Arbuckle v. General Motors
Docket No. 151277
Trial Lawyers' Bottom Line: Absent contrary intent, CBA creates non-vested benefits that can be modified by later CBAs for earlier retirees.
Clifton Arbuckle (who has passed away since filing this suit) injured his back while working for GM. He received a disability pension and later also began receiving Social Security Disability Insurance. At the time, GM and UAW had agreed that GM would not “coordinate” workers’ compensation and disability pension benefits. This meant GM would not reduce the workers’ compensation payments in light of the injured worker also receiving social security disability insurance. GM had this right under MCL 418.534, but waived it through the CBA with UAW. Arbuckle retired in 1993, months before that CBA expired. In 2009, with GM facing bankruptcy, GM and UAW agreed to a new CBA that allowed GM to exercise its right to coordinate the payments for past retirees. Arbuckle sued to retain his benefits listed in the 1990 CBA.
The Court first had to determine whether it had jurisdiction. In a unanimous opinion authored by Justice Larsen, the Court determined that it did. Justice Larsen made clear that § 301 of the Labor Management Relations Act allows a party to remove labor disputes to federal courts, but the Supreme Court has stated that states retain concurrent jurisdiction over controversies involving CBAs. After verifying it had jurisdiction, the Court needed to determine whether state law or federal law applied. Because resolving the case required interpreting a CBA, § 301 preempted the state-law claim. Now that the Court had determined which law applied, it moved to the merits.
The question was which CBA controlled: the 1990 agreement or the 2009 agreement? To answer this, the Court needed to determine whether the promise to not coordinate benefit payments was a vested right or a non-vested right. Under federal law, a union can represent and bargain for already retired employees for non-vested benefits. But “when an employer explicitly obligates itself to provide vested benefits, that promise is rendered forever unalterable without retirees consent.”
To determine whether a benefit is vested or non-vested, the Court looked to the intention of the parties and the specific language of the CBA. Absent contrary intent, the Court said contractual obligations should be interpreted to cease upon termination of the bargaining agreement. The Court also highlighted that the U.S. Supreme Court had previously overturned Sixth Circuit precedent that placed a thumb on the scales in favor of vested rights.
Citing a similar Sixth Circuit case, the Court noted that there was a durational limit on the benefit. The 1990 CBA said the benefits extended only “until termination or earlier amendment of the 1990 [CBA],” which expired in 1993. All later GM CBAs also included durational limits. This durational limit showed that the agreement was not intended to create a vested benefit. Because the promise to not coordinate benefit payments was a non-vested benefit, GM and UAW could modify this promise in later CBAs for earlier retirees.