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.
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