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Tuesday, Jan 27 2015

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High Court Ruling Chips Away At Health Benefits Promised To Union Retirees

In what's being viewed as a victory for corporate America, the Supreme Court unanimously ruled Monday that "ambiguous" provisions of union contracts shouldn't necessarily be interpreted in workers' favor.

The Supreme Court on Monday ruled that a chemical company may be able to cut the health benefits of its retired workers, unanimously reversing an appeals court ruling that said the benefits had vested for life. 鈥淐ourts should not construe ambiguous writings to create lifetime promises,鈥 Justice Clarence Thomas wrote for the court, adding that 鈥渞etiree health care benefits are not a form of deferred compensation.鈥 (Liptak, 1/26)

The Supreme Court on Monday ruled ambiguous provisions in union contracts shouldn鈥檛 automatically be interpreted in favor of workers, giving a chemical manufacturer another chance to terminate lifetime health-care benefits for retirees. ... The retirees and their dependents filed suit, and the Sixth U.S. Circuit Court of Appeals in Cincinnati found the company had reneged on the contract, saying it was 鈥渦nlikely that [the union] would agree鈥 to such a deal 鈥渋f the company could unilaterally change the level of contribution.鈥 (Bravin, 1/26)

The Supreme Court cast doubt Monday on the future of old union contracts that had promised lifetime health benefits for retired workers and their families. In a case seen as a victory for corporate America, the justices ruled these promises should not be treated as 鈥渧ested rights鈥 unless they are spelled out in the contract. (Savage, 1/26)

The Supreme Court ruled unanimously Monday that companies can terminate retiree health benefits when labor agreements are renewed if the original contract language was ambiguous. (Wolf, 1/26)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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