he reevaluated CBAs for six to seven months after the Tackett decision.4 [Dkt.
45-17 (Covert Dep.), at 14:2-21].
In Fletcher v. Honeywell Int’l, Inc., No. 3:16-cv-302, slip op. at 1 (S.D.
Ohio Nov. 15, 2016), Honeywell notified retirees and their spouses on
December 28, 2015, that “Honeywell intends to terminate the retiree medical
and prescription drug coverage currently provided to you and your covered
dependents as of December 31, 2016.” The healthcare and prescription drug
coverage had been negotiated through a series of CBAs, the latest of which
expired on May 22, 2014, pursuant to the terms of the durational clause. Id.
at 1, 6. The provisions of the CBA expressly guaranteed lifetime pension
benefits but not lifetime health care benefits. Id. at 4. The court denied the
Motion to Dismiss after determining the relevant provisions of the contract
to be ambiguous with respect to the parties’ intent to vest lifetime retiree
benefits. Id. at 12.
Under similar circumstances, the court in Watkins v. Honeywell Int’l,
Inc., No. 3:16CV01925, slip op. at 1 (N.D. Ohio Dec. 16, 2016) arrived at the
The parties did not provide the Court any excerpts of the deposition
wherein he testified to his conclusions after reviewing the CBAs.
opposite conclusion for a CBA provision relating to health care benefits for
retirees, their spouses, their dependents, and surviving spouses. The 2009
CBA, which terminated in 2011, incorporated an Insurance Program that
provided the following for retirees: “The continued coverage to which retired
employees are entitled will be only the hospital-surgical-medical-drugdental-hearing aid coverages as described in Section 1 above.” Id. (quoting
Doc. 19, Ex. 2)). The general duration provision of the Insurance Program
expressly stated the Insurance Program would be effective “[f]or the
duration of the Agreement.” Id. at 2. The court found that “nothing in the
CBAs affirmatively states that Honeywell committed itself to provide
healthcare benefits for the life to the Insurance Program’s beneficiaries.” Id.
at 5. The court drew upon the CBA’s explicit vesting of pension benefits for
life and noted the absence thereof for healthcare benefits. Id. at 6. With this
observation in mind, the court granted the defendant’s Motion to Dismiss.
The Court recognizes that the Agreements in this case do not contain
the same language as those referenced in the aforementioned Honeywell
As is the nature of collective-bargaining, each local union may
bargain with the employer to achieve different results, and the Union in this
case believed its CBA to be top notch. On July 21, 1994, the Union provided
its members with a Tentative Agreement report at the ratification meeting,
This Agreement breaks new ground in many areas, especially
with its lifetime guarantees of protection for retiree pensions
and medical coverage. . . . We believe this proposed contract
and effects agreement being presented today is the best
agreement in the entire aerospace industry. We say that with
confidence because we’ve researched them all.
[Dkt. 24-10 (Opp’n Mot. Dismiss Ex. 10, Local 1010 UAW Tentative Agreement
1994-1997), at 1]. Therefore, the Court uses these Honeywell cases as a point
of comparison to interpret the provisions at issue with the understanding
that some CBAs may be more favorable to employees than others.
iii. The Agreements Before This Court
The first question the Court must answer is whether the EBA language
“for the life of” gave retirees and their surviving spouses a contractually
vested right in full medical coverage benefits for their entire lives. If the
answer is yes, the question the Court must then address is whether certain
individuals may not be entitled to these said rights because the Agreements
expired before the individual retired.
1. “For the Life Of” Is A Lifetime Duration
The parties fundamentally agree about the law surrounding
contractual vesting, as they both rely on Tackett and “ordinary principles of
contract law,” and they both argue the CBA and related documents are
unambiguous. [Dkt. 45-1, at 9; Dkt. 44-1, at 14-17]. The parties instead
disagree about how the Court should apply such principles to the EBA
provision: “for the life of the retiree or surviving spouse.” Plaintiffs argue
that the phrase constitutes an “explicit term[ ]” that unambiguously vests
medical coverage benefits for the lifetime of the retiree even after the CBA’s
expiration. [Dkt. 44-1, at 14; see Tackett, 135 S. Ct. at 937].
contends the phrase unambiguously does not vest such benefits on retirees,
because when read in light of the surrounding provisions it is clear the SA
expressly conditioned medical benefits on the existence of the CBA, which
expired in June 1997. [Dkt. 45-1, at 11-12; see Seabury Constr. Corp. v.
