In M&G Polymers USA v. Tackett, the Supreme Court reversed the Sixth Circuit’s longstanding decision in International Union, United Auto, Aerospace, & Agricultural Implement Workers of Am. v. Yard-Man, Inc., 716 F. 2d 1476 (1983), which created an inference that, in the absence of evidence to the contrary, collective bargaining agreements intend to vest retirees with lifetime benefits. Justice Thomas’ opinion found that the Yard-Man presumptions were “inconsistent with ordinary principles of contract law” and that collective bargaining agreements should be construed like any other contract. It specifically held that “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.”
This decision may have far-reaching consequences. The Supreme Court’s flat-out rejection of the Sixth Circuit’s thirty-year-old Yard-Man presumption radically reshapes the prevailing law in the Circuit stretching back decades, and may require revisiting issues concerning vesting of pensions and other employee benefits.