Genessee County CMH cannot deny retirees clearly-promised health benefits
Genessee County Community Mental Health previously allowed employees age 60 and above to retire after 8 years of service with "vested" medical benefits. Six of its employees were drawing these benefits when the agency changed its employment policy under the collective bargaining agreement to make the retirees ineligible. The agency then filed an action in Circuit Court, asking the Court to rule that the benefits owed these existing retirees were not vested and that it was free to change the terms of the CBA and to deny health benefits to them, after the collective bargaining agreement expired, even though the employees had retired with an express promise of benefits.
The Court held, unanimously, that the express language of the collective bargaining agreement "vested" the benefits in the employees at the time of retirement. The agency did not have the right to renege on this promise.