No First Circuit Presumption in Favor of Vesting for Retiree Welfare Benefits

In a case of first impression released Wednesday, the First Circuit disavowed any presumption of vesting for collectively bargained retiree welfare benefits and announced rules of federal labor contract construction applicable to retiree benefit disputes brought under Section 301 of the Labor- Management Relations Act (LMRA). Senior et al v. NStar Electric and Gas Co. et al, No. 05-2015 (1st Cir. May 31, 2006). In Senior's companion case involving non-union retirees, brought under the Employee Retirement Income Security Act (ERISA), the First Circuit recognized that retiree welfare benefits do not vest under ERISA unless an employer affirmatively cedes its right to amend or terminate the benefits, either in a collectively bargained agreement or in an ERISA plan document. Balestracci et al. v. NStar Electric and Gas Co., No. 05-1894 (1st Cir. May 31, 2006).