M&G Polymers USA v. Tackett

M & G Polymers, USA (M&G) (defendant) entered into a master collective-bargaining agreement (CBA) and a Pension, Insurance, and Service Award Agreement (P&I) with union workers employed at one of the M&G plants. The contract language in the CBA and P&I stated that union workers “will receive full Company contribution towards the cost of” healthcare benefits upon retirement. When the CBA and P&I were renewed, M&G amended the contracts to require retirees to contribute to their healthcare benefits upon retirement. Hobert Tackett and other retirees from M&G (plaintiffs), along with their surviving spouses and dependents (plaintiffs), filed suit against M&G in federal district court for breach of contract and violations of the Labor Management Relations Act and the Employee Retirement Income Security Act of 1974. The plaintiffs claimed that M&G had promised to provide lifetime, contribution-free healthcare benefits. The district court dismissed the suit for failure to state a claim. The plaintiffs appealed. The court of appeals reversed, relying on UAW v. Yard-Man, 716 F.2d 1476 (6th Cir. 1983), and held that the phrase “will receive” in the CBA and P&I indicated an intent by M&G to vest the plaintiffs with lifetime benefits. On remand, the district court held in favor of the plaintiffs and issued a permanent injunction ordering M&G to reinstate contribution-free healthcare benefits for the plaintiffs. M&G appealed. The court of appeals affirmed. The United States Supreme Court granted certiorari to review.