Donald H. Maurer v. Joy Technologies, Inc.

*The Honorable John Feikens, United States District Judge for the
Eastern District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0166P (6th Cir.)
File Name: 00a0166p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
DONALD H. M AURER; LESLIE
T. J OHNSON ; W ARREN H.
R EES; W ILLIAM P OMPEY ;
FLOYD F. GLADMAN ; UNITED
S TEELWORKERS OF AMERICA ,
Plaintiffs-Appellees/
Cross-Appellants,
v.
J OY TECHNOLOGIES, INC.,
Defendant-Appellant/
Cross-Appellee.
;>

1
Nos. 98-3964/4029
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 94-02015—Patricia A. Gaughan, District Judge.
Argued: December 15, 1999
Decided and Filed: May 12, 2000
Before: RYAN and NORRIS, Circuit Judges; FEIKENS,
District Judge.*

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2 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
_________________
COUNSEL
ARGUED: Chris J. Trebatoski, MICHAEL, BEST &
FRIEDRICH, Milwaukee, Wisconsin, for Appellant. Melvin
P. Stein, UNITED STEELWORKERS OF AMERICA,
Pittsburgh, Pennsylvania, for Appellees. ON BRIEF: Chris
J. Trebatoski, Mitchell W. Quick, MICHAEL, BEST &
FRIEDRICH, Milwaukee, Wisconsin, David P. Bertsch,
BUCKINGHAM, DOOLITTLE & BURROUGHS, Akron,
Ohio, for Appellant. Melvin P. Stein, UNITED
STEELWORKERS OF AMERICA, Pittsburgh, Pennsylvania,
for Appellees.
_________________
OPINION
_________________
ALAN E. NORRIS, Circuit Judge. Plaintiffs are the United
Steelworkers of America union and several retirees formerly
employed by defendant, Joy Technologies, Inc. (“Joy”). After
Joy changed plaintiffs’ retiree health benefit plans, plaintiffs
filed suit alleging violations of § 301 of the Labor-
Management Relations Act of 1947 (“LMRA”), 29 U.S.C.A.
§ 185 (West 1998), § 502(a)(1)(B) and (a)(3) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C.A. § 1132(a)(1)(B) and (a)(3) (West 1999), and the
doctrine of promissory estoppel. Plaintiffs’ complaint was
based on their claim that their benefits were vested and could
not unilaterally be altered by Joy. The district court granted
summary judgment to those plaintiffs that had retired prior to
August 19, 1991, on the LMRA and ERISA claims.
Summary judgment was granted to Joy against those plaintiffs
retiring after August 19, 1991, under the LMRA, ERISA, and
promissory estoppel claims. Plaintiffs’ motion for attorneys’
fees was denied. On appeal, Joy challenges the judgment
against it on the LMRA and ERISA claims. On cross-appeal,
plaintiffs challenge the summary judgment against those

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Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
3
plaintiffs retiring after August 19, 1991, and the district
court’s denial of attorneys’ fees. For the following reasons,
the district court is affirmed.
I.
Joy operates an industrial fan manufacturing plant in New
Philadelphia, Ohio. Plaintiffs are former Joy employees who
were represented by the United Steelworkers of America
union (“the union”) while active employees. The union
served as the collective bargaining representative for the
production and maintenance (“P&M”) and clerical employees.
The employment terms of these groups of workers were
jointly negotiated (and the employee units were merged in
1980), but separate agreements were produced. The parties
agree that the P&M and clerical units were given the same
benefits under the collective bargaining agreements
(“CBAs”); therefore, this court will discuss the CBAs for both
units as if they were one.
Every three years, the parties negotiated a new CBA. One
of the features of the CBAs was a provision for retiree
benefits. The question in this case is whether, in the CBAs,
the parties intended the retirement benefits either to vest as
lifetime benefits or to terminate at the end of the three-year
term of the CBA granting the benefits. The relevant
provisions are as follows:
1974
In 1974, the CBA contained the following relevant
provisions:
Pensions, Group Insurance and Supplemental
Unemployment Benefits. . . .
A group insurance agreement is contained in a separate
document. . . .

