Honeywell cannot cut off the lifetime health care benefits it promised to employees of a Connecticut plant, the Second Circuit unanimously ruled Aug. 7, upholding a lower court’s ruling that the corporation’s duty to provide benefits does not expire with a union contract.
Lawyers for the multinational conglomerate argued that its collective bargaining agreement (CBA) with the workers providing lifetime health care to them and their spouses ended with a contract it entered with the United Automobile, Aerospace and Agricultural Implement Workers of America Local 1010 and Local 376.
According to Law360, the appellate court permanently bars Honeywell Inc. from terminating benefits to workers who retired before the CBA expired on June 6, 1997. The court also temporarily barred Honeywell from cutting off the benefits of workers who retired after, sending that part of the case back to a Connecticut federal court for further proceedings.
“The Second Circuit held that Honeywell’s CBA clearly guaranteed health benefits for life, and Honeywell can’t dodge its responsibility by claiming it thought the benefits cut off when the contract ended,” Law360 reported.
A lawyer for the retired Honeywell workers and their spouses credited the union for ensuring that lifetime benefits meant just that regardless of the spin Honeywell tries to put on it.
“The UAW’s negotiators had the foresight to include language making it crystal-clear that the benefits were intended to be lifetime,” the plaintiffs’ lawyer told Law360.
The contract stated, “All past and future retired employees and surviving spouses shall continue to receive … full medical coverage as provided in the … group insurance agreement, as now in effect or as hereafter modified by the parties for the life of the retiree or surviving spouse.”
The retired workers filed the lawsuit in 2016 after Honeywell sent them a letter notifying them that it was eliminating their lifetime medical benefits by the end of that year.
It’s not uncommon for companies to try to snake out of paying the benefits it promised to workers before they retired.
Beasley Allen lawyers are currently representing retirees in a class action lawsuit against E.I. du Pont de Nemours and Company after a series of corporate restructuring and other maneuvers set workers’ retirement benefits up for failure.
In 2015, DuPont, by then a 217-year-old company, merged with Dow Chemical to create DowDuPont. In 2019, the new corporate entity split into three new companies Corteva, DuPont, and Dow.
Corteva is a combination of DuPont and Dow agriculture businesses. Through this scheme, DuPont and Dow shifted all liability for the DuPont U.S. pension, valued at $19 billion, to the newly created Corteva. DuPont had been covering its U.S. employees’ benefits since 1904.
By shifting the U.S. pension liabilities to Corteva along with the manufacture of chemicals already subject to large-scale litigation, among other maneuvers, Corteva could file for bankruptcy and discharge its responsibility to pay the promised pensions, leaving retirees pennies to the dollar, and neither DuPont nor Dow would be fazed.
For more information on the DuPont litigation, contact Dee Miles, head of the firm’s Consumer Fraud section.