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March 07, 2022

The vesting of retiree health insurance rights

In Danny Donohue, et al., Appellants, v Andrew M. Cuomo, et al., Respondents, et al., Defendants, New York State's Court of Appeals said that "In Kolbe v Tibbetts, [it] left open whether a New York court should infer vesting of retiree health insurance rights when construing a collective bargaining agreement (CBA) (see 22 NY3d 344, 354 [2013] *). The Supreme Court [of the United States] subsequently rejected such inferences as incompatible with ordinary contract principles under federal law in M and G Polymers USA, LLC v Tackett (574 US 427 [2015]) and CNH Industrial N.V. v Reese (583 US 138 S Ct 761 [2018]), repudiating International Union, United Auto., Aerospace, and Agric. Implement Workers of Am. (UAW) v Yard-Man, Inc. (716 F2d 1476 [6th Cir 1983], cert denied 465 US 1007 [1984]) and its progeny. In response to questions certified to [it] by the United States Court of Appeals for the Second Circuit, [the New York State Court of Appeals concluded] that Yard-Man-type inferences favoring such vesting are likewise inconsistent with New York's established contract interpretation principles."

* Subdivision 6 of Civil Service Law §209-a provides as follows: "In applying [209-a, Improper employer practices; improper employee organization practices], fundamental distinctions between private and public employment shall be recognized, and no body of federal or state law applicable wholly or in part to private employment, shall be regarded as binding or controlling precedent.

The Donohue decision is posted on the Internet at https://www.nycourts.gov/reporter/3dseries/2022/2022_00910.htm.

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