UAW v. Honeywell Int'l, Inc.

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0107p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
INTERNATIONAL UNION, UNITED AUTOMOBILE, ┐
AEROSPACE AND AGRICULTURAL IMPLEMENT │
WORKERS OF AMERICA (UAW); THOMAS BODE, │
BRUCE EATON, WILLIAM BURNS, PETER ANTONELLIS, │
and LARRY PRESTON, for themselves and others │
similarly situated, > Nos. 18-1471/1975/1976
│
Plaintiffs-Appellees/Cross-Appellants, │
│
v. │
│
│
HONEYWELL INTERNATIONAL, INC., │
Defendant-Appellant/Cross-Appellee. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:11-cv-14036—Denise Page Hood, Chief District Judge.
Argued: June 19, 2019
Decided and Filed: April 3, 2020
Before: GILMAN, STRANCH, and NALBANDIAN, Circuit Judges.
_________________
COUNSEL
ARGUED: K. Winn Allen, KIRKLAND & ELLIS LLP, Washington, D.C., for
Appellant/Cross-Appellee. John G. Adam, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan,
for Appellees/Cross-Appellants. ON BRIEF: K. Winn Allen, Craig S. Primis, P.C., Matthew P.
Downer, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant/Cross-Appellee. John G.
Adam, Stuart M. Israel, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, William
Wertheimer, LAW OFFICE OF WILLIAM WERTHEIMER, Brooklyn, New York, for
Appellees/Cross-Appellants.
NALBANDIAN, J., delivered the opinion of the court in which GILMAN, J., joined, and
STRANCH, J., joined in part. STRANCH, J. (pp. 19–24), delivered a separate opinion
concurring in part and dissenting in part.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 2
_________________
OPINION
_________________
NALBANDIAN, Circuit Judge. For decades, Honeywell International (Honeywell) and
its employees entered into collective bargaining agreements (CBAs) in which Honeywell
promised to cover the full cost of its retirees’ health insurance premiums. That changed for
certain retirees in 2003, when the parties negotiated a CBA obligating Honeywell to pay “not
. . . less than” a specified amount beginning in 2008. This dispute largely turns on the meaning of
that revision to Honeywell’s commitment. The retirees argue that: (1) the pre-2003 CBAs vested
lifetime, full-premium benefits for all pre-2003 retirees, and (2) the 2003, 2007, and 2011
CBAs vested—at a minimum—lifetime, floor-level benefits for the remaining retirees.
Honeywell maintains that none of the CBAs vested lifetime benefits of any kind, and the CBAs’
“not . . . less than” language simply ended the company’s obligation to make full-premium
contributions.
In two summary judgment orders, the district court decided that: (1) none of the CBAs
vested lifetime benefits; (2) the “not . . . less than” language did not end Honeywell’s obligation
to make full-premium contributions until each CBA’s expiration date; and (3) Plaintiffs’ claims
that Honeywell had taken certain “windfall” advantages at the expense of retirees were moot.
We agree with the district court’s first conclusion, disagree with its second conclusion, and reject
Plaintiffs’ windfall claims on the merits. We therefore affirm in part and reverse in part.
I.
Beginning in 1965, Honeywell and the United Auto Workers (UAW) labor union
negotiated a series of CBAs in which Honeywell agreed to pay “the full [healthcare benefit]
premium or subscription charge applicable to the coverages of [its] pensioner[s]” and their
surviving spouses. (R. 101-2, 1965 CBA at PageID 6469.) Over the next four decades, each
successive CBA likewise guaranteed full-premium contributions on behalf of pensioners and
their surviving spouses. Each CBA also contained a general durational clause stating that the
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 3
agreement would expire on a specified date and time, after which the parties would negotiate a
new CBA.
When the 1999 CBA expired in 2003, Honeywell’s negotiators met with the UAW to
discuss the company’s payment obligation in the next agreement. In a March 2003 presentation
titled “The Cost of Benefits,” Honeywell emphasized the effect of rising retiree medical costs on
its bottom line and concluded that “[c]ost controls” were “required . . . to remain competitive.”
(R. 60-4, UAW Master Labor Negotiations at PageID 3122.) Those controls were necessary in
part because Financial Accounting Standard (FAS) 106 “required publicly traded companies to
‘recognize [immediately] a liability for the present value of all of their future payments for
retiree health care expenditures [], rather than including these costs on the company’s balance
sheet on a pay-as-you-go basis.’” (Def.-Appellant Br. at 11–12 (quoting Wood v. Detroit Diesel
Corp., 607 F.3d 427, 428–29 (6th Cir. 2010)).) The company thus proposed setting a “limit” on
Honeywell’s contribution for all retirees going forward. (R. 58-8, UAW – Honeywell Master
Negotiations at PageID 2925.) With this limit in place, Honeywell could reduce its recognized
FAS liabilities to the minimum required payment.
The UAW negotiators objected to this limit, in part because they believed the pre-2003
CBAs had vested lifetime, full-premium benefits for pre-2003 retirees. This meant that
Honeywell had no right to reduce its contribution (at least with respect to those retirees). But
Honeywell insisted that none of the CBAs had vested lifetime benefits. Richard Atwood, the
UAW’s lead negotiator, recalled that “the parties could not agree whether [the full-premium
benefits were vested] or were not,” and believed that “the only other place to settle that
[disagreement] would be in court.” (R. 181-2, Atwood Dep. at PageID 9044.) Eric Warren, one
of Honeywell’s negotiators, testified that he told Atwood that the pre-2003 CBAs did not vest
full-premium benefits because the “UAW master contracts expired at the end of each contract
and we renegotiated benefits . . . in each bargaining session.” (R. 98-7, Warren Tr. at PageID
6063.)
Rather than reach a common understanding, however, the parties settled on language that
left open whether the pre-2003 CBAs had vested full-premium benefits. This new language
provided:
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 4
The Company’s contribution for health care coverage after 2007 for present and
future retirees, their dependents, and surviving spouses covered under the UAW
Honeywell Master Agreement shall not be less than (A) the actual amount of the
Company’s retiree health care contribution in 2007 or (B) the Company actuary’s
2003 estimate of the Company’s retiree health care contribution in 2007,
whichever is greater. As stated above, this limit will be a mandatory subject of
bargaining for 2007 UAW Honeywell Master Negotiations and for all future
UAW Honeywell Master Negotiations. Notwithstanding such negotiations, the
Company’s contributions shall not be less than the greater of: (A) the actual
amount of the Company’s retiree health care contribution in 2007 or (B) the
Company actuary’s 2003 estimate of the Company’s retiree health care
contribution in 2007.
