Appeals court rules Honeywell workers have lifetime benefits for pre-1997 retirees

Several hundred retired UAW workers from the Stratford Army Engine Plant in Stratford, CT won a major victory in a decision issued by the US Second Circuit Court of Appeals in a ruling against Honeywell, Inc.

The appeals court decision upheld injunctions issued by District Court Judge Vanessa Bryant in Kelly vs Honeywell that prevented the company from unilaterally terminating UAW negotiated medical insurance it agreed to provide for life to all future retirees and surviving spouses.

In that ruling, the District Court ruled by summary judgment for anyone who retired under the effects bargaining agreement that promised benefits “for the life of the retiree or surviving spouse.”  In addition, the plaintiffs also won a preliminary injunction on behalf of those who retired after June 1997.  That portion of the case was to go to trial.  The company challenged the decision to the Second Circuit Court of Appeals.

The company agreed to these provisions in contract negotiations with the UAW when AlliedSignal acquired the business from Textron, Inc.  In 1999 AlliedSignal acquired the Honeywell Corporation and changed its name after it closed the Honeywell corporate offices in St Paul, Minnesota. The Court of Appeals upheld the legally enforceable contract language which it voluntarily agreed to in 1994 negotiations with Locals 1010 and 376 of the UAW.

“The second circuit ruled in favor of UAW retirees who worked their entire lives for the collectively bargained right to lifetime benefits – Honeywell tried to take that away and they lost because UAW retirees are tenacious, smart and fought every step of the way,” said Beverley Brakeman, Director of Region 9A. “Our retirees would have faced enormous hardship if Honeywell had its way. This decision restores their lifetime benefits and gives those who later retired a chance at trial to restore the benefits they thought they had.”

The UAW represented workers at a Textron army plant in Stratford, CT.  In 1993 Textron sold the plant to Allied Signal.  The UAW negotiated an agreement that covered various benefits if Allied Signal were to close the plant.  As part of the agreement, the Company promised to provide past and future retirees and surviving spouse’s retiree health care benefits for life. Allied Signal continued to operate the plant until 1998 when it closed and moved operations to various non-union plants.  Subsequently, Allied Signal adopted the Honeywell name.  Honeywell continued to provide retiree health care until 2015.

“We are overjoyed by this decision. After three and a half years of fighting to preserve our healthcare, we won.  Without the help of our union and its amazing legal team, we’d be in the same situation that thousands of retirees across the country are in as more and more companies like Honeywell jump on the effort to strip retired American workers of the benefits we worked for and earned,” said David Kelly, President UAW Local 1010. “Today we are relieved but remain disgusted at the corporate greed that is driving this trend,”

The Court of Appeals upheld the lower court decisions in favor of the retirees.  The Court of Appeals agreed that the contract language clearly established lifetime health care benefits for any pre-1997 retirees and ordered a trial on the issue for anyone who retired afterward.  The Company may try to appeal to the Supreme Court.  Otherwise, the case will be remanded back to the district court for trial on the small group of retirees and surviving spouses who retired after June of 1997.  In the meantime, the Company is required to maintain the benefits for all the retirees.

Download the decision, here.