Boeing Change to Retiree Health Benefits Gets Court Approval

A court ruled that Boeing Co. did not violate the Employee Retirement Income Security Act (ERISA) or the Labor Management Relations Act (LMRA) when it presented changes to retirees' health benefits in a 2006 collective bargaining agreement (CBA).

The U.S. District Court for the Northern District of Illinois has rejected the United Auto Workers’ argument that benefits as set out in previous CBAs were vested and could not be changed. According to the opinion, previous CBAs stated the benefits would be provided “for the duration of the Agreement.”

Union officials said there was no language in the agreements because there had always been an understanding between the union and the company that the benefits would be provided to retirees and their beneficiaries for life.

In addition, the court found there was nothing in the CBAs that restricted Boeing’s right to make changes to its retiree health benefits, and that since the CBAs required that Boeing provide the retirees with the same coverage as that provided to active employees, Boeing could make changes to retiree benefits that put them in line with those of active employees without violating the CBAs.

The CBAs at issue in the case covered employees and retirees of Boeing Rotorcraft. The 2006 CBA made changes to medical plan options, and increased deductibles, copayments, and benefit payment levels. It also froze the amount of Medicare Part B premium reimbursement provided per month for eligible retirees and dependents.

The opinion in Boeing Co. v. March is here.