The above limit on Company retiree healthcare contributions will not apply to any
year prior to calendar year 2008.
(R. 168-2, 2003 Agreement Regarding Insurance at PageID 7907.) According to Atwood, the
purpose of this language was to preserve some measure of vested benefits even if the UAW later
failed to convince Honeywell (or, if necessary, a court) that the pre-2003 CBAs had vested full-
premium benefits. But if the UAW did eventually secure those benefits, then the “shall not be
less than” language would not be “applicable to [pre-2003] retirees at all” because those retirees
would have vested full-premium benefits under the prior CBAs. (R. 181-2, Atwood Dep. at
PageID 9050–55.)
The parties included the same language when they renegotiated the CBA in 2007, though
they pushed back the implementation date to “calendar year 2012.” (R. 53-10, 2007 Mem. of
Settlement at PageID 2380.) When the parties met to renegotiate in 2011, the UAW restated its
position that the pre-2003 retirees were “entitled to 100% company paid health insurance”
because the pre-2003 CBAs had already vested full-premium benefits; but for those who retired
in 2003 or after, the union conceded that “[t]he company contribution amount [would] be limited
to the amounts described in the 2003 and 2007 agreements.” (R. 59-9, 2011 Master Union
Proposals at PageID 3048.) The parties again agreed to disagree on whether the pre-2003 CBAs
had vested full-premium benefits. And they later signed a “Memorandum of Terms of
Settlement” that incorporated, in relevant part, the language of the 2007 agreement. (Def.-
Appellant Br. at 18; see also R. 26, Answer to Compl. at PageID 911.)
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 5
What’s more, the 2003, 2007, and 2011 CBAs all contained general durational clauses
like the pre-2003 CBAs before them. The CBAs also attached an Insurance Agreement, which
governed the essential terms of the retirees’ healthcare benefits. And the Insurance Agreement
contained its own specific durational clause, which said that it would end on the same day and at
the same time as the general durational clause of each CBA.
In anticipation of the contribution limit’s effective date of January 2012, both parties filed
suit. Honeywell first sued in the District of New Jersey, seeking a declaratory judgment that the
contribution limit applied to all retirees, including those who retired before the 2003 CBA. The
UAW filed suit in the Eastern District of Michigan, arguing that the floor-level requirement
(1) did not apply to pre-2003 retirees and (2) established only a minimum payment obligation for
post-2003 retirees, without modifying Honeywell’s prior commitment to make full-premium
contributions to all retirees.
The New Jersey lawsuit was dismissed, and the parties’ claims were consolidated in the
Eastern District of Michigan. Both parties later filed motions for summary judgment, after
which the litigation stalled for several years. Although Honeywell at first abstained from
enforcing the contribution limit while litigation was pending, the company began imposing the
limit on post-2003 retirees in 2014 and on pre-2003 retirees in 2015. The 2011 CBA expired in
2016, after which the parties signed the 2017 CBA. This agreement, unlike the others, did not
provide for any healthcare benefits. But Honeywell did not immediately stop making floor-level
contributions.
The district court ruled on the parties’ summary judgment motions in March 2018. In
this order, the court determined that the pre-2003 CBAs did not vest lifetime, full-premium
benefits for the pre-2003 retirees. The court reasoned that each CBA had a general durational
clause and, “absent an express clause providing that retirees are entitled to vested lifetime health
care benefits, CBAs do not vest retirees with lifetime health care benefits when the general
durational clause is for the term of the agreement.” (R. 161, Order Regarding Various Mots. at
PageID 7810–11.) As for the contribution limit, the court held that the CBA’s “shall not be less
than” language did not end Honeywell’s obligation to make full-premium contributions. The
court reasoned that this language “simply memorialize[d] the parties’ commitment that the
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 6
‘actual 2007 amount/2003 estimate amount’ be ‘a mandatory subject[] of bargaining’ in all
future UAW Honeywell Master Negotiations.” (Id. at PageID 7799.) Because the parties had
not agreed on the actual or estimated 2007 amount in the CBAs themselves, the court decided
“that the ‘full premium’ provision [was] the only binding agreement between the parties with
respect to” the 2003, 2007, and 2011 CBAs. (Id.) The court thus ordered Honeywell to
reimburse retirees for any co-payments they made during the 2011 CBA in which the company
had enforced the contribution limit.
A week after the district court issued its summary-judgment order, Honeywell sent a
letter to its retirees stating that it had “no legal obligation to continue providing retiree medical
coverage” of any kind and announcing its “intent to terminate the retiree medical and
prescription drug coverage currently provided . . . effective July 31, 2018.” (R. 168-11, Apr.
2018 Letter at PageID 7963.) The UAW responded by filing a second motion for summary
judgment. The union maintained that even if the pre-2003 CBAs had not vested lifetime,
full-premium benefits, the 2003 CBA’s “shall not be less than” language had at least vested
lifetime, floor-level benefits. The district court denied the UAW’s motion, finding “no
indication, express or implied, that retirees were entitled to” vested floor-level benefits. (R. 186,
Order Den. Pls.’ Mot for Summ. J. at PageID 9139.) The court explained that the CBA’s “shall
not be less than” language addressed only “the parties’ intentions and aspirations, neither of
which are sufficient to convey upon [the retirees] the benefits they claim.” (Id.)
II.
The district court’s two summary judgment orders are the subject of this appeal.
