How lengthy is your CBA required to pay retirees’ medical health insurance protection? | Bond Schoeneck & King PLLC


If you’re a New York state community employer and you’re having trouble figuring out the answer to this question, you are not alone. In the absence of an explicit language in your collective agreement, it is difficult to find a definitive answer. So elusive that the second circle appeals court turned to the New York appeals court for advice. Regardless of the response the appellate court may return, the value of a carefully negotiated and precisely crafted collective agreement cannot be overstated.

In Donohue versus Cuomo1, New York State lowered the percentage of its contribution to retirees’ health insurance premiums. In response, the CSEA and various retired government officials said that previous collective agreements required the state to pay a fixed percentage of pensioners’ health insurance premiums and that paying a reduced percentage was a violation. Although the CBAs in question “did not explicitly provide for a vested right to cover at fixed contribution rates,” that is, they did not specify the length of the state’s obligation, plaintiffs argued that such vested rights were created through inference or through judicial resolution of the otherwise ambiguous language .

In examining these arguments, the Second Circle found that two recent Supreme Court decisions2 on the interpretation of private sector agreements with regard to the exercise of health insurance benefits for retirees rejected negative conclusions. The Second Circuit found, however, that the New York Court of Appeals did not investigate the impact, if any, of these private sector precedents “on the circumstances under which New York law vested health benefits for retirees under public sector CBAs acknowledges “.

The second circuit also dealt with the current state of New York law, starting with the decision of the appeals court in Kolbe in 2015 against Tibbetts3. In the Kolbe case, the Court of Justice ruled that, despite the lack of any express language for durability, the contract language submitted to it clearly established a vested right to pensioners insurance up to the age of 70. However, the court declined to “rule on whether New York applies an inference to the non-forfeiture of health insurance rights for retirees”. According to Second Circuit, Kolbe is “at least in suspense [subsequently decided] Supreme Court precedents. ”

The Second Circuit then discussed the Kolbe division of the New York Authority, particularly the Village of Old Brookville-Village of Muttontown4 conflict in which the Second Department used the Supreme Court’s reasoning in Tackett to support the conclusion that “if a The contract does not contain any information on the duration of benefits for pensioners. A court may not be able to conclude that the parties intended to transfer these benefits for life. “And Evans v Deposit Central School District5, where the Third Division was considering external evidence to resolve an” ambiguity about the text “in favor of a vested right. “

Given the unclear status of New York law, the Second Circuit has asked the New York Supreme Court to answer the following question: “Under what circumstances does New York law allow inferences of vested benefits after retirement under a state CBA despite the In the absence of an explicit specification that these benefits will extend beyond the term of the CBA? “

Given the current uncertainty and significant financial implications of resolving this issue, Bond labor attorneys will pursue this critical litigation for you and report back to you using any guidance provided by the appeals court.

1 2020 US App. LEXIS 35111 (2d Cir. November 6, 2020).
2 See M&G Polymers USA, LLC v Tackett, 574 US 427 (2015) (opposition to Yard-Man’s conclusions); CNH Industrial NV v Reese, 138 S. Ct. 761 (2018) (noting that if an agreement is silent about the exercise, the conclusion should be that “it does not exercise lifelong benefits”).
3 22 NY3d 344 (2013).
4 179 AD3d 972 (2d Dep’t 2020).
5 183 AD3d 1081 (3d Dep’t 2020).

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