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4 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
For pensioners and spouses, age 65 or over, who are
now covered by the Group Insurance Program, the
Company will make available a Medicare Supplemental
Insurance Program. The cost is to be paid entirely by the
pensioner and will be deducted from his pension check
upon submission of an appropriate written authorization.
For pensioners and spouses under age 65, the retiree
Group Insurance Programs in effect on September 1,
1974 will be continued until replaced by a new program
on September 1, 1975.
. . .
Previous Agreements. This [CBA] when signed shall
supersede all previous supplements and agreements made
between the parties except as provided for under the
terms of this [CBA].
. . .
Termination Date. The basic [CBA], the Pension
Agreement, the Group Insurance Agreement, and the
Supplemental Unemployment Benefit Agreement, shall
remain in full force and effect until midnight August 31,
1977.
At least (60) days prior to August 31, 1977, either
party may give notice to the other party of its desire to
negotiate with respect to the terms and conditions of a
new Agreement, including the terms and conditions of
new Pension, Insurance, and Supplemental
Unemployment Benefit Agreements. If the parties shall
not agree on the terms and conditions of such new
agreements by midnight August 31, 1977, either party
may thereafter resort to strike or lockout . . . .
A Memorandum of Agreement was also executed by the
parties in 1974. It contains the following pertinent language:
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
21
Joy’s ERISA plan. Nor did this lawsuit seek to resolve
significant ERISA legal questions inasmuch as this issue
has been addressed in numerous cases as evidenced by
this Court’s Opinions. Fifth, the Opinions in this case
reveal that both parties’ positions had merit.
Plaintiffs claim that Joy “surreptitiously inserted a non-
bargained provision in its insurance booklets and used this
provision as the centerpiece of its justification to unlawfully
alter retiree benefits. . . . Not to find bad faith in such conduct
is an abuse of discretion.” They also argue that they “sought
to convey a benefit on all members of the ERISA plan
affected by Joy’s unlawful conduct.” Finally, plaintiffs argue
that retirees cannot afford to finance protracted and expensive
litigation, and unions cannot afford to bring suit on behalf of
all wronged retirees. They maintain that “[u]nless the
expense of such litigation is shifted, more retirees will suffer
a loss of all or some of their pension income or go without
health insurance and/or care they otherwise should obtain.”
The district court considered all of the relevant factors as
instructed by King. The court found no bad faith on Joy’s
part, determined that attorneys’ fees would not act as a
deterrent to other employers, and indicated that no significant
ERISA legal questions were resolved. The court did not
abuse its discretion either in its consideration of any of the
King factors or in its weighing of the factors to determine that
fees should not be awarded. Therefore, the district court did
not abuse its discretion in denying plaintiffs’ request for
attorneys’ fees.
IV.
The judgment of the district court is AFFIRMED.

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20 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
King, 775 F.2d at 669, as relevant to the district court’s
determination:
(1) the degree of the opposing party’s culpability or bad
faith; (2) the opposing party’s ability to satisfy an award
of attorney’s fees; (3) the deterrent effect of an award on
other persons under similar circumstances; (4) whether
the party requesting fees sought to confer a common
benefit on all participants and beneficiaries of an ERISA
plan or resolve significant legal questions regarding
ERISA; and (5) the relative merits of the parties’
positions.
An abuse of discretion exists only when “the court has the
definite and firm conviction that the district court made a
clear error of judgment in its conclusion upon weighing
relevant factors.” Id. No single factor is determinative.
Schwartz v. Gregori, 160 F.3d 1116, 1119 (6th Cir. 1998),
cert. denied, 119 S. Ct. 1756 (1999). There is no presumption
that attorneys’ fees will be awarded. See Foltice v.
Guardsman Prods., Inc., 98 F.3d 933, 936 (6th Cir. 1996).
The district court addressed the King factors in its opinion:
First, there was no degree of bad faith on defendant’s
part and this Court cannot find a great degree of
culpability given the difficulty in determining whether it
was intended that benefits vested. Additionally, the
Court found benefits to vest for only some of the
plaintiffs. Second, defendant admits that it is able to
satisfy an award of fees. Third, the Court does not
consider that an award of fees would act as a deterrent to
other employers under similar circumstances given that
defendant did not necessarily act with bad faith. See, for
example, Foltice, supra, wherein the court stated that the
“deterrent effect . . . is likely to have more significance in
a case where the defendant is highly culpable . . .”