Honeywell challenges the district court’s finding that the floor-level limit did not end its
obligation to make full-premium contributions during the life of the 2011 CBA—the CBA where
the limiting language introduced in 2003 finally went into effect. The UAW appeals the district
court’s decision that the pre-2003 CBAs did not vest lifetime, full-premium benefits for pre-2003
retirees and that the 2003, 2007, and 2011 CBAs did not vest lifetime, floor-level benefits for the
remaining retirees. Finally, the UAW argues that remand is necessary because the district court
improperly denied its claim that Honeywell took certain “windfall” financial advantages at the
expense of retirees.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 7
Summary judgment is appropriate when “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is
material when it “might affect the outcome of the suit under the governing law,” and a dispute is
genuine when “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” McKay v. Federspiel, 823 F.3d 862, 866 (6th Cir. 2016) (quoting Anderson v
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In cases “where, as here, the parties filed
cross-motions for summary judgment, ‘the court must evaluate each party’s motion on its own
merits, taking care in each instance to draw all reasonable inferences against the party whose
motion is under consideration.’” Id. (quoting Taft Broad. Co. v. United States, 929 F.2d 240,
248 (6th Cir. 1991)).
III.
A.
Ever since the Supreme Court overturned this Circuit by issuing M&G Polymers USA,
LLC v. Tackett, 135 S. Ct. 926 (2015), we have looked to the general durational clause to specify
the end date of each benefit provided for in a CBA.
We do so to obey Tackett’s command that we interpret CBAs under “ordinary principles
of contract law.” Id. at 930. This means not doing what we used to do under UAW v. Yard-Man,
Inc., 716 F.2d 1476 (6th Cir. 1983), and its progeny. Those cases “plac[ed] a thumb on the scale
in favor of vested retiree benefits in all collective-bargaining agreements.” Tackett, 135 S. Ct. at
935. Applying ordinary contract-law principles means applying general durational clauses, which
we had not done before Tackett. See id. at 936. By not applying those clauses, our Yard-Man
cases “distort[ed] the text of the agreement and conflict[ed] with the principle of contract law
that the written agreement is presumed to encompass the whole agreement of the parties.” Id.
Tackett unleashed “an earthquake in our caselaw[.]” Zino v. Whirlpool Corp., 763 F.
App’x 470, 471 (6th Cir. 2019). Since then, we have almost always concluded that a CBA with
a general durational clause unambiguously does not vest healthcare benefits for retirees beyond
the life of the agreement. See, e.g., id. at 472; IUE-CWA v. Gen. Elec. Co., 745 F. App’x 583,
593–96 (6th Cir. 2018); Fletcher v. Honeywell Int’l, Inc., 892 F.3d 217, 226–28 (6th Cir. 2018);
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 8
Cooper v. Honeywell Int’l, Inc., 884 F.3d 612, 623 (6th Cir. 2018); Watkins v. Honeywell Int’l
Inc., 875 F.3d 321, 326 (6th Cir. 2017); Serafino v. City of Hamtramck, 707 F. App’x 345, 354
(6th Cir. 2017); Cole v. Meritor, Inc., 855 F.3d 695, 701–02 (6th Cir. 2017); Gallo v. Moen Inc.,
813 F.3d 265, 269–74 (6th Cir. 2016).
There have been only two attempted departures from this pattern: Reese v. CNH Indus.
N.V., 854 F.3d 877 (6th Cir. 2017), overruled by CNH Indus. N.V. v. Reese, 138 S. Ct. 761
(2018), and UAW v. Kelsey-Hayes Co., 854 F.3d 862 (6th Cir. 2017), overruled by Kelsey-Hayes
Co. v. UAW, 138 S. Ct. 1166 (2018). In both cases we held that the CBAs were ambiguous,
causing us to consider extrinsic evidence despite the presence of a general durational clause. See
Reese, 854 F.3d at 879; Kelsey-Hayes, 854 F.3d at 869. And in both cases we held that the
extrinsic evidence supported the retirees’ claims. Reese, 854 F.3d at 879; Kelsey-Hayes,
854 F.3d at 871.
Neither decision remained good law for long. In a per curiam opinion, the Supreme
Court summarily reversed our decision in Reese. 138 S. Ct. at 761. And just six days later, the
Court summarily vacated our decision in Kelsey-Hayes and remanded “for further consideration
in light of” its decision in Reese. Kelsey-Hayes, 138 S. Ct. at 1167. We would later remark that
“[t]he Supreme Court’s reversal in Reese and remand in Kelsey-Hayes are powerful indications
that general durational clauses should dictate when benefits expire, unless an alternative end date
is provided.” Cooper, 884 F.3d at 618.
And we would eventually settle on “a clear rule—a CBA’s general durational clause
applies to healthcare benefits unless it contains clear, affirmative language indicating the
contrary.” Fletcher, 892 F.3d at 223. “Put differently, Fletcher outlines a threshold
requirement: either a CBA says clearly and affirmatively—that is, unambiguously—that its
general durational clause doesn’t control the termination of healthcare benefits, or the clause
controls.” Zino, 763 F. App’x at 472. That is not to say that a CBA requires “clear vesting
language in order to vest benefits.” Id. Vesting language, however, “differs from language
disconnecting specific benefits from a general durational clause, and Fletcher requires the latter,
not the former.” Id.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 9
Our post-Tackett caselaw offers clues about what disconnecting language looks like.
That language probably includes statements saying “clearly and affirmatively that the relevant
general durational clause doesn’t control the termination of healthcare benefits—whether by
reference to the general durational clause itself or by other language stating explicitly that
healthcare benefits continue past the relevant agreement’s expiration.” Id.; see also Fletcher,
892 F.3d at 224. It also likely includes language that explicitly provides an alternative end date
for health benefits. See Cooper, 884 F.3d at 617 (“[B]ecause the Gallo CBA did not specify an
alternative end date for healthcare benefits, the CBA’s general durational clause controlled.”).
In any event, we know that none of the language in any of the CBAs here satisfies the
Fletcher rule because that is what our precedents dictate. Without an unambiguous vesting
clause, the general durational clause here controls under Fletcher.
B.
We first consider whether the pre-2003 CBAs vested lifetime benefits for Honeywell’s
pre-2003 retirees. Although the UAW focused on this claim for many years in the litigation
below—most of which took place before the Supreme Court’s decisions in Tackett and Reese—it
devotes less attention to this argument on appeal. That is likely because the pre-2003 CBAs use
the same language that our court and the Supreme Court have recently found inadequate to
demonstrate an intent to vest lifetime benefits.
