By PETER HUSSMANN
The Eighth Circuit Court of Appeals today ruled in favor of Whirlpool on the UAW Local 997's appeal of the district court's finding that the corporation had the right to change the medical benefits for 3,000 Newton-based Maytag retirees and their dependents.
The court rejected the union's arguments that no case or controversy existed at the time Whirlpool filed suit against the union in 2008 and that the retiree health benefits were vested through union contracts.
"In this case, Whirlpool had contractual obligations to the retirees and to the Union under the expiring CBA (collective bargaining agreement), statutory responsibilities to the retirees ... and statutory responsibilities to the Union under the federal labor laws," the ruling states. "As the district court found, Whirlpool knew from decades of negotiations that the Union considered retiree health benefits provided in the 2004 CBA to be vested. But Whirlpool believed they were not vested and therefore subject to unilateral change when the CBA expired.
"When Whirlpool proposed on July 1 to modify retiree health benefits in a new CBA, the Union advised it would not bargain this issue. Because retireee benefits are a permissive rather than a mandatory subject to collective bargaining, the Union's position foreclosed Whirlpool from negotiating around the vesting issue, as the parties had done in the past. Thus, the only way Whirlpool could test its position on this contractual issue, as it was entitled to do, was to unilaterally modify the benefits being paid to over 3,000 Newton retirees.
"We agree with the district court an actual case or controversy existed at the time Whirlpool filed its action on July 24, 2008."
The Eighth Circuit also rejected the vesting arguments made by the union.
"The issue is whether members of the retiree class have vested rights to previously granted retiree health benefits," the ruling states. (Federal law) does not mandate that employee welfare benefit plans provide vested benefits. Therefore, unless an employer has contractually agreed to provide vested retiree benefits, it may unilaterally modify or terminate the benefits at any time.
"The Union argues the parties' bargaining history provides 'overwhelming extrinsic evidence' of their intent to vest retiree medical benefits. The district court thoroughly evaluated this evidence and concluded the Union did not satisfy its burden to its failure 'to include express vesting language or present specific evidence that the Company agreed to provide vested retiree medical benefits.' We agree with the Court's analysis.
The appeal was heard by Judges James B. Loken of Minneapolis, Steven M. Colloton of Des Moines, and Bobby E. Shepherd of El Dorado, Ark. Judge Loken wrote the opinion which can be read here.