Jeffrey Chain Corp., 289 F.3d 63, 69 (2d Cir. 2002)]. Defendant also relies on
the EBA’s durational clause to argue the retiree medical benefits did not
vest. [Dkt. 45-1, at 15]. In summary, the Plaintiffs believe the phrase alone
is dispositive, and the Defendant believes the associated agreements are
instructive of the intent for the rights to cease after the contract expiration.
The Court finds that the application of “ordinary principles of contract
law” is a bit more nuanced than the contentions of either party. As noted
above, it is well established that welfare benefits such as medical benefits
do not automatically vest under ERISA and in most situations the employer
can adopt, modify, or terminate them for any reason. Abbruscato, 274 F.3d
at 96-97. However, parties are free to contract around this presumption, and
the benefits will be enforced if “the plan documents contain specific written
language that is reasonably susceptible to interpretation as a promise to
vest the benefits.” Bouboulis v. Transp. Workers Union of Am., 442 F.3d 55,
60 (2d Cir. 2006) (internal quotations marks omitted); see Tackett, 135 S. Ct.
at 936 (“Parties, however, can and do voluntarily agree to make retiree
benefits a subject of mandatory collective bargaining.”).
The existence of “lifetime” language does not automatically indicate
the benefits have vested. In Abbruscato, 274 F.3d at 94, 99, the Second
Circuit held that the retirees’ life insurance coverage was “not susceptible
to an interpretation that promises vested lifetime insurance benefits” even
though the plan provided “that 50% of your life insurance coverage remains
in force for the rest of your life, at no cost to you,” because the Benefit
Administration section of the same plan stated, “The company expects and
intends to continue the Plans in your Benefits program indefinitely, but
reserves its right to end each of the Plans, if necessary. The company also
reserves its right to amend each of the Plans at any time.”
Id. at 94
(emphases added). The Second Circuit expressly limited the holding to
situations where the same document contained both the promise and the
reservation of rights. See id. at 100.
Here, the documents present a different situation. Like the plan in
Abbruscato, the EBA contains a clause that appears to provide lifetime
coverage, as it clearly states, “All past and future retired employees and
surviving spouses shall continue to receive their full monthly pension,
including supplements if any, and full medical coverage as provided in the
Pension Plan and Group Insurance Agreement, as now in effect or as
hereafter modified by the parties for the life of the retiree or surviving
spouse.” [Dkt. 45-9, at 2 (emphases added)]. Unlike the plan in Abbruscato,
the EBA does not have a reservation of rights clause. Rather, the EBA only
contains a duration clause: “This [EBA] . . . shall remain in effect until
midnight on June 6, 1997, but not thereafter unless renewed or extended in
writing by the parties. It is understood that expiration of this Agreement shall
not foreclose . . . the post-expiration presentation in a timely fashion of
claims regarding matters arising out of the application of its terms prior to
the expiration date.” [Id. at 16]. The Second Circuit has held that a CBA
containing “lifetime” language but no reservation of rights clause is
enforceable as a unilateral contract. See Devlin, 274 F.3d at 84 (“Where the
offeror did not explicitly reserve the power to revoke, such an offer cannot
be revoked once the offeree has begun to perform.”); compare Devlin, 274
F.3d at 84 with Cherry v. Auburn Gear, Inc., 441 F.3d 476, 484 (7th Cir. 2006)
(finding that limiting benefits “for the period of this agreement” is a
reservation of rights clause).
Moreover, the mere existence of “a general duration clause is not
necessarily inconsistent with the ‘express or implied’ terms that may
promise ‘that certain benefits continue after the agreement’s expiration.”