Fourth, while this was a class action, plaintiffs did not
seek to confer a common benefit on all participants of
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
5
Retiree’s Insurance. 1. Effective September 1, 1975,
for employees who retire on or after August 31, 1974 . . .
a. The Company will establish a group insurance
program to provide hospital benefits and physicians’
service benefits coverage . . . for pensioners (and their
eligible dependents) who are not eligible for Medicare
. . . .
c. The Company will pay the cost of such program
coverage.
d. Participation in such program in the case of pensioner
. . . shall terminate when such person first becomes
eligible for Medicare.
Finally, the 1974 Insurance Certificate contains the
following relevant provisions:
Section 13. Insurance after Retirement.
. . .
FOR EMPLOYEES WHO ELECT THE ACCIDENT
AND HEALTH RETIREMENT PLAN EFFECTIVE
PRIOR TO SEPTEMBER 1, 1975. . . . A retired
Employee not eligible for Medicare may continue his
[hospital, surgical, laboratory and x-ray and major
medical] Insurance for himself and his spouse, with the
retired Employee paying the full premium for these
coverages.
. . .
ACCIDENT AND HEALTH PLAN FOR
QUALIFIED RETIREES RETIRING ON OR
AFTER SEPTEMBER 1, 1975, AND THEIR
QUALIFIED DEPENDENTS. The following shall be
applicable to retired employees . . . who are not eligible
for Medicare and are classified as:
1. Employees who retire on or after August 31, 1974 . . . .
. . .

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6 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
Section 14. MEDICARE SUPPLEMENT. . . . (2) On
and after the date on which an employee or dependent
becomes eligible for benefits under Medicare, he shall
not be eligible or insured under this Policy for any
coverage providing benefits for Hospital, Surgical,
Laboratory and X-Ray Expenses or Major Medical
Expense Insurance. . . . The following benefits serve as
a “Medicare Supplement” . . . [at a monthly cost to the
employee of $5.00].
. . .
Termination. 1. This Agreement, and the Group
Insurance Plan established hereunder shall remain in
effect without change until midnight, August 31, 1977.
1978
The 1978 CBA and Insurance Certificate were essentially
the same as those of 1974. The 1978 Memorandum of
Agreement did not refer to any changes in retiree health
insurance benefits.
1980
The 1980 CBA contained the same Termination and
Previous Agreements clauses. The following Pensions,
Group Insurance and Supplemental Unemployment Benefits
clause was also contained in the CBA:
For pensioners and spouses, age 65 and over, who are
now covered by the Group Insurance Program, the
Company will make available and pay for a Medicare
Supplemental Insurance Program.
For pensioners and spouses under age 65, the retiree
Group Insurance Programs in effect on September 1,
1975, as outlined in the Certificate of Insurance, will
remain in effect.
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
19
when it created them. See Sprague, 133 F.3d at 401-02. As
noted above, this case is distinguishable from Sprague
because it concerns CBAs, which are two-party contracts,
rather than a plan unilaterally implemented, and therefore
unilaterally controlled, by the employer.
The reservation of rights language from 1986 was contained
in an insurance booklet that specified that retiree benefits
were contained in a separate booklet. Such a separate retiree
booklet, however, was never created. The language in the
1986 insurance booklet directing that the booklet did not
pertain to retirees, and that a separate booklet did, precludes
any argument that the provisions in the existing insurance
booklet (namely, the reservation of rights language) applied
to retirees. Therefore, the reservation of rights clause was not
applicable to retirees under the 1986 agreement.
The district court correctly found that the reservation of
rights language in the August 19, 1991, booklet insert was
effective against the retirees because “[w]hile plaintiff argues
that a bilateral agreement is not subject to unilateral
modification, the Union was obligated to grieve or enter suit
over the reservation of rights clause as the clause was
conspicuously contained in the 1991 insert and plaintiffs did
not dispute it until the filing of this lawsuit in 1994.” The
August 19, 1991, reservation of rights clearly included
retirees and was distributed to them. Therefore, those
plaintiffs retiring after August 19, 1991, do not hold vested
retirement benefits.
