‘Lack of support’ for continuation of retiree health benefits beyond length of contract

The Supreme Court did not appear overly supportive of the so-called Yard-Man presumption during arguments this week in M&G Polymers USA, LLC v. Tackett.

The Yard-Man presumption infers that the duration of retirement health insurance benefits established under a collective bargaining agreement is meant to apply for the lifetimes of covered retirees if the collective bargaining agreement is silent on the issue.

“There seems to be a lack of support from both the Justices and counsel for sustaining the Yard-Man inference. It was not seriously debated that the inference should continue,” says Amy Covert, a partner with management-side law firm Proskauer, who was in the court room on Monday. “That’s the biggest takeaway for employers.”

Some courts have maintained that health benefits should last only as long as the contract itself, while others have ruled that, when the contract is silent on the matter, the benefits are vested until the death of the retiree.

“I don’t think it’s clear what it will be replaced with,” says Covert. “I don’t think the Court will come out with any clear rule beyond applying ordinary contract rules.”

Source: Employee Benefit News