Int’l Union v. Kelsey-Hayes Co., 130 F. Supp. 3d 1111, 1119 (E.D. Mich. 2015)
(quoting Tackett, 135 S. Ct. at 937). Indeed, “[a]ll collectively-bargained
vested benefits are promised in limited-duration CBAs with general duration
clauses.” Id. (where the CBA contained a duration clause for the whole CBA
expiration but also specific “retiree health care” and “retiree medical”
provisions). This logic is consistent with Tackett wherein Justice Thomas
noted, “[W]e have already recognized that ‘a collective-bargaining
agreement [may] provid[e] in explicit terms that certain benefits continue
after the agreement’s expiration.” Tackett, 135 S. Ct. at 937 (quoting Litton,
501 U.S. at 207). Such a determination comports with the “ordinary principle
of contract law” that “specific terms and exact terms are given greater
weight than general language.” Restatement (Second) of Contracts § 203(c)
(Am. Law Inst. 1981). Here, the CBA, SA, and EBA each contain general
duration clauses applicable to the entire provisions, but the Court must give
greater weight to the specific retiree medical coverage benefit provision of
the EBA granting such benefits for the lifetime of the retirees and surviving
spouses.5 The Court distinguishes this case from Watkins, where the CBA
between the union and Honeywell contained a general duration clause
without “affirmatively stat[ing] that Honeywell committed itself to provide
healthcare benefits for the life to the Insurance Program’s beneficiaries.”
Watkins, slip op. at 5.
The Court is not persuaded by the Defendant’s contention that the
durational language in the SA is “materially indistinguishable from the
reservation of rights clause.” [Dkt. 45-1, at 13]. Defendant cites Grove v.
Johnson Controls, Inc., No. 1:12-CV-02622, 2016 WL 1271328 (M.D. Pa. Mar.
31, 2016), wherein the CBA lacked an express reservation of rights clause.
Defendant argues that in Grove “the court nonetheless concluded that a
provision stating ‘[i]n the event [the] group plan is terminated, coverage for
[retirees] and [their] dependents will end immediately’ showed ‘that the
Company retained the power to terminate benefits, and, as such, any intent
to vest benefits would have rendered the provisions superfluous.’” [Dkt. 45-
The Court finds that the SA language, “If the [CBA] is canceled in whole or
in part benefits hereunder will immediately cease,” is a general durational
clause found within the “General Provisions” section. The language of this
section addresses “employees” rather than “retirees.”
1, at 13 (quoting Grove, 2016 WL 1271328 at *17)]. There is a fundamental
difference between Grove and the case before us that Defendant overlooked.
The CBA in Grove referenced by Defendant dealt with different “lifetime”
language: “Your health coverage is continued until your death—unless you
request termination of coverage or you do not make the required
contribution for this Plan. And your dependents’ health coverage will be
continued—while you are living. . . . [Surviving spouses] will remain eligible
until the earlier of death or remarriage.” Id. at *15. The district court in Grove
noted that “until your death” language is “not the functional equivalent of
lifetime language,” which according to the Seventh Circuit in Bland v.
Fiatallis N.A., Inc., 401 F.3d 779, 786 (7th Cir. 2005) is “stronger and more
explicit” with respect to vesting and means “for life.” 6
Grove, 2016 WL
In Bland, the Seventh Circuit denied summary judgment on the basis that
the contract containing lifetime language without a reservation of rights
clause was ambiguous as to vesting. Id. at 786-87 (“Further, in the absence
of a reservation of rights clause, we are convinced (not surprisingly) that in
the case before us ‘lifetime’ is durational, meaning ‘for life.’”). The “lifetime”
language in the Bland contracts are as follows:
“Lifetime” language is found in three plan documents. Thus, the
“Benefit for Retired Salaried Employees Plan” document
covering retired salaried employees who retired after Dec. 31,
1976, provides that health insurance and dental “... coverage
remains in effect as long as you or your surviving spouse are
living.” In addition, the “Health Benefits Plan” and “Benefits for
Retired Hourly Employees Plan” documents distributed to
hourly employees at FANA's Carol Stream and Deerfield plants
state that “[i]f a retired employee dies, the surviving spouse will
have basic coverage continued for his or her lifetime at no
cost.” Finally, the “Benefit Fact Sheets” provided to salaried
employees affected by shutdown of FANA's Springfield plant
state that employees would have “the retired employee benefits
in effect prior to March 1, 1985,” which plaintiffs contend were
1271328 at *17. Therefore, while the court determined that the “until your
death” language was limited to the existence of the CBA, the court likely
would have reached the opposite conclusion if the court had the Agreement
language before this Court, given its clear direction from the Seventh Circuit.
Defendant raises two more issues that the Court will now address.
