The Sixth Circuit recently reversed an injunction that required Caterpillar to pay lifetime health care costs to a subclass of 275 former employees upon finding the subclass members’ ERISA claims were time-barred. Winnett v. Caterpillar, Inc., No. 06-00235 (6th Cir. 6/22/2010). The plaintiffs filed their lawsuit on March 28, 2006 and claimed Caterpillar breached a 1988 CBA provision which committed to provide “free, unalterable, lifetime healthcare benefits for retirees.” However, a subsequent 1998 CBA and corresponding summary plan documents altered the healthcare benefits available to retirees and announced new costs for obtaining them. The court found that the plaintiffs’ cause of action accrued when they knew of Caterpillar’s change in benefits – which occurred in 1998 when Caterpillar announced the changes – and not when they felt its effects as the plaintiffs alleged. Thus, the Court held the plaintiffs filed their claim too late under the applicable 6-year statute of limitations.
The bottom line: This case is an important victory for employers in that an ERISA statute of limitations defense can be successfully raised without obtaining onerous evidence as to when each employee or retiree felt the affects of a change in benefits.