Are Retirees Third-Party Beneficiaries of a Collective Bargaining Agreement ?
In Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), the United States Supreme Court commented that, although unions need not bargain on behalf of retirees (whom they do not directly represent), retirees are not without protection, because "under established contract principles, vested retirement rights may not be altered without the [retiree's] consent," and if such benefits were so altered, the retiree "would have a federal remedy under 301."
Ever since, federal courts have regularly permitted retirees to sue under section 301 to enforce rights to retirement benefits allegedly contained in collective bargaining agreements.
Federal courts "have recognized a number of situations in which individual plaintiffs, not personal signatories to a collective bargaining agreement, may nonetheless sue an employer for breach of a collective bargaining agreement without also suing the union" under section 301. Anderson v. AT&T Corp., 147 F.3d 467, 473 (6th Cir. 1998).
In these cases, standing rests on the rule that "a promise in a collective bargaining agreement to pay certain wages" or retirement benefits to a class of employees "makes those employees third-party beneficiaries of the agreement for purposes of Section 301." Anderson, 147 F.3d at 473.
Thus, even where the union owes no duty to the plaintiffs because they are not current members of the bargaining unit, the courts "have long recognized that the plaintiff can recover for the employer's breach of a collective bargaining agreement" as a third-party beneficiary of the agreement. Anderson, 147 F.3d at 473.