WASHINGTON, D.C., January 28, 2015 – A Morgan Lewis team scored a major victory for employers on Monday, January 26, when the U.S. Supreme Court, ruling in M&G Polymers v. Tackett, unanimously rejected a decades-old precedent involving vesting of retiree healthcare benefits.
The decision, written by Justice Clarence Thomas, remanded the case back to the U.S. Court of Appeals for the Sixth Circuit after rejecting that circuit’s 1983 “Yard-Man presumption” that favored retirees in cases involving the interpretation of collective bargaining agreements and the duration of retiree health benefits. Justice Thomas wrote that “when a contract is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life.”
Speaking on behalf of the Morgan Lewis team, Dallas-based litigator Allyson Ho said, “We’re very pleased the Supreme Court unanimously rejected the Sixth Circuit’s Yard-Man presumption and all of its various corollaries in no uncertain terms. The Supreme Court’s decision sends a strong message that restores a level playing field in benefits litigation nationwide.”
Ms. Ho is the co-head of the firm’s appellate litigation practice. Joining Ms. Ho on the interdisciplinary team of Morgan Lewis attorneys representing M&G Polymers in this appeal and the lower court proceedings leading to the appeal were partner Randall Tracht, a member of the firm’s Employee Benefits and Executive Compensation practice in Pittsburgh, and senior counsel Christopher A. Weals, a member of the firm’s ERISA litigation practice in Washington.