III.
The district court’s denial of plaintiffs’ motion for
attorneys’ fees is reviewed for an abuse of discretion.
Secretary of Dep’t of Labor v. King, 775 F.2d 666, 669 (6th
Cir. 1985). A district court is given broad discretion in
awarding attorneys’ fees in an ERISA action under 29 U.S.C.
§ 1132(g). Id. This court adopted the following factors in

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18 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
eligible for Medicare.” This clause makes clear that pre-65
benefits were intended to end only when the retiree becomes
Medicare-eligible, not when the CBAs expire. The CBAs
also promise the continuation of dependents’ benefits after the
retiree reaches Medicare eligibility. A determination that
retiree benefits do not vest would render these promises
illusory, in contravention of Yard-Man’s directive. There is
also language in the insurance certificates that gives Joy the
unilateral right to terminate benefits for employees on leave
of absence, yet no similar provision was included for retiree
benefits. These provisions indicate that the parties intended
to vest benefits.
Therefore, although the CBAs are not models of clarity,
caselaw of this circuit leads to the conclusion that they do vest
retirement benefits for individuals retiring before mid-1991,
when reservation of rights language applicable to retirees was
distributed to plaintiffs. The durational provisions Joy cites
are general in nature, and only refer to agreements between
the parties, not to benefits created by the agreements. Further,
the CBAs promise retirees (as young as age 55) a Medicare
Supplement at age 65. An analogous provision was found to
create an illusory promise unless benefits were vested in
Yard-Man. See Yard-Man, 716 F.2d at 1481. The language
of the CBAs indicates that retirement benefits were intended
by the parties to vest.
The district court correctly found that the reservation of
rights language printed in the 1986 Insurance Plan booklet,
but never distributed to retirees, was not effective as to
plaintiffs. Joy claims that there is no distribution
requirement, and that reservation of rights language is
effective when contained in the plan itself. Joy bases these
arguments on Sprague, where reservation of rights language
was contained in the plan (unilaterally instituted by the
employer), but not in all Summary Plan Descriptions
distributed to beneficiaries. The Sprague court held that
because such language had always been in the plan itself, it
was clear that the employer did not intend to vest the benefits
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
7
The 1980 Memorandum of Agreement stated that Joy would
pay the full Medicare Supplement cost for all then-current
retirees and those retiring under the 1980 CBA.
1983
The 1983 CBA contained relevant language identical to the
1980 CBA. In 1983, however, an Insurance Certificate was
not prepared.
1986
The 1986 CBA was identical in all relevant respects to
those of 1980 and 1983. The 1986 Memorandum of
Agreement indicates that there would be a change in the
Medicare Supplement deductible for those retiring after
September 1, 1986. Also in 1986, an Employee Benefits Plan
booklet (formerly the Insurance Certificate) was issued with
the following provision:
Termination of the Plan. Joy Manufacturing Company
reserves the right to terminate, suspend, withdraw, amend
or modify the Group Health Care Benefits Plan in whole
or in part at any time.
The booklet contained a clause stating that “[b]enefits
provided during retirement are described in a separate
booklet.” Plaintiff presented evidence suggesting that the
booklet was not distributed to retirees and that no separate
booklet describing retirement benefits was created.
1989
In 1989 the CBA was the same in relevant respects as those
of the previous three agreements. In addition, a handbook
was prepared entitled “Your Benefits Handbook — Hourly
and Salaried Bargaining Employees.” Plaintiffs presented
evidence that this handbook was not distributed to retirees
until August 1991. It contained the following provision:

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8 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
Amendments. Joy reserves the right to amend or
terminate any of the plans. The right to amend includes
the right to curtail or eliminate coverage for any
treatment, procedure, or service regardless of whether
you are receiving treatment for an injury, illness, or
disease contracted prior to the effective date of the
amendment.
A supplement entitled “Health Care Coverage After
Retirement,” sent with a letter dated August 19, 1991,
contained the following language:
Plan Changes. This insert summarizes your current
retiree health care coverage. However, since no one can
predict the future, Joy reserves the right to make changes
or terminate these Plans.
