The U.S. Supreme Court has emphatically reaffirmed the requirement that collective bargaining agreements must be interpreted according to “ordinary principles of contract law” when deciding whether retired employees are entitled to health care benefits, according to a post by Foster Swift Collins & Smith PC.

Richard C. Kraus and Mindi M. Johnson discuss CNH Industrial N.V. v. Reese. 

“The case involved a dispute over union retiree health benefits. In 1998, CNH entered into a CBA which provided group health care benefits to certain employees set to retire under the company’s pension plan. After the CBA expired, a class of CNH retirees and surviving spouses initiated a lawsuit in federal court asking for declaratory judgment that they were entitled to health care benefits for life and seeking to enjoin CNH from modifying those benefits.”

Read the article.

The Washington Post reports that the U.S. Court of Appeals for the Fourth Circuit ruled that Just Born Quality Confections, the firm that makes the candy known as Peeps, could not unilaterally stop enrolling new employees in a pension without paying a penalty, something it had tried to do since 2015.

Reporter Damien Paletta explains possible consequences: “The appeals court decision could have a major effect on hundreds of other companies that are trying to determine whether to continue making payments to their own multi-employer pension plans. A number of multi-employer plans have weak balance sheets, exacerbated by a wave of aging workers and new retirees. This dynamic has forced some firms to pay higher premiums to their pensions in an effort to boost solvency.”

The case arose when Just Born announced three years ago that it would no longer enroll new employees in the multi-employer pension it had participated in for decades and would instead divert money into a 401(k) plan for those workers.

Read the Post article.

Practical Law will present a free 75-minute webinar in which Mark A. Bodron, Baker Botts LLP, Gia G. Norris, Practical Law, Elizabeth A. Gilman, K&L Gates and Judy Hensley, Roberts & Holland, will provide a practical roadmap for counsel to employers on best practices for advising clients on pension and welfare plan overpayments.

The event will be Tuesday, Dec. 6, at 1 p.m. Eastern time. See the registration page for CLE status.

Participants of this program will:

• Review common scenarios in which pension and welfare plan overpayments arise.
• Gain an understanding of the legal framework and correction procedures governing pension plan overpayments, including potentially thorny tax issues that impact your employees.
• Learn practical strategies to protect your clients from the most recent wave of litigation in the self-funded group health plan context.

A brief Q&A session will follow.

Presenters:

Mark A. Bodron, Partner, Baker Botts LLP
Mark Bodron is a partner in the Houston office of Baker Botts. His practice concentrates on the areas of employee benefits and executive compensation. Bodron advises clients on all aspects of qualified retirement plans, including 401(k) plans, ESOPs and cash balance plans, nonqualified plans, stock-based plans and deferred compensation and other executive compensation arrangements, including issues related to Section 409A deferred compensation rules and Section 162(m) performance-based compensation. Bodron’s practice also includes advising clients on health and welfare plan matters, including compliance and reporting issues related to the Affordable Care Act, COBRA and HIPAA. He frequently advises clients on ERISA fiduciary and prohibited transaction matters and represents clients before the IRS, DOL and PBGC on matters related to employee benefits.

Gia G. Norris, Senior Legal Editor, Practical Law Employee Benefits & Executive Compensation
Norris joined Practical Law from Roberts & Holland LLP, where she was a senior employee benefits and executive compensation associate. Previously she was an employee benefits and executive compensation associate at both White & Case LLP and Proskauer Rose LLP. Norris is the Website & Technology Chair of the Employee Benefits Committee of the America Bar Association’s Section of Taxation. She is also a member of the Employee Benefits Committee of the Tax Section of the New York State Bar Association.

Norris received her Juris Doctorate from the University of Pennsylvania Law School and her Bachelor of Arts from Johns Hopkins University in Political Science and Women’s Studies.

Elizabeth A. Gilman, Associate, K&L Gates LLP
Elizabeth Gilman is a litigation associate in the firm’s Houston office. She focuses her practice on commercial disputes and is uniquely qualified in disputes involving the energy sector, especially oil and gas. Her technical education and experience enhances the value of her representation and counsel. She earned her undergraduate degree from Purdue University, majoring in industrial management with an emphasis in manufacturing. Gilman excels in her ability to work with clients and experts in complex fields. Gilman has experience in all phases of the dispute process which allows her to provide comprehensive representation for her clients. She has experience in early dispute management, litigation and arbitration through the appellate process and collection. She has tried cases both in front of a jury and an arbitrator. On behalf of her clients, she brings a high level of experience in energy litigation, and both on-shore and off-shore construction disputes. Gilman’s experience in contract negotiation and drafting further contributes to the value of her representation to her clients. Her experience spans many forums, including mediation, state and federal court, and domestic and international arbitration.

Judy Hensley, Associate, Roberts & Holland LLP
Judy M. Hensley concentrates on a wide variety of employee benefits and executive compensation matters in both the transactional and compliance contexts. She advises on tax, ERISA and other legal considerations relating to employee benefit plans, programs and arrangements, including design, administration and compliance of tax-qualified plans. She has advised clients on ERISA fiduciary matters for investment funds and plan fiduciaries. Her experience includes the structuring and design of equity compensation arrangements, including stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock, performance shares and LLC/partnership interests (including profits interests) and nonqualified deferred compensation plans, as well as executive employment, severance and change-in-control agreements. She also has advised clients on compensation and benefits issues unique to bankruptcy and restructuring transactions.

Register for the webinar.