The pre-2003 CBAs stated that Honeywell would pay “the full premium or subscription
charge applicable to the coverages of [its] pensioner[s]” and their surviving spouses. (See
R. 101-2, 1965 CBA at PageID 6469.) But each CBA also contained a general durational clause
stating that the agreement’s terms would expire on a specified date and time. The UAW tries to
overcome these durational clauses by citing each CBA’s requirement that (1) Honeywell would
pay healthcare benefits as long as the retirees were “receiving a monthly pension,” (2) the
retirees’ surviving spouses would receive benefits, and (3) the retirees would receive Medicare
Part B reimbursement. (Pls.-Appellees Br. at 32.)
These are all terms that we have found insufficient to disconnect retiree benefits from a
CBA’s durational clause. See, e.g., Fletcher, 892 F.3d at 225–28 (finding that the CBA that tied
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 10
eligibility to pensioner status and provided benefits to surviving spouses could not overcome
durational clause); Cole, 855 F.3d at 701; Gallo, 813 F.3d at 274 (reaching the same conclusion
where the CBA also provided Medicare Part B coverage); Gen. Elec., 745 F. App’x at 598. And
the UAW offers no basis for distinguishing those cases from this one. We therefore affirm the
district court’s decision that the pre-2003 CBAs did not vest lifetime, full-premium benefits.
C.
We next consider whether the 2003 to 2011 CBAs vested lifetime, floor-level benefits.
As noted above, those CBAs provided:
The Company’s contribution for health care coverage after 2007 for present and
future retirees, their dependents, and surviving spouses covered under the UAW
Honeywell Master Agreement shall not be less than (A) the actual amount of the
Company’s retiree health care contribution in 2007 or (B) the Company actuary’s
2003 estimate of the Company’s retiree health care contribution in 2007,
whichever is greater. As stated above, this limit will be a mandatory subject of
bargaining for 2007 UAW Honeywell Master Negotiations and for all future
UAW Honeywell Master Negotiations. Notwithstanding such negotiations, the
Company’s contributions shall not be less than the greater of: (A) the actual
amount of the Company’s retiree health care contribution in 2007 or (B) the
Company actuary’s 2003 estimate of the Company’s retiree health care
contribution in 2007.
(R. 97-18, 2003 Agreement Regarding Insurance at PageID 5655).
Plaintiffs argue that this language vested them with floor-level benefits. And they make
special note of the language stating that, “[n]otwithstanding [future] negotiations, [Honeywell’s]
contributions shall not be less than [a certain amount.]” (See Pls.-Appellees Br. at 19–30; see
also Pls.-Appellees Reply Br. at 3.)
Plaintiffs’ arguments fail because this language does not unambiguously disconnect
Honeywell’s contribution requirement from the CBA’s general durational clause. Simply put,
this language does not say, clearly and affirmatively, that the CBA’s general durational clause
does not control. See Fletcher, 892 F.3d at 223. It neither says that “by reference to the
. . . clause itself,” nor does it say “explicitly that healthcare benefits continue past the relevant
agreement’s expiration.” Zino, 763 F. App’x at 472 (emphasis added). Thus, under Fletcher, the
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 11
general durational clause controls the termination of retiree healthcare benefits in the 2003 to
2011 CBAs.
That is doubly true here because the Insurance Agreement, which governs the specific
terms of retirees’ healthcare benefits, has its own specific durational clause. That clause
terminated the Insurance Agreement at the same time that the general durational clause
terminated the overall CBA. We have noted that a specific durational clause of this kind renders
a contract unambiguous against vesting. See Watkins, 875 F.3d at 323–25. And we
acknowledged as much even in Reese, 854 F.3d at 883 (“[I]f the CBA clearly stated that the
general-durational clause was intended to govern healthcare benefits, the CBA would most likely
be unambiguous.”).
That said, we have repeatedly suggested that a specific durational clause containing a
later end date than the end date within the general durational clause disconnects the benefits
from the latter clause. Gen. Elec., 745 F. App’x at 595 (“[A]bsent some strong indication within
the four corners of the agreement itself—perhaps, a specific-durational clause that applied to
certain provisions but not others—the contractual rights and obligations under a CBA terminate
along with the CBA.” (quoting Serafino, 707 F. App’x at 352)); see also Gallo, 813 F.3d at 265
(“Absent a longer time limit in the context of a specific provision, the general durational clause
supplies a final phrase to every term in the CBA: ‘until this agreement ends.’”). But the specific
durational clause here does precisely the opposite: It explicitly ties the health benefits to the end
date in the general durational clause.
As a result, the specific durational clause makes it twice as clear that the 2003 to 2011
CBAs did not vest lifetime, floor-level benefits. And the supremacy clause in each Insurance
Agreement makes it triply clear. That clause states: “In the event of any conflict between the
provisions of the [Insurance] Plan and the provisions of this Agreement, the provisions of this
Agreement will supersede the provisions of the [Insurance] Plan to the extent necessary to
eliminate such conflict.” (R. 97-18, 2003 Agreement Regarding Insurance at PageID 5593.)
Each supremacy clause made the above-excerpted limiting language in the Insurance Plan
subordinate to the Insurance Agreement. So even if the floor-level limits suggest that benefits
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 12
continue past the CBA’s termination, the supremacy clause in each CBA slams the door shut on
that interpretation.
What, then, are we to make of the fact that the limiting language in the 2003 to 2011
CBAs contemplated that benefits would continue after the CBAs expired? Similarly, what are
we to make of the fact that, as least for the 2003 and 2007 CBAs, the limits weren’t even
supposed to take effect until after the contracts expired?
The answer, according to our caselaw, is not much. As we discuss below, the purpose of
this provision was to limit or cap Honeywell’s contribution going forward. In doing so, the
language evidenced the parties’ expectation or hope that the benefits would continue. See Gallo,
813 F.3d at 269 (remarking that, for employers, “hope springs eternal” over amenable business
conditions and stable healthcare costs); see also Cole, 855 F.3d at 701. But the language did not
guarantee that the benefits would continue past the CBA’s expiration date. To hold otherwise
would be to conflate “Honeywell’s exposure in the event healthcare benefits continue to be
provided” with “the scope of retirees’ rights.” Cooper, 884 F.3d at 623.