In March 1993, Joy sent letters to plaintiff retirees (who had
retired under the 1974 through the 1989 CBAs), announcing
a new cost-sharing plan to replace their insurance programs.
In response to the changes, plaintiffs filed this suit alleging
violations of § 301 of the LMRA, 29 U.S.C. § 185, § 502 of
ERISA, 29 U.S.C. § 1132, and of the doctrine of promissory
estoppel. The suit was filed as a class action, with plaintiffs
purporting to sue on behalf of themselves, their spouses,
dependent children, and other persons similarly situated.
Plaintiffs claimed that their retirement benefits had vested
under the prior CBAs, and that Joy’s unilateral alteration of
their benefits therefore breached the CBAs in violation of the
LMRA and ERISA. They also claimed that Joy had made
representations to them that the benefits were to last for their
lifetimes, and that Joy was now estopped from altering the
benefits.
In a January 17, 1997, opinion, the district court found that
retirement benefits had vested for those retiring under the
1974, 1978, 1980, and 1983 CBAs. The court found that,
beginning in the 1986 agreement, Joy included a reservation
of rights clause and that, consequently, those who retired
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
17
agreement, and are not clearly meant to include retiree
benefits. See Yard-Man, 716 F.2d at 1482-83 (general
durational clause not necessarily meant to include retiree
benefits). Even though the clause makes clear that the
insurance agreement terminates after three years, caselaw
indicates that the termination of the agreement does not
indicate the termination of benefits created by it, if the
benefits are intended to vest. See id. If benefits have vested,
then retirees must agree before the benefits can be modified,
even by a subsequent CBA between the employer and active
employees.
Joy next points to the reiteration in each CBA that “[f]or
pensioners and spouses under age 65, the retiree Group
Insurance Programs in effect on September 1, 1975 . . . will
remain in effect.” However, this provision is also subject to
the interpretation that it is repeated in each CBA because it
specifies what benefits are available to those who retire
during the term of that CBA, and not what benefits are
available for past retirees, whose rights have already vested.
Therefore, this provision is not determinative.
Joy points to the clause requiring notice from either party
of “its desire to negotiate with respect to the terms and
conditions of a new Agreement, including . . . Insurance . . .
Agreements.” Again, just because an insurance agreement is
ended and renegotiated does not mean benefits also end.
Because active employee benefits are a subject of mandatory
bargaining, and retirement benefits are not, this provision was
not necessarily meant to incorporate retirement benefits.
The CBAs provide that pre-Medicare retirees receive
certain benefits until Medicare eligibility at age 65. Because
the CBAs permit retirement at age 55 and promise insurance
at age 65, the promise is meaningless if it could be terminated
in three years. The same situation was present in Yard-Man,
supra, where the court inferred vested benefits partly from an
analogous provision. In addition, the CBAs specify a
termination of pre-65 benefits when the retiree “first becomes

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16 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
on Sprague fail under the same analysis applied in BVR
Liquidating.
Joy also argues that the district court erred by turning the
Yard-Man inference that retirement benefits were meant to
vest into a presumption that shifted the burden of proof to
Joy. The court did not, however, shift the burden of proof to
Joy; the court acknowledged in its opinion that there is no
legal presumption that benefits vest and that the burden of
proof rests on plaintiffs.
Joy goes further and claims that there is a “presumption
under ERISA that employee welfare benefit plans do not
vest.” However, the cases cited for this proposition, see, e.g.,
Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995),
merely state that although ERISA does not require vesting of
such benefits, parties may agree to create and vest them.
Joy’s arguments have already been addressed by this circuit
in Golden, 73 F.3d at 655 (“In [Curtiss-Wright Corp. v.]
Schoonejongen, [cited by defendant] . . . [t]he vesting of
rights through agreements such as CBAs was not at issue. . . .
The Court simply noted that ERISA does not mandate
minimum vesting requirements for welfare benefit plans, and
that ERISA allows employers to adopt, modify, or terminate
such plans at will. The case bears no relation to the issues in
Yard-Man.”) (citations omitted). Curtiss-Wright, like
Sprague, dealt with a benefit plan unilaterally implemented
by the employer, not with a CBA.