First, Defendant cites the Surviving Dependent Coverage clause of the 1994
Local 1010 SA, which states, “[s]urviving dependents of a deceased retiree
(except Deferred Vested) shall remain covered for benefits under the
provision of this Agreement until (1) the date of death or remarriage of a
surviving spouse . . . ,” to argue that the surviving spouse medical benefits
did not survive the expiration of the CBA. [See Dkt. 45-1, at 20]. The Court
finds this provision inapplicable as it addresses coverage only for surviving
dependents and Defendant’s cited cases contain language explicitly
addressing surviving spouses. See Cherry, 441 F.3d at 483 (finding that “a
clause that provides benefits for surviving spouses until their death or
remarriage” did not implicitly extend the collectively-bargained insurance
agreement beyond the three-year term) (emphasis added); John Morrell &
Co. v. United Food and Commercial Workers Int’l Union, AFL-CIO, 37 F.3d
1302, 1307 (8th Cir. 1994) (where the relevant language was, “the above
coverage shall continue for the surviving spouse and dependent children
until the earlier of the surviving spouse’s death or remarriage”) (emphasis
those established in the “Benefit for Retired Salaried
Employees Plan,” noted above.
Id. at 784-85 (emphases added).
added). The Court will thus focus on the provision in the EBA that explicitly
address surviving spouse benefits—“for the life of the retiree or surviving
spouse”—as benefits for surviving dependents is not at issue in this case.
Second, Defendant argues that it is of no import that the clause “for
the life of the retiree or surviving spouse” appears within the EBA’s pension
section: “All past and future retired employees and surviving spouses shall
continue to receive their full monthly pension, including supplements if any,
and full medical coverage as provided in the Pension Plan and Group
Insurance Agreement, as now in effect or as hereafter modified by the parties
for the life of the retiree or surviving spouse.” [Dkt. 45-1, at 21-23 (emphasis
added); Dkt. 45-9, at 1 (emphases added)].
“[T]ying language could shed
light on the parties’ intent when it connected the duration of pensions to the
duration of health benefits (e.g., “[R]etirees ‘will receive’ health-care benefits
if they are ‘receiving a monthly pension’).” Gallo v. Moen Inc., 813 F.3d 265,
272 (6th Cir. 2016) (citing Justice Ginsburg’s concurrence in Tackett, 135 S.
Ct. at 938). The Court acknowledges that the connection between medical
coverage benefits and pensions is not tied in the same manner as Justice
Ginsburg’s example, see Tackett, 135 S. Ct. 926 at 938, but notes that the
similar language for both medical coverage and pensions supports the
weight of evidence within the contract of the Plaintiffs’ vested rights.
For the aforementioned reasons, the Court finds that the language,
“for the life of the retiree or surviving spouse” unambiguously indicates a
contractually vested right to lifetime full medical coverage benefits.
2. Eligibility for Contractually Vested Medical
Coverage Retirement Benefits is Ambiguous
The second question is whether all employees, including those who
retired after the Agreements expired, should be entitled to contractually
vested lifetime full medical coverage benefits. Although the language of the
contract unambiguously vests medical coverage benefits “for the life of the
retiree or surviving spouse,” the Court finds that the phrase, “All past and
future retired employees and surviving spouses shall continue to receive . .
.” is ambiguous as to whether the benefits vest prior to or subsequent to the
employee’s retirement. [Dkt. 45-9, at 2 (emphasis added)].
“[T]o vest means ‘[t]o give (a person) an immediate, fixed right of
present or future enjoyment.” In re AMR Corp., 508 B.R. at 313 (quoting
Black’s Law Dictionary (9th ed. 2009)).
Should the lifetime benefits vest
prior to retirement, i.e. by virtue of the employment or retirement eligibility,
any employee working at the Plant from 1994 until the Plant’s closure may
have been entitled to lifetime medical coverage. Plaintiffs advocate for this
interpretation. [See Dkt. 53, at 1 n. 1]. Should the lifetime benefits vest
subsequent to retirement, only employees who retired prior to the expiration
of the Agreements on June 6, 1997 would be entitled to receive such benefits.
See Tackett, 135 S. Ct. at 937 (“[C]ontractual obligations will cease, in the
ordinary course, upon termination of the bargaining agreement.”) (quoting
Litton, 501 U.S. at 207). Therefore, it is of critical importance that the Court
is presented with evidence sufficient to determine the moment through
which lifetime medical coverage benefits are vested to the retirees.