Time and time again, we have “rejected . . . reliance on contribution cap clauses to
indicate vesting.” Gen. Elec., 745 F. App’x at 597. In Cole, we said that the caps meant the
parties “contemplated that retiree healthcare benefits would continue.” 855 F.3d at 701. But we
also noted that “the continuation of retiree healthcare would have been consistent with every
CBA renewal since 1968.” Id. It made sense then that “[b]oth parties . . . anticipated that these
caps would come into play based on this history of renewal.” Id. “But the fact that they
anticipated, or even hoped, that these benefits would continue [did] not mean that [the company
was] bound to provide these benefits for the life of the retirees.” Id.
The same was true in Watkins, where we acknowledged that Honeywell had “a good
reason . . . to adopt healthcare caps, even if caps take effect only far in the future[.]” 875 F.3d at
327. That is “because companies must recognize as a liability on their balance sheet the present
value of their anticipated future healthcare costs[.]” Id. And “caps keep companies from
needing to recognize millions (or more) in future potential liability.” Id. (citing Wood, 607 F.3d
at 428–29).
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 13
We made the same point in Cooper (where Honeywell was the defendant). See 884 F.3d
at 623. We explained that “the future-effect nature of the caps is an unsurprising product of
collective bargaining.” Id. “That the caps” take effect in the future “might well mean that
Honeywell could only secure a contribution cap by offering to delay its implementation.” Id.
“To nevertheless infer an intent to vest from the cap’s future effect,” we said, “is possible only
by invoking Yard-Man’s illicit inferences[.]” Id.
Although the caps here function as a floor as well, that is immaterial to the analysis.
The point is that caps and floors deal with how much the company owes “in the event healthcare
benefits continue to be provided[.]” Id. They do not speak to whether those benefits vested.
See id.; Zino, 763 F. App’x at 472. No matter if the parties agree to caps or floors, the inquiry
remains whether the CBA shows an “unambiguous[]” intent for benefits to vest. Cooper,
884 F.3d at 619. That’s because an analysis that reads vesting into the CBA wrongly places a
“thumb on the scale in favor of vested retiree benefits[.]” Tackett, 135 S. Ct. at 935. In short, an
agreement on the minimum, and not the maximum, a company could pay beneficiaries should
benefits vest does not grant retirees an automatically vesting benefit. Concluding otherwise
ignores the lessons of Yard-Man and Tackett.
Most, if not all, of the reasons we recognize for not inferring an intent to vest based on
future caps apply to this case. “For decades, Honeywell and the UAW repeatedly signed CBAs
that required Honeywell to pay . . . for retiree healthcare benefits during the term of each
successive contract.” (Def.-Appellant Br. at 2.) So “[b]oth parties understandably anticipated
that these caps would come into play based on this history of renewal.” Cole, 855 F.3d at 701.
And, as in Watkins and Cooper, the impetus for imposing these caps was accounting-related.
The caps would help Honeywell manage the effect of Financial Accounting Standard 106. That
standard requires companies to “recognize [immediately] a liability for the present value of all of
their future payments for retiree health care expenditures [], rather than including these costs on
the company’s balance sheet on a pay-as-you-go basis.” (Id. at 11–12 (quoting Wood, 607 F.3d
at 428–29).) The record also strongly suggests that “Honeywell could only secure a contribution
cap by offering to delay its implementation.” Cooper, 884 F.3d at 623. (See R. 58-7, 2003
Mem. Terms of Settlement at PageID 2906.)
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 14
In sum, the cap language addressed in our precedents is “legally indistinguishable” from
the limiting language we confront in “the present case.” Kelsey-Hayes, 854 F.3d at 874 (Gilman,
J., dissenting). So we can conclude that such provisions “do not overcome the clear statement”
against vesting supplied by the general durational clauses in the CBAs here. Watkins, 875 F.3d
at 327. And that is even more true when, as here, specific durational clauses and supremacy
clauses fortify those general durational clauses. Thus, “even if we found in the caps
[here, limits] some oblique evidence of an intent to vest benefits, that would not be enough to
overcome the overwhelming indications to the contrary.” Cooper, 884 F.3d at 623.
We therefore affirm the district court’s judgment that the limiting language in the 2003 to
2011 CBAs did not vest retirees with lifetime, floor-level benefits.
D.
We next address the trial court’s more limited determination that Honeywell had to pay
the full cost of retiree healthcare under the 2011 CBA during its term. This issue centers on the
Agreement’s “shall not be less than” language and whether the floor-level requirement’s
effective date of January 2012 ended Honeywell’s obligation to make full-premium
contributions. Of course, the CBA’s stipulation that Honeywell’s contribution “shall not be less
than” this level alone did not set a maximum contribution amount. To hold otherwise would
require us to conclude that “less” means “more.” But Honeywell does not ask us to make this
illogical leap. The company instead claims that language in the CBAs makes clear that the floor-
level requirement also set a “cap” on its payment obligation.
The district court decided that the floor-level requirement “simply memorialize[d] the
parties’ commitment that the ‘actual 2007 amount/2003 estimate amount’ be ‘a mandatory
subject[] of bargaining’ in all future UAW Honeywell Master Negotiations.” (R. 161, Order
Regarding Various Mots. at PageID 7799.) Because the parties did not identify the actual or
estimated 2007 amount in the 2003, 2007, or 2011 CBAs, the court held “that the ‘full premium’
provision [was] the only binding agreement between the parties with respect to” those
agreements. (Id.)
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 15
Recall that Honeywell did not begin enforcing this floor-level limit until 2014. The
parties delayed the requirement’s effective date until January 2012—after the 2003 and 2007
CBAs had expired—so Honeywell continued to make full-premium contributions during those
CBAs’ terms. (See, e.g., R. 168-2, 2003 Agreement Regarding Insurance at PageID 7907.)
