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Latest News - September 2014

September 10, 2014
UAW's 'Calculated and Deliberate' Failure To Appeal Decision Cost Visteon Retirees, Court Rules

In 2009, auto-parts supplier Visteon filed for bankruptcy. In so doing, Visteon terminated its retiree benefits. Two unions, the IUE and UAW, fought the benefit termination. Both lost at the bankruptcy court. The IUE appealed, the UAW did not.

Due to the IUE’s appeal, the IUE won its appeal and, due to the UAW’s ‘calculated and deliberate’ failure to appeal on behalf of Visteon retirees lost, according to the Court of Appeals for the Third Circuit.

The panel viewed the application of these principles as “relatively straightforward” and summarized it as follows:

The UAW opposed Visteon’s motion to terminate OPEB for its retirees in the Bankruptcy Court and lost. The Bankruptcy Court entered an order which was final and appealable as to this specific issue. If the UAW wanted relief from that order, it had to appeal. It did not. Just as Visteon would have been bound by that order had it lost and not appealed, so is the UAW.

The panel characterized the UAW’s decision not to appeal as one “that the UAW made in a ‘calculated and deliberate’ fashion.”[18] The UAW, the Court explained, cannot now “seek to be the windfall beneficiaries of an appellate reversal procured by other independent parties.”

The UAW offered several arguments to support its appeal. One was that its failure to appeal should not bind its retirees because it was never appointed to represent such former employees. “According to the UAW, because retirees are not employees that are current members of the UAW’s bargaining unit, [and thus] the UAW could only represent them after it was appointed to represent them through the process of § 1114.” The Court rejected this, asserting that it was contrary to the UAW’s course of conduct in the litigation. [Emphasis added.]

By neglecting to follow-through with its fight for Visteon retirees, the UAW has seemingly dahsed the Visteon retirees’ hopes of recouping their retiree benefits.




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