Supreme Court Settles Dispute Over Health Benefits for Union Retirees

February 23, 2018

For the second time in three years, the U.S. Supreme Court instructed lower courts to use ordinary principles of contract interpretation when evaluating whether a “general duration” clause in a bargaining agreement provides for vested health benefits, rather than presuming that those benefits are to be continued.  General duration clauses establish when and whether a contract’s provisions survive the expiration of the contract.  In a unanimous opinion, the Supreme Court ruled that the operative collective bargaining agreement contained a general duration clause that applied to all terms and conditions of employment and contained no provision stating health care benefits were subject to a different duration.  Therefore, the Court held, the parties did not agree to lifetime health benefits.