The Court found that Caterpillar and the UAW entered an agreement extending the 1988 Central Labor Agreement to the CLS employees in return for a no-strike clause. When a labor dispute arose in 1991, the CLS employees continued to work, honoring the no-strike clause. The Court found that the extension of the Agreement provided for the 1988 Central Labor Agreement to remain in full force and effect. CLS employees who retired before the labor dispute ended had their retiree healthcare benefits vest under the 1988 agreement, which provided premium-free retiree healthcare.
In so ruling, the Court rejected Caterpillar's argument that the CLS retirees were automatically subject to conditions it unilaterally implemented during the labor dispute and in subsequent Central Labor Agreements, which imposed a cap on retiree medical benefits. In sum, the Court found that the subclass was likely to prevail on the merits of its claim because subclass members have a vested contractual right to retiree healthcare benefits based on the Caterpillar Logistics Services Agreement's extension of the 1988 labor agreement.
The plaintiffs and class are represented locally by Lieff, Cabraser, Heimann & Bernstein, LLP, in Nashville, AARP Foundation Litigation in Washington and the firm of Meites, Mulder, Mollica & Glink in Washington.
Caterpillar is represented by Columbus Gangemi, Jr., Joseph Torres, and Derek Barella of Winston & Strawn, 35 W. Wacker Drive, Chicago, IL 60601.
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