M&G Polymers USA, LLC v. Tackett

In M&G Polymers USA, LLC v. Tackett (2015) 574 U.S. ,190 L.Ed.2d 809, an employer entered collective bargaining agreements, promising union employees who reached a certain age and years of service "will receive" a 100 percent company contribution for health care benefits at retirement. After the agreements expired, the employer announced that retirees had to begin contributing toward the cost of their health insurance. The retirees sued, alleging that they had a vested right to 100 percent health care benefits that continued beyond the expiration date of the collective bargaining agreements. (Tackett, supra, 190 L.Ed.2d. at pp. 814-815.) Applying principles of traditional contract law, the Supreme Court stated that courts cannot "refuse to apply general duration clauses to provisions governing retiree benefits" because it conflicts with the principle that a written agreement is presumed to encompass the parties' whole agreement. (Tackett, supra, 190 L.Ed.2d at p. 819.) The court rejected the notion that a retiree medical benefits promise would be "illusory" if the benefits terminated when the bargaining agreement expired. An employer's agreement to vest benefits in perpetuity cannot be presumed: there must be clear and express language that benefits will continue after the agreement's expiration. (Id. at pp. 819-820.)