Courts don’t like ambiguity, as retiree health benefit case shows

In our law practice, the main focus is on issues related to the legal problems that employed individuals face in the workplace and on trying to help those individuals obtain justice. But considering that the employee of today is the retiree of tomorrow, we figure some California readers may be interested in a decision announced this week by the U.S. Supreme Court.

The action came Monday in a case out of West Virginia involving a dispute between a company and its retired employees. At issue is a provision in a collective bargaining agreement dating to the 1990s that says that retirees receiving a monthly pension will also receive health care benefits.

The retirees interpreted that to mean that they were to receive health insurance without cost for life. But the company that signed that deal was sold to another in 2000 and the new firm acted to shift some of the cost of the health benefits to the retirees. When the case reached the 6th Circuit Court of Appeals, judges ruled in the retirees favor.

Supreme Court transcripts show that both sides knew that the contract language on this issue was ambiguous. That is something that bothered some of the Supreme Court members. In the end, the high court ruled that the appeals court had improperly tipped the scales in the retirees’ favor on the basis of a misapplied legal theory and in violation of standard contract law tenets.

They ordered the case back to the appeals court for reconsideration “under the correct legal principles.”

Some pundits observe that the Supreme Court didn’t flat out overturn the matter in favor of the company. It does, however, open the door and forces the attorneys for both sides to try to make their cases. And in that regard, the four liberal justices on the court suggested the contract, taken as a whole, might still allow the retirees to win.

Protecting the rights of workers as they strive to make an honest living can be a complex task. An attorney’s help can be invaluable. And what this case shows is that then effort doesn’t necessarily end when a worker leaves a company’s employ.

Source: The Washington Post, “Supreme Court sends back ‘misapplied’ retiree health-benefit case,” Robert Barnes, Jan. 26, 2015

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