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The NAM sent a letter 3/13/06 to the Sixth Circuit supporting the petition for rehearing en banc in this case involving whether retirement health care benefits vested for life. The trial court and the Sixth Circuit ruled that retirees and surviving spouses were entitled to lifetime health care coverage pursuant to contracts negotiated between their employer and the UAW. The court recognized that there is no statutory right to lifetime health care benefits, but that life and health insurance benefits carry with them an inference that the parties intended them to continue for life. The NAM’s letter endorses an amicus brief filed by the U.S. Chamber of Commerce that calls on the court to recognize that an employer’s commitment to vest welfare benefits must be stated in clear and express language and should not be inferred lightly. Otherwise, courts will rewrite collective bargaining agreements, undermining federal labor policy promoting such agreements. Medical costs are unpredictable and have been rising rapidly for years, and a presumption that health benefits vest for life creates uncertainty when companies are struggling to survive. The Sixth Circuit will become a magnet jurisdiction for this kind of litigation if retiree benefits are liberally interpreted to survive contract expiration.

The Sixth Circuit declined to rehear the case, and the Supreme Court denied review.