TOLEDO, Ohio (Legal Newsline) – Retirees of Honeywell International Inc. have appealed an Ohio federal judge's ruling that found the company did not need to pay them lifetime health care benefits.
John Adam, one of the attorneys representing the retirees, told Legal Newsline that the plaintiffs appealed the decision on Jan. 11 to the U.S. Court of Appeals for the Sixth Circuit.
"The Sixth Circuit should reverse (the decision) and let the retirees have their day in court," Adam said.
Judge James G. Carr Sr., of the U.S. District Court for the Northern District of Ohio, Western Division, used the Supreme Court's decision in M&G Polymers USA LLC v. Tackett as the basis to dismiss the case in late December.
In that decision, the nation's highest court ruled that an expired collective bargaining agreement (CBA) could not be interpreted as a lifetime guarantee of coverage as the basis from dismissing the case, according to the judge's order.
Through a series of collective bargaining agreements, each of which had a specific term of about three years, Honeywell provided health care benefits to the plaintiffs. Honeywell continued to contribute for several years after the final agreement expired.
"We think the district court applied the wrong legal standard and failed to consider the complaint allegations that Honeywell showed by words and deeds that retiree health care survived the expiration of the CBA," Adam said.
Plaintiffs Ann Watkins and James Ulciny represented all retirees who were formerly represented by Local 533 of the Union, United Automobile, Aerospace and Agricultural Implement Workers of America in the claim.
The retirees filed suit after Honeywell notified them that it was ending its contributions toward their health care coverage, according to the judge's order. The plaintiffs claimed their collective bargaining agreement provided them, surviving spouses, and their dependents with guaranteed lifetime vesting health care benefits, according to the order.
In the suit, the plaintiffs alleged Honeywell's decision to terminate its contributions not only was a breach of contract, but violated the Employee Retirement Income Security Act (ERISA). They all had worked at Honeywell's plant in Fostoria, Ohio, which operated from 1973 to 2011.
Carr stated in his order that there was specific language in the contract that said the health care benefits would be paid "for the duration of this agreement." The collective bargaining agreement expired on Oct. 31, 2011. This language prevented him from interpreting the benefits as guaranteed for life, according to the order.
Rob Ferris, a Honeywell spokesman, told Legal Newsline that the company decided to terminate contributions to certain retirees because more affordable health insurance options were being made available to people nationwide.
"As more options for Americans to purchase affordable and comprehensive health insurance have become available, we decided to terminate medical and prescription drug coverage for certain retirees and their covered dependents at the Fostoria, Ohio; Greenville, Ohio; and Stratford, Connecticut sites," Ferris said.
Ferris added that retirees were given plenty of time to find replacement coverage.
"Those notified have had at least a full year to carefully review their coverage options and choose a plan that best suits their cost and coverage needs," he said.
According to the judge's order, Honeywell decided in December 2015 that it would terminate its health care contributions to these retirees, beginning Jan. 1, 2017.
Fostoria retirees were notified of the company's decision by a letter dated Dec. 28, 2015. Honeywell claimed this provided the plaintiffs with adequate time to find replacement health care coverage. At this time, Honeywell also provided plaintiffs with information about available health care options and resources for obtaining new coverage.