According to Joy, the CBAs’ language clearly terminated
retiree insurance benefits along with the rest of the CBA
provisions by providing that “ [t]he basic [CBA], the Pension
Agreement, the Group Insurance Agreement, and the
Supplemental Unemployment Benefit Agreement, shall
remain in full force and effect until midnight [expiration
date],” and that “[t]his [CBA] when signed shall supersede all
previous supplements and agreements made between the
parties except as provided for under the terms of this [CBA].”
These clauses are general durational provisions for the entire
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
9
under the 1986 CBA and thereafter did not hold vested
benefits.
On October 7, 1997, the district court amended its opinion
on plaintiffs’ motion. The court found that the reservation of
rights clauses were ineffective as to those who retired
between 1986 and August 19, 1991, and held that those
plaintiffs retiring prior to August 19, 1991, had vested retiree
benefits. The court noted that the 1986 booklets contained
reservation of rights language, but were apparently only
applicable to active employees since the booklets indicated
that “[b]enefits provided during retirement are described in a
separate booklet.” Further, the court pointed to evidence that
the booklets were not distributed to active employees until
1988 and were never distributed to retirees. No separate
booklet dealing with retirement benefits was ever published
during the 1986 CBA term. A letter containing an insert for
a benefits handbook and expressly directed to retirees was
distributed in 1991 (dated August 19, 1991). This insert, the
court found, contained reservation of rights language
applicable to retirees. For these reasons, the court held that
benefits were vested for those who retired prior to August 19,
1991, but not after.
Also in its October 7, 1997, opinion, the district court
granted Joy’s motion for summary judgment on the
promissory estoppel claims for plaintiffs who retired after
August 19, 1991. The court held that any reliance by
plaintiffs on Joy’s representations concerning the vesting of
retirement benefits was not reasonable in the face of a clear
reservation of rights clause after August 19, 1991.
On March 17, 1998, Joy filed a motion to amend the
judgment based on Sprague v. General Motors Corp., 133
F.3d 388 (6th Cir. 1998) (en banc), which the district court
denied. Finally, on July 31, 1998, the district court awarded
plaintiffs prejudgment interest, but denied attorneys’ fees and
costs.

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10 Maurer, et al. v. Joy
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Joy appeals the district court’s determination that retiree
benefits vested for those retiring prior to August 19, 1991,
and the resulting judgment against it under the LMRA and
ERISA. Plaintiffs cross-appeal the district court’s
determination that retiree benefits did not vest for those
retiring after August 19, 1991, and the denial of attorneys’
fees.
II.
A district court’s order of summary judgment is reviewed
de novo. Pope v. Central States S.E. & S.W. Areas Health &
Welfare Fund, 27 F.3d 211, 212-13 (6th Cir. 1994). Contract
interpretation is a question of law, also subject to de novo
review. Boyer v. Douglas Components Corp., 986 F.2d 999,
1003 (6th Cir. 1993).
Section 301(a) of the LMRA, 29 U.S.C. § 185(a), gives
jurisdiction to federal courts over claims alleging the breach
of CBAs. See Armistead v. Vernitron Corp., 944 F.2d 1287,
1293 (6th Cir. 1991). A retiree health insurance benefit plan
is a welfare benefit plan under ERISA. Boyer, 986 F.2d at
1005. Welfare benefit plans are not subject to mandatory
vesting requirements under ERISA, unlike pension plans. Id.
at 1004-05. Therefore, there is no statutory right to vested
retiree benefits, and the parties must agree to vest a welfare
benefit plan. See id. at 1005. If the parties intended to vest
benefits and the agreement establishing this is breached, there
is an ERISA violation as well as a LMRA violation. See
Armistead, 944 F.2d at 1298.
The central Sixth Circuit case on CBA interpretation is
UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983). Sixth
Circuit caselaw interpreting CBAs regularly quotes Yard-Man
at length:
[W]hether retiree insurance benefits continue beyond the
expiration of the collective bargaining agreement
depends upon the intent of the parties. Clearly the parties
to a collective bargaining agreement may provide for
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
15
continuing insurance benefits for retirees were intended.
Benefits for retirees are only permissive not mandatory
subjects of collective bargaining. As such, it is unlikely
that such benefits, which are typically understood as a
form of delayed compensation or reward for past
services, would be left to the contingencies of future
negotiations.
