On January 14, 2008, the NAM and other groups filed an amicus brief in this case, arguing that a court does not have jurisdiction to hear a case brought by employees whose claims for retiree health care benefits expired when their labor contract expired. The employees worked under a union contract that provided certain health care benefits for workers that retired during the contract term, but the employees did not retire until after that contract had expired. The company argued that active employees cannot claim future benefits under a contract that has expired, and the court lacked jurisdiction under the Labor Management Relations Act and ERISA to hear the case.
Active employees can negotiate, through their union, to forego future retirement benefits in favor of immediate compensation, so no retirement benefits under an expired contract are vested until agreed to in a new contract. The lower court allowed a suit brought 15 years after the contract expired.
The NAM brief argued that the decision imposed an irrevocable vesting requirement, which served as a disincentive to providing retiree health benefits. Given the volatile and changing pricing factors to which health care benefits are subject, manufacturers "have a critical need to know with certainty the scope of their commitments to provide and pay for health care benefits for their active employees and their former employees." The trial court's decision allowing this suit to proceed "so threatens the financial health and global competitiveness of amici members and employers who offer retiree health care benefits that even those employers who would like to arrange for the provision of such benefits may not risk doing so." The decision will lead to increased costly benefits litigation. Not only will active employees seek to have courts declare future retiree medical benefits vested for life during any contract they deem favorable prior to their actual retirement, but they will also seek to force companies to reinstitute retiree medical benefits for long-expired labor agreements that the retirees perceive to be more beneficial than their present retiree benefits.
The NAM joined with the American Benefits Council and the HR Policy Association in the amicus brief.
In 2009, the court reversed the district court's decision. It found no express language in the contract that provided for vesting of retirement benefits, and the benefit plan contained a right-to-terminate clause for employees that have not yet reitred. Benefits vest upon actual retirement, not upon the date when an employee could have retired. It ordered the district court to dismiss Plaintiffs' claims which depend exclusively on the theory that retiree medical benefits vested before retirement.