High court rules retirees entitled to lifetime health benefits
A group of Menasha Corporation's retirees sued, arguing that the company violated two Collective Bargaining Agreements and ERISA when it took away retiree and spouse health care benefits. The trial court had agreed with the retirees with respect to their benefits, but rejected their claim as to spousal benefits. The Sixth Circuit examined the facts and concluded that Menasha's actions violated the vested rights of employees and spouses.
The Plaintiffs retired early (at age 62) during the term of the 1994 or the 1997 CBAs of the company. They were assured by H.R. representatives that they would have lifetime medical for themselves and spouses. They enjoyed Blue Cross coverage until October of 2006, when the company informed them that it was insitituting a new plan. Under the new graduated plan, the Defendant would contribute only $100.00 per month to employee health care by 2009.
Examining the facts, the Court held that Menasha contractually obligated itself to provide vested healthcare benefits with a promise "unalterable" under federal law.