The DesMoines Register reports that U.S. District Judge James E. Gritzner of the U.S. District Court for the Southern District of Iowa found that the union could not prove that retiree benefits were for their lifetimes — that is, vested.
“The court is not unaware of the expectations of the Newton retirees nor unsympathetic in the result reached herein,” Gritzner wrote, according to the news report. “However, the union has not carried its burden under the law of showing that the company agreed to vest retiree medical benefits.”
The issue leading to the suit started when Whirlpool said it would buy Maytag in 2005 for $1.7 billion and closed the company’s Newton factory in 2007. Whirlpool, of Benton Harbor, Michigan, and the union that represents Maytag’s employees and retirees started collective bargaining over benefits in July 2008. Whirlpool submitted a proposal to bring Maytag retirees into line with Whirlpool retirees, but Maytag union leaders said retiree benefits were for their lifetimes, and that retiree benefits were not part of the negotiations.Later that month, Whirlpool sued the union (see Whirlpool Sues Union to Modify Retiree Medical Benefits) and three individual employees, anticipating that it would modify retiree medical benefits. Gritzner allowed the suit to move forward, agreeing with the company that it had a reasonable uncertainty that it could modify retirees’ benefits without the affected parties suing based on the local chapter of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers’ (UAW) refusal to bargain and UAW’s frequent litigation in cases with identical facts (see Fear of Union Litigation Gives Whirlpool Standing in Retiree Benefit Suit).