Because Honeywell made full-premium contributions during the 2003 and 2007 CBAs, the only
relevant question is whether the 2011 CBA ended Honeywell’s obligation to make full-premium
contributions. And by the time the parties agreed to that CBA, it would have been impossible to
“negotiate” Honeywell’s actual 2007 contribution, which had been made, or the 2003 actuary’s
estimate, which had been calculated. At least neither party disputes as much. We therefore
disagree with the district court’s conclusion that the floor-level requirement only
“memorialize[d] the parties’ commitment” to negotiate the floor-level amount. (R. 161, Order
Regarding Various Mots. at PageID 7799.)
Given that these limits had a discernable meaning, the question becomes: Did they
(as common sense would dictate) alter Honeywell’s obligations to make healthcare contributions
when they began to go into effect during the 2011 CBA? Or, despite their limiting language, did
they require Honeywell to keep making full-premium contributions as it had been obligated to do
under the pre-2003 CBAs? Here, as often happens, the text tells us what we need to know.
The plain language of each CBA shows that the provision aimed to limit Honeywell’s
contribution going forward. The agreement itself calls the floor-level requirement a “limit” three
times: first by referring to the “limit described below on Company retiree health care
contributions,” then by adding that “this limit will be a mandatory subject of bargaining[,]” and
then by stipulating that “[t]he above limit . . . will not apply to any year prior to” a specified date.
(See R. 53-10, 2007 Mem. Settlement at PageID 2380.) The district court dismissed these terms
because “the common meaning of ‘limit’ is ‘a restriction on the size or amount of something
permissible or possible,’” which “does not necessarily suggest a maximum any more than a
minimum.” (R. 161, Order Regarding Various Mots. at PageID 7800 (quoting Limit, MERRIAM-
WEBSTER ONLINE DICTIONARY, https://www.merriam-webster.com/dictionary/limit (last visited
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 16
March 26, 2018)).)1 But another common definition of “limit” is “the utmost extent.” Id. And
in the context of this agreement, that definition makes more sense. If, as the district court found,
the 2011 CBA unambiguously required Honeywell to make full-premium contributions up to the
agreement’s 2016 expiration date, then the floor-level requirement—which stated that
Honeywell’s payment “shall not be less than” a specified amount starting in 2012—would be a
pointless obligation. No matter what this minimum “limit” imposed, Honeywell would still have
to make full-premium contributions throughout the CBA’s term. Construing this “limit” as a
“minimum” obligation would therefore render the floor-level requirement meaningless. See
Gallo, 813 F.3d at 270 (noting that a CBA “should be read to give effect to all its provisions and
to render them consistent with each other”).
We hold, therefore, that this language unambiguously limited Honeywell’s obligation to
pay only the floor-level contributions during the life of the 2011 CBA. And we reverse the
district court’s contrary judgment.
E.
Finally, the UAW argues that remand is necessary to address alleged “windfall” financial
advantages taken by Honeywell at the expense of retirees. The union first argues that the
Medicare subsidies paid annually to Honeywell in exchange for providing retiree prescription
drug coverage should have been passed on directly to retirees in the form of reduced co-
premiums. (See Pls.-Appellees Reply Br. at 14.) But the union cites no authority for the claim
that Honeywell needed to do so. The relevant statute provides for “payment to the sponsor of a
qualified retiree prescription drug plan[,]” 42 U.S.C.A. § 1395w-132(a)(1), and the
corresponding regulation says only that “the sponsor” of such a plan will “receive[] a subsidy
payment in the amount of 28 percent of the allowable retiree costs[.]” 42 C.F.R. § 423.886(a)(1).
Neither provision states that the sponsor must pass those subsidies on by reducing co-premiums.
Nor do any of the CBAs mention these Medicare subsidies or require that Honeywell apply
1The dictionary cited by the district court appears to have been updated in the last year—it now defines
“limit” as, among other things, “something that bounds, restrains, or confines.” Limit, MERRIAM-WEBSTER ONLINE
DICTIONARY, https://www merriam-webster.com/dictionary/limit (last visited March 27, 2020).
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 17
government subsidies directly to retirees’ co-premiums. Without a basis for obligating
Honeywell to give these funds to retirees, the UAW’s argument fails.
The UAW next claims that Honeywell “unilaterally cancelled floor-level healthcare for
retirees” who could not afford the insurance plan’s co-premiums, which “created a massive
‘windfall’ for Honeywell” because it no longer had to make the floor-level payment to those
retirees. (Pls.-Appellees Br. at 42; Pls.-Appellees Reply Br. at 14–16.) In the first place, it is not
clear that Honeywell “unilaterally cancelled” any retirees’ insurance, and the UAW cites no
evidence to support this claim. Of course, if the retirees could not afford the plan’s co-premiums
after Honeywell began making floor-level payments in 2014, they could not enroll in the plan.
The union’s argument appears to be that, by imposing a co-payment obligation that some retirees
could not afford—and thus forcing those retirees to enroll in a different insurance plan—
Honeywell effectively cancelled their insurance. But the only alternative to imposing that
co-payment obligation, at least for the company-sponsored plan, would have been to contribute
above the floor-level limit. And for the reasons already explained, the 2011 CBA ended
Honeywell’s commitment to make payments above that limit.
The UAW points out that Honeywell also could have met its floor-level obligation
through alternative arrangements that did not require retirees to enroll in the company-sponsored
plan. The union suggests, for example, that Honeywell could have entered into “Health
Reimbursement Arrangements” where the company paid retirees a lump sum that they could use
to pay for private insurance. (Pls.-Appellees Reply Br. at 15–16 (quoting 26 U.S.C. § 213(d)).)
Even if true, the UAW once again cites no legal authority for the claim that Honeywell needed to
create this arrangement. The CBAs do not obligate Honeywell to make floor-level payments
directly to all retirees, no matter if they choose to enroll in a company-sponsored plan. Each
CBA makes clear that these contributions apply only to retirees who choose coverage under the
company-sponsored plan in place at the time or one negotiated by the parties in the future.
Without a basis for requiring Honeywell to make contributions to retirees enrolled in other plans,
this argument also fails.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 18
IV.
