(See Pls.' Br., filing 176, at 18-19 (citing, inter alia, Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 109-15 (1989)).) The issue raised by the defendants' claim, however, does not relate to the Windstream Benefits Committee's discretionary authority, as plan administrator, to determine eligibility for benefits or to construe the terms of the plan; rather, the issue is "simply one of contract interpretation."Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1990) (quoting Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1516 (8th Cir. 1988)). I am not persuaded that the "abuse of discretion" standard is applicable in this context.
"Whether the employer intended welfare benefits to vest `presents an issue of contractual interpretation,' for which summary judgment is particularly appropriate." In Re Sears Retiree Group Life Ins. Litigation, 90 F. Supp.2d 940, 944 (N.D.Ill. 2000) (quoting Murphy v. Keystone Steel Wire Co., 61 F.3d 560, 564 (7th Cir. 1995)); see Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1990) ("The issue we confront is `simply one of contract interpretation'") (citing Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1516 (8th Cir. 1988)). With this standard at hand, the court addresses the parties' motion.
"Whether the employer intended welfare benefits to vest "presents an issue of contractual interpretation,' for which summary judgment is particularly appropriate." In Re Sears Retiree Group Life Ins. Litigation, 90 F. Supp.2d 940, 944 (N.D. Ill. 2000) (quoting Murphy v. Keystone Steel Wire Co., 61 F.3d 560, 564 (7th Cir. 1995)); see Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1990) ("The issue we confront is "simply one of contract interpretation'") (citing Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1516 (8th Cir. 1988). With this standard at hand, the court addresses the parties' motion.
An employer or plan sponsor may unilaterally modify or terminate welfare benefits, unless it contractually agrees to grant vested benefits. Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1992); Alday v. Container Corp. of America, 906 F.2d 660, 665 (11th Cir. 1990), cert. denied, 498 U.S. 1026 (1991). A plan sponsor who changes the vested benefits granted in a welfare plan may be liable to a beneficiary under the plan.
However, because the vesting of rights in a welfare plan constitutes an extra-ERISA commitment, "courts may not lightly infer the existence of an agreement to vest employee welfare benefits." Gable, 35 F.3d at 855; see John Morrell Co., 37 F.3d at 1304; Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1517 (8th Cir. 1988), cert. denied, 489 U.S. 1051, 109 S.Ct. 1310, 103 L.Ed.2d 579 (1989); Howe v. Varity Corp., 896 F.2d 1107, 1110 (8th Cir. 1990); Wise, 986 F.2d at 938. Importantly, Plaintiffs bear the burden of proving that the ERISA plan at issue contains vested benefits.
The exemption of welfare benefits plans from ERISA's vesting requirements allows the parties to determine the duration of the welfare benefits, and consequently, the issue is one of contract interpretation. Id.; Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1990). Welfare benefit plans may be terminated or modified absent the employer's contractual agreement providing otherwise.
Id. at 983. Great-West disagrees with Plaintiffs' reliance on Jensen, Barker I, and Barker II. Great-West claims the Plan language is unambiguous and relies primarily upon our decision in Howe v. Varity Corp., 896 F.2d 1107 (8th Cir. 1990) ( Howe I) as an example of similar unambiguous language in a plan's reservation-of-rights clause. Great-West goes on to argue that even if the panel finds ambiguity in this Plan's language, questions of material fact remain as to the sufficiency of Plaintiffs' extrinsic evidence concerning the company's alleged intent to vest.
See 29 U.S.C. ยง 1002(1), 1051(1). An employer may unilaterally modify or terminate health benefits "absent the employer's contractual agreement to the contrary," Howe v. Varity Corp., 896 F.2d 1107, 1109 (8th Cir. 1990), even if some benefits have been paid, see Meester v. IASD Health Servs. Corp., 963 F.2d 194, 197 (8th Cir. 1992). Thus, although ERISA is the governing law, this case turns on whether vested health benefits were contractually conferred in the Master Agreements between Morrell and the Union.
It is fatal to the claim of the Retired Class that, once they had retired from M-F, their right to welfare benefits became vested for life. We so held in Howe v. Varity Corp., 896 F.2d 1107 (8th Cir. 1990) ( Howe I), in which we reversed the District Court's grant of a preliminary injunction in favor of the Retired Class. That holding is the law of the case. It is true that rulings on motions for preliminary injunction are sometimes tentative, in that they may be based on an incomplete factual record, or on a preliminary assessment of the equities of the case, including the likelihood of success on the merits.
Because such an obligation constitutes an extra-ERISA commitment, however, courts may not lightly infer the existence of an agreement to vest employee welfare benefits. See Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1517 (8th Cir. 1988); see also Howe v. Varity Corp., 896 F.2d 1107, 1110 (8th Cir. 1990) (holding that courts may not infer an intent to vest from the "mere fact that employee welfare benefits continue in retirement"); Wise, 986 F.2d at 938 (holding that "silence" as to an employer's right to modify the plan does not "impliedly cede the right to later amend or discontinue coverage"). Rather, in recognition of ERISA's requirement that employee benefit plans be governed by written plan documents filed with the Secretary of Labor, see 29 U.S.C. ยงยง 1102(a)(1) 1024(a)(1), any participant's right to a fixed level of lifetime benefits must be "found in the plan documents and must be stated in clear and express language."