Id. at 1481-82 (internal citations and footnotes omitted).
Joy claims that the CBAs at issue here are not ambiguous,
and that they establish that retiree benefits were not intended
to extend beyond the end of the relevant CBA term. Joy’s
main argument is that Sprague, supra, implicitly overruled
Yard-Man and established new, more stringent standards as
to what language must be found in the parties’ agreements in
order to find vested benefits. Joy claims that, under Sprague,
express vesting language is required before retirement
benefits will vest.
Joy’s argument has been rejected by this court. In BVR
Liquidating, supra, we indicated that Yard-Man is still good
law and should be used by courts interpreting CBAs. See
BVR Liquidating, 190 F.3d at 772-73. We pointed out that
Sprague dealt with an employer that had unilaterally instituted
a retiree benefit program, so that the employer had to be
found to have clearly intended to vest benefits in order for
employees to be entitled to lifetime benefits. See id. at 773.
The BVR Liquidating court distinguished that situation from
the case in front of it, which concerned a CBA. Id. at 772-73.
In interpreting a CBA, the intent of both parties to the
agreement must be discerned, making Sprague inapposite.
The court also distinguished Sprague because it involved an
explicit reservation of rights clause permitting the employer
to amend or terminate benefits. Id. at 773. BVR Liquidating
reiterated Yard-Man’s directive that there is an inference that
retirement benefits were intended to vest. Id. The present
case involves a CBA, rather than a benefit plan unilaterally
bestowed by the employer. Therefore, Joy’s arguments based

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14 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
turned to other provisions of the CBA to determine the
parties’ intent:
[T]ermination of insurance benefits for active
employees was explicitly and clearly set out and yet
under conditions – the layoff of seniority employees –
typically inapplicable to retirees. Moreover, there are
variations in the duration of insurance benefits available
to active employees dependent upon their seniority.
These variations and the impracticality of hinging retiree
benefits to events as unpredictable and unstable as active
worker layoffs make it improbable that retiree benefits
were intended to depend in duration upon the fortunes of
the active employees.
. . .
[T]he retiree insurance provisions . . . contain a
promise that the company will pay an early retiree’s
insurance upon such retiree reaching age 65 but that the
retiree must bear the cost of company insurance until that
time. Since an employee is entitled under the collective
bargaining agreement to retire at 55, the company’s
promise could remain outstanding for a ten-year period.
If retiree insurance benefits were terminated at the end of
the collective bargaining agreement’s three-year term,
this promise is completely illusory for many early retirees
under age 62.
[T]he inclusion of specific durational limitations in
other provisions of the current collective bargaining
agreement suggests that retiree benefits, not so
specifically limited, were intended to survive the
expiration of successive agreements in the parties’
contemplated long term relationship.
. . .
Finally, examination of the context in which these
benefits arose demonstrates the likelihood that
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
11
rights which will survive termination of their collective
bargaining relationship. The parties may, for example,
provide retiree insurance benefits which survive the
expiration of the collective bargaining agreement. Any
such surviving benefit must necessarily find its genesis
in the collective bargaining agreement.
The enforcement and interpretation of collective
bargaining agreements under § 301 [of the LMRA] is
governed by substantive federal law. However,
traditional rules for contractual interpretation are applied
as long as their application is consistent with federal
labor policies.
Many of the basic principles of contractual
interpretation are fully appropriate for discerning the
parties’ intent in collective bargaining agreements. For
example, the court should first look to the explicit
language of the collective bargaining agreement for clear
manifestations of intent. The intended meaning of even
the most explicit language can, of course, only be
understood in light of the context which gave rise to its
inclusion. The court should also interpret each provision
in question as part of the integrated whole. If possible,
each provision should be construed consistently with the
entire document and the relative positions and purposes
of the parties. As in all contracts, the collective
bargaining agreement’s terms must be construed so as to
render none nugatory and avoid illusory promises.
Where ambiguities exist, the court may look to other
words and phrases in the collective bargaining agreement
for guidance. Variations in language used in other
durational provisions of the agreement may, for example,
provide inferences of intent useful in clarifying a
provision whose intended duration is ambiguous.