For these reasons, we AFFIRM the district court’s decision that (1) the pre-2003 CBAs
did not vest lifetime, full-premium benefits, and (2) the 2003, 2007, and 2011 CBAs did not vest
lifetime, floor-level benefits. We also AFFIRM its dismissal of the UAW’s claim that
Honeywell received windfall financial advantages. And we REVERSE its decision that the 2011
CBA did not end Honeywell’s obligation to make full-premium contributions during the terms of
that CBA. Finally, we REMAND this case to the district court for any further proceedings that
might be needed to effectuate our opinion.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 19
______________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
______________________________________________________
JANE B. STRANCH, Circuit Judge, concurring in part and dissenting in part. I concur with
most of the majority’s opinion, but I respectfully dissent from its conclusion that Honeywell
never guaranteed lifetime, floor-level benefits to retirees covered under the 2003, 2007, and 2011
CBAs. Of course, relieving Honeywell of the commitment it made to these retirees—many of
whom dedicated their working lives to the company—is unfair. But that unfairness has now
become a part of our governing law. I do not fully join today’s decision, however, because
I believe its floor-level benefits determination violates the Supreme Court’s express
instruction that we apply “ordinary principles of contract law” to the interpretation of CBAs.
M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 930 (2015).
A. Yard-Man, Tackett, and Reese
Some background is helpful. For years we applied a series of inferences, first adopted in
UAW v. Yard-Man, Inc., to decide whether a CBA had vested lifetime healthcare benefits. See
716 F.2d 1476, 1479–83 (6th Cir. 1983). In Tackett, the Supreme Court found that “those
inferences conflict with ordinary principles of contract law.” 135 S. Ct. at 933. The Court thus
dismantled Yard-Man and reminded this circuit to use “ordinary contract principles” to
“ascertain the intentions of the parties.” Id. at 935 (quoting 11 R. Lord, Williston on Contracts
§ 30:2, p. 18 (4th ed. 2012)). For a few years, we assumed that Yard-Man’s inferences were still
relevant to whether a CBA was ambiguous, even if they were not relevant to the ultimate
question of whether the benefits had vested. See Reese v. CNH Indus. N.V., 854 F.3d 877, 882
(6th Cir. 2017). But the Supreme Court disagreed once more—this time, it clarified that Tackett
barred the use of those inferences for any purpose because they were “inconsistent with ordinary
principles of contract law.” CNH Industrial v. Reese, 138 S. Ct. 761, 763 (2018) (quoting
Tackett, 135 S. Ct. at 937). The Court then issued a renewed instruction to “comply with
Tackett’s direction to apply ordinary contract principles” to the interpretation of CBAs. Reese,
138 S. Ct. at 765.
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 20
In our eagerness to run far away from the Yard-Man inferences that twice rankled the
Supreme Court, we have forgotten what Tackett and Reese actually said. The Court did not
instruct our circuit to canvass CBAs in search of reasons to deny healthcare benefits to retirees,
however divorced those reasons might be from ordinary principles of contract law. The Court’s
direction was much narrower: in interpreting CBAs, we must apply the very same principles of
contract law that we use in the typical case, “at least when those principles are not inconsistent
with federal labor policy.” Tackett, 135 S. Ct. at 933; see also Reese, 138 S. Ct. at 764.
That, and only that, is what Tackett and Reese instructed. The “earthquake in our
caselaw,” Zino v. Whirlpool Corp., 763 F. App’x 470, 471 (6th Cir. 2019), did not leave a crater
in its wake. The foundations of contract law remain. And we cannot secure those foundations
unless we “comply with Tackett’s direction to apply ordinary contract principles” to the
interpretation of CBAs. Reese, 138 S. Ct. at 765.
Our recent caselaw has struggled with this lesson and, in my estimation, it has stretched
ordinary principles of contract law beyond the breaking point. Take Fletcher v. Honeywell
International, Inc., 892 F.3d 217 (6th Cir. 2018). There we declared that “a CBA’s general
durational clause applies to healthcare benefits unless it contains clear, affirmative language
indicating the contrary.” Id. at 223. Where do Tackett and Reese direct us to presume that
benefits are not vested absent a “clear, affirmative” statement of vesting? Nowhere. In fact,
Reese says just the opposite: in keeping with ordinary contract principles, the Court tells us to
consider all “explicit terms, implied terms, or industry practice” to determine a CBA’s meaning;
and if those terms are “reasonably susceptible to at least two reasonable but conflicting
meanings,” then we must “consult extrinsic evidence” before reaching a conclusion. 138 S. Ct.
at 765.
Mindful of this mismatch between Fletcher and Reese, we have tried to rescue Fletcher
by interpreting it narrowly. In Zino, for example, we held that Fletcher’s clear-statement rule
applies only to the application of a CBA’s general durational clause. See 763 F. App’x at 472.
But “[i]f a CBA does unambiguously disconnect certain benefits from the agreement’s general
durational clause, the agreement might well vest those benefits—even absent clear vesting
language.” Id. That qualification perhaps brings us within earshot of ordinary principles of
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 21
contract law. I assume in this dissent that we are bound by Fletcher’s clear-statement rule,
subject to Zino’s clarification. But even accepting that Fletcher is somehow consistent with
Reese, this court must still apply ordinary contract principles to decide whether the parties
included “clear, affirmative language” disconnecting Honeywell’s guaranteed contribution from
the CBA’s durational clause. Reese, 138 S. Ct. at 765; Fletcher, 892 F.3d at 223. I turn to that
task.
B. The Plain Language of the CBA
The 2003 CBA was the first to include Honeywell’s floor-level payment obligation. That
agreement made the following commitment:
The Company’s contribution for health care coverage after 2007 for present and
future retirees, their dependents, and surviving spouses covered under the UAW
Honeywell Master Agreement shall not be less than (A) the actual amount of the
Company’s retiree health care contribution in 2007 or (B) the Company actuary’s
2003 estimate of the Company’s retiree health care contribution in 2007,
whichever is greater. As stated above, this limit will be a mandatory subject of
bargaining for 2007 UAW Honeywell Master Negotiations and for all future
UAW Honeywell Master Negotiations. Notwithstanding such negotiations, the
Company’s contributions shall not be less than the greater of: (A) the actual
amount of the Company’s retiree health care contribution in 2007 or (B) the
Company actuary’s 2003 estimate of the Company’s retiree health care
contribution in 2007.
The above limit on Company retiree healthcare contributions will not apply to any
year prior to calendar year 2008.