The parties have not presented the Court with any persuasive case
law as to this issue.7 When a court is confronted with ambiguous language,
“the ultimate determination of whether [the employer] promised lifetime
benefits should be left to a trier of fact, likely assisted by extrinsic evidence
to clarify the meaning of this ambiguous language.” Devlin, 274 F.3d at 85.
After analyzing the various agreements, the Court requires a hearing on the
limited issue of whether and at what point lifetime medical coverage benefits
became vested for employees who retired after the Agreements expired on
June 6, 1997. See Reese v. CNH Am. LLC, No. 04-70592, 2006 WL 2540952,
at *1 (E.D. Mich. Aug. 31, 2006) (addressing class certification and noting, “If,
for example, the language of the 1998 CBA demonstrates that the parties
intended for health insurance benefits for retirees to vest upon an
employee's eligibility for retirement, the current class is not overbroad”).
Here, there is extrinsic evidence of the parties’ intent, which suggests
that the parties intended all retirees, including those who retired after the
Agreements expired, to have vested lifetime medical coverage benefits.
First, the Court notes that Defendant’s payment of medical coverage from
Cases about the rights of “past and future” retirees merely reaches general
conclusions about vesting. See, e.g., Zino v. Whirlpool Corp., 47 F. Supp. 3d
561, 582 (N.D. Ohio 2014) (finding the employer’s rejection of the Union’s
proposed contract settlement language—“Group insurance for past and
future retirees remain the same”—“creates an inference that benefits at
issue are possibly not vested”); Jensen v. Greyhound Corp, 692 F. Supp.
1029, 1041 (N.D. Iowa 1987) (holding agreement language, for example where
insurance benefits “shall continue in effect” for past and future retirees,
supports a finding of vested lifetime benefits, although applying case law
later abrogated by Tackett).
the expiration of the contract until present to employees who retired after the
contract expiration (or their surviving spouses) weighs heavily in favor of a
finding that the Agreements lifetime benefits vested for these individuals.
Second, the Court finds it persuasive that Plaintiffs submitted into
evidence a total of 15 letters sent on June 1, 1998 (shortly before the Plant’s
closure and after the expiration of the Agreements), from AlliedSignal and
Local 1010 representatives to various union members, whereby the Pension
Board notified the union member of his or her early retirement pension
[Dkt. 24-12 (Pls.’ Opp’n Mot. Dismiss Ex. 12, Pension Board
Letters, June 1, 1998)]. Part of the early retirement pension benefits listed
are medical benefits, which include hospital insurance, basic medical
insurance, major medical insurance, dental insurance, prescription drug
insurance, and vision care insurance. [Id.]. Such evidence is indicative of
two things: (1) that Plaintiffs who retired after the expiration of the
Agreements already had vested rights in lifetime medical coverage, and (2)
that medical coverage benefits may have been intended to be incorporated
as pension benefits.
Third, AlliedSignal sent a letter to Former AlliedSignal Stratford Army
Plant Employees on September 30, 1998, regarding the plant closure that
would happen that day. [Dkt. 24-15 (Opp’n Mot. Dismiss Ex. 14, AlliedSignal
Plant Closure Letter, Sept. 30, 1998)]. The letter stated that the Retirement
Benefits Administration Office would supply information on retirement or
retiree medical benefits and would “assist [the individual] on such issues”
including “applying for retirement” and “applying for retiree medical
benefits.” [Id.]. As the letter refers broadly to the medical coverage benefits
for retirees, the logical conclusion is that the retiree medical benefits would
be for life as stated in the Agreements.
Fourth, as recently as 2005 Honeywell added a reservation of rights
clause to an Annual Enrollment document, but contacted David Kelly, who
retired after contract expiration, and possibly other retirees to say the
reservation of rights “does not pertain to retiree medical benefits negotiated
by a collective bargaining unit. Therefore please use this letter as a source
to disregard the statement.”
