M & G Polymers USA, LLC v Tackett

Tackett Sued M & G arguing that he was entitled to lifetime cost free health insurance as a retiree under an expired collective bargaining agreement. The 6th Circuit held that the benefits vested because retiree benefits were not normally a collectively bargained issue. The Court reversed. It held that ERISA governed collective bargaining agreements which create welfare benefits, like retiree health insurance, are subject to normal principles of contract law such as effectuating the intent of parties and plain language controlling. Because the 6th Circuit approach of treating retiree benefits in collectively bargained agreements differently than other contracts and the approach lacked any evidentiary basis in the record, the case was remanded to apply correct contract principles in the first instance. Justice Ginsberg, joined by Breyer, Sotomayor and Kegan, added a concurrence noting that one of the principles to be applied is implied terms can arise through course of conduct or the practice in the industry and stated her view nothing in the Court’s opinion held otherwise.