Long Island Employment Law Blog
Most employees in the United States are considered to be at-will employees. At-will employment status means that an employee can be terminated at any time, for any or no reason, as long as the reason is not discriminatory. It also allows employers the freedom to decide the terms of employment without specifying any benefits, if any, the employer plans on giving an employee. On the other hand, employees who are in a union are generally covered under a contractual agreement stipulating the conditions of employment such as when he or she can be fired and any benefits he or she is entitled to, such as health care benefits and retiree benefits.
On February 20, 2018, the United States Supreme Court settled the question of whether a union contract, that did not explicitly specify the termination date of health care benefits, entitled a group of retirees to lifetime health care benefits.
In CNH Industrial N.V. v. Reese, a group of retirees, had a collective-bargaining agreement (“CBA”) that expired in 2004. The agreement contained a provision providing health care benefits to “[e]mployees who retire under the . . . Pension Plan.” Although this provision did not specify when, if at all, this entitlement expired, the CBA contained another clause stating that “[a]ll other coverages” ended after retirement. The CBA also specified that the group benefit plan “r[an] concurrently” with the agreement and in fact, contained a “general durational clause” specifying that the agreement terminated in May 2004.