(emphases added). Ordinary principles of interpretation teach that the term “shall” creates a
command, not a mere suggestion or aspiration. See, e.g., Lexecon Inc. v. Milberg Weiss Bershad
Hynes & Lerach, 523 U.S. 26, 35 (1998) (“[T]he mandatory ‘shall’ . . . normally creates an
obligation impervious to judicial discretion.”); United States v. Ostrander, 411 F.3d 684, 688
(6th Cir. 2005) (“[The] assertion that ‘shall’ does not create a mandatory command simply flies
in the face of standard interpretation.”).
This contract language is different from language in our prior cases in several important
respects. First, the parties agreed that this command would remain in effect “notwithstanding”
“all future negotiations.” In Gallo, we determined the CBA’s suggestion that payments “shall
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 22
continue” did not vest lifetime benefits because the agreement stated only “that healthcare
benefits ‘shall continue . . . as indicated under the [specific CBA at issue],’” and thus the
benefits incorporated that CBA’s durational clause. Gallo v. Moen, Inc., 813 F.3d 265, 273 (6th
Cir. 2016). That incorporating language is not found in this CBA. The plain language here
supports only one reasonable interpretation: the parties agreed that Honeywell’s floor-level
payment could “not be less than” its actual or estimated 2007 contribution going forward,
regardless of whether the company tried to back away from that commitment in any “future
negotiations.”
Just as notable is the fact that the floor-level obligation did not even take effect until
January 1, 2008—almost eight months after the general durational clause’s expiration date of
May 3, 2007. To make the general durational clause apply to these contributions, the majority
must conclude that Honeywell’s negotiated commitment, notwithstanding any future
negotiations, expired before it even began. That does not sound like an ordinary principle of
contract law. See Gallo, 813 F.3d at 270 (explaining that a contract’s terms must be read “to
render them consistent with each other”) (citing Mastrobuono v. Shearson Lehman Hutton, Inc.,
514 U.S. 52, 63 (1995)). The majority relies on a series of cases involving “caps” placed on an
employer’s hypothetical future contributions. In Cole v. Meritor, Inc., for example, we found
that a CBA’s “hypothetical example[s]” of maximum coverage—which “show[ed] how [these]
caps would apply to a worker retiring” on some future date—demonstrated only that the parties
“anticipated, or even hoped, that these benefits would continue.” 855 F.3d 695, 701 (6th Cir.
2017); see also Watkins v. Honeywell Int’l Inc., 875 F.3d 321, 327 (6th Cir. 2017) (“[T]hat the
caps contemplated healthcare benefits into the future did not mean that Honeywell had promised
to provide benefits forever.”); Cooper v. Honeywell Int’l, Inc., 884 F.3d 612, 623 (6th Cir. 2018)
(finding “the future-effect nature of the caps [was] an unsurprising product of collective
bargaining” but it was “unclear that the parties intended the cap to apply beyond the [then]-
negotiated CBA”).
Reliance on these cases misses the point. In each case, the “cap” at issue required only
that the company’s payment could not be more than a specified amount going forward. That was
a one-sided limitation that benefited only the company—it could still meet its obligation by
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 23
making any contribution ranging from zero dollars to the maximum benefit. We have thus held
that these “[c]ontribution caps function[ed] only as limiting provisions protecting Honeywell’s
exposure in the event healthcare benefits continue[d] to be provided,” but “they d[id] not speak
to the scope of retirees’ rights.” Id.
The language enacting the benefit promised here does speak to the retirees’ rights and it
is not “immaterial” that the negotiated language sets a benefit floor. Such commitment is
precisely the opposite of that addressed in Cole, Watkins, and Cooper—rather than stipulate that
Honeywell’s payment and accounting obligations could not be more than a specified amount, the
2003 CBA requires that Honeywell’s ongoing contribution “shall not be less than” a hard-dollar
amount. This agreed-upon commitment begins not with Honeywell’s right to make a
contribution from zero up to a capped amount, but with the requirement that Honeywell make the
actual or estimated 2007 payment. Nor is it “unclear . . . [whether] the parties intended the cap
to apply beyond the [2003]-negotiated CBA,” id.—the agreement states unequivocally that the
floor-level payment must continue “notwithstanding” “all future” negotiations. As Honeywell
itself admitted in its briefing, this language created a reciprocal benefit for Honeywell and its
retirees by “serv[ing] as both a maximum and a minimum on benefits: Honeywell could not pay
less than its 2007 costs, but it also was not obligated to pay more than that.” The majority
ignores the parties’ negotiated choice of the term “less,” not the term “more” of Cole, Watkins,
and Cooper. But a “cardinal principle of contract construction [is] that a document should be
read to give effect to all its provisions.” Mastrobuono, 514 U.S. at 63. By giving the term “less”
its opposite meaning, today’s decision violates that clear principle. See DIRECTV, Inc. v.
Imburgia, 136 S. Ct. 463, 469 (2015) (noting that “[a]bsent any indication” to the contrary, a
contract term “presumably takes its ordinary meaning”).
Straying from the plain language of the agreement, the majority also speculates that
Honeywell agreed to the floor-level commitment purely for its own benefit, to limit its
accounting liabilities in the future. Notably absent from this speculation, however, is the fact
that Honeywell did not propose this language at all. It was Richard Atwood, UAW’s negotiator,
who inserted the “shall not be less than” condition. In his deposition, Atwood explained that
UAW objected to the placement of any limit on Honeywell’s future payment obligation; but to
Nos. 18-1471/1975/1976 UAW, et al. v. Honeywell Int’l, Inc. Page 24
ensure that retirees still received some vested benefit in exchange for this limit, he inserted the
floor-level requirement as “a minimal limit that was to be guaranteed [and] that was to be vested
for” covered retirees. Even if we were to consider extrinsic evidence—which we need not do
because the language is clear—the record leaves no doubt that the purpose of this condition was
to vest the floor-level contribution.
Yard-Man was reversed as “incompatible with ordinary principles of contract law.”
Tackett, 135 S. Ct. at 930. The majority’s decision on floor-level benefits suffers from the same
malady. I therefore respectfully dissent as to that holding.