[Dkt. 24-21 (Opp’n Mot. Dismiss Ex. 21,
Honeywell Letter, March 18, 2005)]. Honeywell had previously made the
determination that “he and his spouse are eligible for lifetime retiree medical
coverage.” [Dkt. 24-13 (Opp’n Mot. Dismiss Ex. 13, AlliedSignal Letter, June
Lastly, the Court finds informative the Local 1010 UAW Decision &
Effects Agreement (July 21, 1994) report provided to Local 1010 members by
The report states, “The Purchaser (Allied Signal) agrees to
provide the full negotiated pension and medical coverage for all Local 1010
retirees and surviving spouses who retire after the date of this agreement for
the life of the retiree and surviving spouse.” [Dkt. 24-11 (Opp’n Mot. Dismiss
Ex. 11, Decision & Effects Agreement), at 1 (emphasis added)]. An argument
can be made for both parties: (1) in favor of Plaintiffs, that any Local 1010
employee who retires after the 1994 EBA takes effect can have lifetime
medical coverage benefits; or (2) in favor of Defendants, that the individual
must be a retiree or surviving spouse while the EBA is in effect. The Court
notes that while AlliedSignal agreed to provide for union members through
the provisions of the EBA, Covert testified that he primarily used the CBA
and SA to re-analyze the vesting of retiree medical coverage benefits after
the Tackett decision was rendered. [Dkt. 45-17, at 19:19-25]. Covert did not
mention the EBA. As the express language of the contract is ambiguous and
the extrinsic evidence is insufficiently developed, the Court finds that crossmotions for summary judgment should be denied as to this potential
subclass of individuals who retired after the Agreements expired on June 6,
B. Fiduciary Duty
Plaintiffs contend that Honeywell breached its fiduciary duty under
ERISA § 404(a) by “determining that it had a contractual right to terminate
these benefits without making any effort to obtain, let alone analyze, the plan
documents, including the CBAs and the EBAs that it had promised the
federal government it would honor.” [Dkt. 1, ¶ 58]. The language under
ERISA §§ 404(a)(1)(A), (B), and (D) provides:
[A] fiduciary shall discharge his duties with respect to a plan
solely in the interest of the participants and beneficiaries and—
(A) for the exclusive purpose of: (i) providing benefits to
participants and their beneficiaries; and (ii) defraying
reasonable expenses of administering the plan; (B) with the
care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; . . . (D) in
accordance with the documents and instruments governing the
plan insofar as such documents and instruments are consistent
with the provisions of this subchapter and subchapter III of this
29 U.S.C. §§ 1104(a). The threshold question for breach of ERISA fiduciary
duty is “whether that person was acting as a fiduciary (that is, was
performing a fiduciary function) when taking the action subject to
complaint.” Bell v. Pfizer, 626 F.3d 66, 73 (2d Cir. 2010) (quoting Pegram v.
Herdrich, 530 U.S. 211, 226 (2000)). A fiduciary must carry out said duties
pursuant to ERISA “to the extent that he or she exercises any discretionary
authority or discretionary control respecting management of the plan, or has
administration of the plan.” Devlin, 274 F.3d at 87 (quoting Varity Corp. v.
Howe, 516 U.S. 489, 498 (1996)) (internal quotation marks omitted). Such
fiduciary duties under ERISA apply to both pension and welfare plans.
Lockheed Corp. v. Spink, 517 U.S. 882, 891 (1996).
An employer is entitled to “wear two hats” as a plan administrator and
employer, and “not all actions by an employer fall under a fiduciary role.”
Bell, 626 F.3d at 74. With respect to the scope of the fiduciary’s duties, there
is a distinction between fiduciary functions that trigger ERISA liability and
“settlor” functions that do not. Coulter v. Morgan Stanley & Co. Inc., 753
F.3d 361, 367 (2d Cir. 2014). “Fiduciary duties include, for instance the
common transactions in dealing with a pool of assets: selecting
investments, exchanging one instrument or asset for another, and so on.
‘Settlor’ functions, in contrast, include conduct such as establishing,
funding, amending, or terminating a plan.” Id. (internal quotation marks and
citations omitted). Therefore, to the extent that Honeywell decided to
terminate Plaintiffs’ medical coverage benefits, it was acting as a “settlor”
rather than a “fiduciary” and is not subject to liability under ERISA on these
That being said, the scope of ERISA fiduciary duties also includes “a
duty to avoid intentional material misrepresentations in plan administrators’
communications with plan beneficiaries about the contents of a plan.” Bell,
626 F.3d at 74; see Devlin, 274 F.3d at 88 (“[A] fiduciary also has a ‘duty to
deal fairly and honestly with its beneficiaries.’”) (internal citations omitted).
A plan administrator that “affirmatively misrepresents the terms of a plan or
fails to provide information when it knows that its failure to do so might
cause harm . . . has breached its fiduciary duty to individual plan participants
and beneficiaries.” Abbruscato, 274 F.3d at 103 (quoting In re Unisys Corp.
