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International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America UAW v. Honeywell International Inc.

United States District Court, E.D. Michigan, Southern Division

July 25, 2018

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA UAW, and THOMAS BODE, BRUCE EATON, WILLIAM BURNS, PETER ANTONELLIS, and others similarly-situated, Plaintiffs,
v.
HONEYWELL INTERNATIONAL INC., Defendant.

         ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND A PERMANENT INJUNCTION [#168], DENYING AS MOOT PLAINTIFFS' MOTION TO FILE SUPPLEMENTAL PLEADING [#169], GRANTING DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT [#174], and DENYING AS MOOT PLAINTIFF'S OBJECTION TO MAGISTRATE JUDGE'S ORDER DENYING MOTION TO COMPEL [#86]

          Denise Page Hood Chief Judge United States District Court.

         I. INTRODUCTION

         Plaintiffs, including the UAW and the individually named Plaintiffs (retired hourly employees who worked for Defendant and its predecessors), filed the present action on September 15, 2011. Presently before the Court are the parties' cross-motions for summary judgment with respect to whether Plaintiffs are entitled to, and Defendant is obligated to provide, minimum premium contributions for health care coverage for retirees of Defendant. Plaintiffs also filed a Motion to File Supplemental Pleading for the purpose of amending their pleadings. The motions are fully briefed (“Motion to Amend”), and the Court held a hearing on the motions on June 26, 2018.

         II. BACKGROUND[1]

         For over 50 years, the UAW has represented more than 4, 700 retired Honeywell (and its predecessors) manufacturing employees in collective bargaining negotiations. The UAW and Defendant have been parties to a series of CBAs that were renegotiated every three or four years. In every CBA executed from the 1965 CBA up to and including the 2003 and 2007 CBAs, the Agreement Regarding Insurance (“Agreement”) provision included the following language (the “full ” provision):

[T]he Company shall contribute the full premium or subscription charge applicable to the coverages of a pensioner (not including a former employee entitled to or receiving a deferred vested pension) and an employee terminating at age 65 . . .

See, e.g., Dkt. No. 49, Ex. 5 (1965 CBA), App'x C, Sect. 5(G), at 12-13; Dkt. No. 49, Ex. 8 (2003-2007 CBA), PgID 1905; Dkt. No. 49, Ex. 9 (2007-2011 CBA), PgID 19-12-13. The 2011 CBA consisted only of a “Memorandum of Terms of Settlement of the 2011 UAW-Honeywell Master Negotiations” (the “Memorandum”). Nothing in the Memorandum addressed - or expressly eliminated - the “full premium” provision.

         In 2003, the parties agreed to the inclusion of a new Part VI to Appendix C of the CBA (the “Plan”), a section that also was included in the 2007 CBA. Part VI of the Plan states:

During the 2003 UAW Honeywell Master Negotiations, the Company and the Union shared a strong concern regarding the protection of retiree health care benefits. In 2003 UAW Honeywell Master Negotiations the Company and Union agree as follows:
• The subject of health care benefits for present and future retirees, their dependents, and surviving spouses, including the limit described below on Company retiree health care contributions, will be a mandatory subject of bargaining for 2007 UAW Honeywell Master Negotiations and for all future UAW Honeywell Master Negotiations.
• The Company will pay the cost of retiree health care coverage during the term of the 2003 UAW Honeywell Master Agreement as described in its Insurance Section. The Company's contribution for health care coverage after 2007 for present and future retirees, their dependents, and surviving spouses covered under the UAW Honeywell Master Agreement shall not be less than (A) the actual amount of the Company's retiree health care contribution in 2007 or (B) the Company actuary's 2003 estimate of the Company's retiree health care contribution in 2007, whichever is greater. As stated above, this limit will be a mandatory subject of bargaining for 2007 UAW Honeywell Master Negotiations and for all future UAW Honeywell Master Negotiations. Notwithstanding such negotiations, the Company's contributions shall not be less than the greater of: (A) the actual amount of the Company's retiree health care contribution in 2007 or (B) the Company actuary's 2003 estimate of the Company's retiree health care contribution in
• The above limit on Company retiree health care contributions will not apply to any year prior to calendar year 2008.
* * * * *
• The provisions of this Agreement concerning Retiree Health Care Costs and the Company's obligation to bargain regarding retiree health care benefits shall be binding upon the successors and assignees of the Company, unless Honeywell chooses to retain such obligations. . . .
• Provided however this Agreement concerning Retiree Health Care Costs and the Company's obligation to bargain regarding retiree health care cost benefits shall not impair any existing legal rights that current retirees may have with respect to their post employment health care benefits.
• The Company and the Union agree to work together to develop possible ways to contain health care costs, including drug costs, that will benefit plan participants and the locations covered under the UAW Honeywell Master Agreement.

         [Docket No. 49, Ex. 8, Pg ID 1907]

         On October 23, 2013, Defendant advised the UAW that Defendant would:

begin to cap contributions for those members of the class that (i) retired under the Honeywell-UAW Master CBA on or after May 3, 2003; or (ii) retired under the Cleveland, Tennessee CBA on or after March 13, 2004. This includes surviving spouses and eligible dependents of individuals that retired after those dates. Collections from those class members will commence on January 1, 2014. We will soon be sending out individual notices to ...

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