Alday v. Raytheon Company (Ninth Circuit; No. 08-16984)

The Ninth Circuit yesterday in Alday v. Raytheon affirmed a summary judgment order in favor of a class of retirees from Raytheon which required Raytheon to continue to pay insurance premiums. Since 1972 Raytheon and its predecessor Hughes Missile Systems paid insurance premium of healthcare coverage for early retirees and their dependents until age 65. This was done according to a series of collective bargaining agreements (CBAs). In 2004 Raytheon changed its policies and limits its contributions to premiums for this class of retirees and began charging the plaintiffs monthly payments for their healthcare. Naturally the retirees sued for breach of the CBAs and also alleged violations of the Labor Management Relations Act (29
U.S.C. § 185) and Employee Retirement Income Security (ERISA, 29 U.S.C. § 1132).

The district court granted the plaintiffs motion for summary judgment. The district court concluded that the CBAs obligated Raytheon to continue to pay the premiums. The appeals court described the dispute as a matter of contract interpretation.” The CBAs contained an express duration. In subsequent ERISA plans Raytheon reserved rights to itself to terminate the payments. The court however found repeated statements where “Raytheon expressly agreed to continue to pay premiums for medical insurance for the plaintiffs until retirees and their spouses became 65 years of age” (Slip Opinion pg. 15). The court held that Raytheon’s agreements therefore survived the expiration of the CBAs and couldn’t be unilaterally terminated by Raytheon using the rights it had reserved.

In a separate order Raytheon moved for judgment on the pleadings. The plaintiffs sought punitive and extra contractual damages, which the district court found them not entitled to. The Ninth Circuit stated that it didn’t need to determine whether the exceptions for such damages existed because the plaintiffs failed to alleged sufficient facts supporting their claim (pg. 15).

The court is rather run of the mill contracts interpretation opinion. It presents no new law.

Summary Judgment and the Americans with Disabilities Act

The Ninth Circuit issued an opinion today in EEOC v. UPS (http://www.ca9.uscourts.gov/datastore/opinions/2010/08/27/08-56874.pdf).

The court reversed the district court's grant of summary judgment in favor of UPS. Notably the court held that summary judgment is not appropriate where "there is a disputed issue of fact" concerning the effectiveness of modifications made by the employer" where the "employer was aware or should have been aware that" the modifications made were not effective(pg. 17).

Under the ADA employers must make "reasonable accommodations" to qualified individuals unless the employer can show that such accommodations would impose an undue hardship. The court carefully outlined what makes a reasonable accommodation:
EEOC regulations define the term reasonable accommodation:

“[m]odifications or adjustments that enable a covered entity’s employee with a disability to enjoy equal benefits and privileges of employment as are enjoyed
by its other similarly situated employees without disabilities.” 29 C.F.R. § 1630.2(o)(1)(iii).

“An ineffective ‘modification’or ‘adjustment’ will not accommodate a disabled individual’s limitations.” Barnett, 535 U.S. at 400. Ineffective modifications
therefore are not accommodations. Cf. Humphrey v. Mem’l Hosps. Ass’n, 239 F.3d 1128, 1137 (9th Cir. 2001)(“An appropriate reasonable accommodation must be effective,
in enabling the employee to perform the duties of the position.” (internal quotation marks omitted)).

“The reasonablenessof an accommodation is ordinarily a question of
fact.” Lujan v. Pac. Mar. Ass’n, 165 F.3d 738, 743 (9th Cir.
1999)."

The court's summary judgment analysis circumscribes a new limit in the circuit on the application of summary judgment in ADA cases. A limit that may creep into other areas of employment discrimination.