Finally, the court should review the interpretation
ultimately derived from its examination of the language,
context and other indicia of intent for consistency with
federal labor policy. This is not to say that the collective

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12 Maurer, et al. v. Joy
Technologies, Inc.
Nos. 98-3964/4029
bargaining agreement should be construed to
affirmatively promote any particular policy but rather that
the interpretation rendered not denigrate or contradict
basic principles of federal labor law.
Id. at 1479-80 (citations omitted). Courts can find that rights
have vested under a CBA even if the intent to vest has not
been explicitly set out in the agreement. See Golden v.
Kelsey-Hayes Co., 73 F.3d 648, 655 (6th Cir. 1996). CBAs
may contain implied terms, and the parties’ practice, usage,
and custom can be considered. Consolidated Rail Corp. v.
Railway Labor Executives’ Ass’n, 491 U.S. 299, 311 (1989).
Retiree benefits are “in a sense ‘status’ benefits which, as
such, carry with them an inference . . . that the parties likely
intended those benefits to continue as long as the beneficiary
remains a retiree.” UAW v. BVR Liquidating, Inc., 190 F.3d
768, 772 (6th Cir. 1999), cert. denied, No. 1548, 2000 WL
156923 (U.S. Apr. 17, 2000) (quoting Yard-Man, 716 F.2d at
1482). This is because “[b]enefits for retirees are only
permissive not mandatory subjects of collective bargaining.
As such, it is unlikely that such benefits, which are typically
understood as a form of delayed compensation or reward for
past services, would be left to the contingencies of future
negotiations.” Yard-Man, 716 F.2d at 1482 (citations
omitted). Although there is an inference that the parties to a
CBA intended for retiree benefits to vest, the burden of proof
does not shift to the employer, and it is not required that
specific anti-vesting language be used before a court can find
that the parties did not intend benefits to vest. BVR
Liquidating, 190 F.3d at 772 (quoting Golden, 73 F.3d at
656).
In BVR Liquidating, the plaintiff union filed suit against an
employer that had terminated retiree health care benefits. The
plaintiff argued that the benefits had vested, while the
employer argued that the benefits were limited to the duration
of the CBA. Id. at 769. The court found that a clause
providing that retirees shall have health care benefits
Nos. 98-3964/4029 Maurer, et al. v. Joy
Technologies, Inc.
13
“continued for themselves, their spouses, surviving spouses
and eligible dependents,” considered in conjunction with a
clause indicating benefits continued after retirement until
death, could be interpreted as vesting lifetime health care
benefits. Id. at 773. The court speculated: “[i]ndeed, to what
other date than the death of the retiree or the spouse could the
word ‘continue’ apply?” Id. Noting that Yard-Man requires
the agreement to be read as a whole, the court next considered
the meaning of a separate clause in the agreement stating that
“benefits will be provided . . . for the term of this Agreement
except where the Plan specifically provides otherwise.” Id. at
774. The court found that reading these two provisions
together made the CBA ambiguous as to whether retiree
benefits were intended to vest. See id. at 774. In light of this
ambiguity, the court turned to extrinsic evidence. It found
that affidavits from the plaintiff stating that there had been no
discussion of altering the duration of the benefits during
negotiating sessions and in conversations between company
agents and retirees, along with evidence that changes from
prior CBAs increased benefits, led to the conclusion that the
benefits were indeed vested. Id. at 774-75.
Yard-Man also presented this court with the question of
whether retirement benefits created in a CBA vested or were
terminable at the end of the CBA term. The key provision in
the CBA at issue stated that “[w]hen the former employee has
attained the age of 65 years then: (1) The Company will
provide insurance benefits equal to the active group benefits
. . . for the former employee and his spouse.” Yard-Man, 716
F.2d at 1480 (omission in original). The insurance plan
provision applicable to active group benefits specified that the
benefits would terminate one month after an employee’s
layoff. Id. The court found the intent of the parties to be
ambiguous because the “language ‘will provide insurance
benefits equal to the active group’ could reasonably be
construed, if read in isolation, as either solely a reference to
the nature of retiree benefits or as an incorporation of some
durational limitation as well.” Id. As a result, the court

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