As we discussed previously, the Supreme Court recently abrogated 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). The Yard-Man standard required that the court assume that, absent language to the contrary, collective bargaining agreements (CBAs) intended to vest retirees with lifetime benefits. In M&G Polymers USA v. Tackett, the Supreme Court found that the Yard-Man standard was inconsistent with the ordinary principals of contract law. Tackett was recently back before the Sixth Circuit for the first application of the revised CBA interpretation standard.
In Tackett, the retirees of M&G Polymers argued that the benefits contained in their CBA vested for the entirety of their lifetime. Originally, the Sixth Circuit determined that, applying Yard-Man, there was an intent to vest the retiree’s with lifetime benefits under the language of the CBA. On remand from the Supreme Court, M&G argued to the Sixth Circuit that the evidence presented at the trial court level was unnecessarily narrow because the parties were restricted by the district court’s application of Yard-Man. M&G argued that had they been able to present additional evidence to support their conclusion that there was no intent to vest retiree’s with lifetime benefits, the district court would have decided the case differently.
The Sixth Circuit noted that the Supreme Court’s decision prevented the presumption that the absence of specific language regarding the duration of the retiree’s benefits evidences that the benefits were not to vest in retirees, nor can the court presume that a general durational clause says everything about the intent to vest. The effect of the Supreme Court decision, in the eyes of the Sixth Circuit, was to eliminate any presumption of the intent to vest, meaning that the interpretation of a CBA will be based purely on the language of the document and extrinsic evidence that can be presented by the parties.
The Sixth Circuit ultimately decided that, even with regard to issues that were considered independent of Yard-Man, there was sufficient confusion about whether the district court or the parties were influenced by Yard-Man. As such, the Sixth Circuit found that the issues had been decided “in the shadow of Yard-Man” and sent the case back to the district court to consider additional evidence. As we noted after the Supreme Court decision, now that Yard-Man has been abrogated, issues surrounding CBA interpretation will need to be revisited for the first time in nearly 30 years.