Retiree Med. Benefit “ERISA” Litig., 57 F.3d 1255, 1264 (3d Cir. 1995)).
other words, “while the consideration of plan changes and the decision itself
may not be subject to fiduciary duties, communicating to employees about
those potential changes is a discretionary act of plan management and
administration that falls within the statutory definition of ‘fiduciary’ acts.”
Hudson v. Gen. Dynamics Corp., 118 F. Supp. 2d 226 (D. Conn. 2000) (citing
Varity Corp. v. Howe, 516 U.S. 489, 502 (1996)). A plaintiff “assert[ing] a
breach of fiduciary duty claim based on a material misrepresentation or
omission . . . must establish detrimental reliance.” Bell, 626 F.3d at 75. To
establish detrimental reliance means “there must be a substantial likelihood
that the misrepresentation would mislead a reasonable employee in making
an adequately informed decision about if and when to retire.” Id.
The Court finds the breach of fiduciary duty claim moot as to Plaintiffs
who retired before the agreements expired, because summary judgment in
their favor on Counts I and II remedies the harm suffered. It is possible that
Plaintiffs who retired after the expiration of the contract detrimentally relied
on the employer’s promise if they would have had vested rights to lifetime
medical coverage benefits.
For example, evidence shows that some
employees were eligible for early retirement. [See, e.g., Dkt. 44-4 (Pls.’ Mot.
Summ. J. LRS1, Norko Retirement Benefit Letter, October 8, 1998), at
HON_00004661; Dkt. 44-5 (Pls.’ Mot. Summ. J. LRS2, Dellolio Retirement
Benefit Letter, June 16, 1997), at HON_00004694].
If AlliedSignal had
represented to employees that they would not be entitled to lifetime medical
coverage if they retired after the expiration of the EBA, it is conceivable that
many eligible employees would have retired prior to the contract expiration.
The Court notes a few examples of how a plaintiff could have
detrimentally relied on a promise of lifetime medical coverage benefits. As
mentioned above, a 1994 union report about recently bargained-for benefits
contained language as follows: “[The EBA] breaks new ground in many
areas, especially with its lifetime guarantees of protection for retiree
pensions and medical coverage.” [Dkt. 44-10 (Kelly Dep.), at 133:10-22; see
Dkt. 24-10, at 1]. Kelly testified Local 1010 members received this handbook
at the ratification meeting and it was approved by George Metzger and Frank
McNally of Textron, who relayed the information to AlliedSignal. [See Dkt.
44-10, at 77:23-78:24].
It is possible members could have detrimentally
relied on this document. Another example is Richard Norko’s testimony that
in 1998 he met with Mary Ann Palmiero, “who was working in benefits,” and
Palmiero indicated “that [he] and [his] wife would be covered for life in [their]
medical benefits amongst other things which were how much money [he]
would make in [his] retirement, . . . what [he] would get, what [he] was entitled
to. . . .” [Dkt. 44-18 (Norko Dep.), at 17:10:18].
Evidence does not
demonstrate whether such retirement meetings were held for all class
members prior to the Agreements’ expirations or, alternatively, prior to the
Without determining at what point the employee obtained the vested
right to lifetime full medical coverage, the Court cannot yet address the
breach of fiduciary duty claim as it may be moot after the hearing.
Notwithstanding, the Court finds there is a triable issue of fact as to whether
Honeywell breached its fiduciary duty by leading employees who retired
after the expiration of the Agreements to believe they were entitled to lifetime
medical coverage benefits.
For the foregoing reasons, the Court GRANTS Summary Judgment as
to Counts I and II in favor of the Plaintiffs who retired before expiration of the
Agreements. The Court DENIES Plaintiffs’ Motion for Summary Judgment
as to Counts I and II for the subclass of Plaintiffs who retired after expiration
of the Agreements. The Court finds Count III is moot as to Plaintiffs who
retired before expiration of the Agreements and DENIES Defendant’s Motion
for Summary Judgment as to Count III for the subclass of Plaintiffs who
retired after expiration of the Agreements. The Court will hold a hearing on
damages after determining the scope of Plaintiffs whose rights are
IT IS SO ORDERED.
_ ______ /s/ ______________
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: February 8, 2017
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