Stone v. Signode Industrial Group LLC, No. 19-1601 (7th Cir. 2019)

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Justia Opinion Summary

Signode assumed an obligation to pay health-care benefits to a group of retired steelworkers and their families. Signode then exercised its right to terminate the underlying benefits agreement and also stopped providing the promised benefits to the retired steelworkers and their families, despite contractual language providing that benefits would not be “terminated … notwithstanding the expiration” of the underlying agreement. The retirees and the union filed suit under the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(1)(B). The Seventh Circuit affirmed the district court’s entry of a permanent injunction, ordering Signode to reinstate the benefits. The agreement provided for vested benefits that would survive the agreement’s termination. While there is no longer a presumption in favor of lifetime vesting, the court applied ordinary contract law interpretation rules and concluded that the agreement unambiguously provided retirees with vested lifetime health-care benefits. Even if the agreement were ambiguous, industry usage and the behavior of the parties here provide enough evidence to support vesting such that resolution of any ambiguity in favor of the plaintiffs as a matter of law would still be correct.

This opinion or order relates to an opinion or order originally issued on September 19, 2019.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 19-1601 HAROLD STONE, et al., Plaintiffs-Appellees, v. SIGNODE INDUSTRIAL GROUP LLC and ILLINOIS TOOL WORKS INC., Defendants-Appellants. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:17-cv-05360 — Thomas M. Durkin, Judge. ____________________ ARGUED SEPTEMBER 19, 2019 — DECIDED NOVEMBER 20, 2019 ____________________ Before SYKES, HAMILTON, and BRENNAN, Circuit Judges. HAMILTON, Circuit Judge. Defendant Signode Industrial Group LLC assumed an obligation to pay health-care bene ts to a group of retired steelworkers and their families. Signode then exercised its right to terminate the underlying bene ts agreement. When it terminated the agreement, Signode also stopped providing the promised bene ts to the retired steelworkers and their families, despite contractual language 2 No. 19-1601 providing that bene ts would not be “terminated … notwithstanding the expiration” of the underlying agreement. This appeal presents a single question of contract interpretation: whether the agreement in question provided for vested bene ts that would survive the agreement’s termination. We hold that the contract provided for vested lifetime bene ts and af rm the district court’s permanent injunction ordering Signode to reinstate the retirees’ bene ts. I. Factual and Procedural Background The key language relevant to this dispute comes from a 1994 agreement and its 2002 successor. First, we describe the two agreements and their contexts, focusing on the disputed “Continuation of Coverage” and “Term of this Agreement” provisions. We then describe the events that followed the execution of the 2002 agreement and led to this lawsuit. A. The Riverdale Plant and the Pensioners’ Agreements Plainti s Harold Stone and John Woestman worked for decades at the Acme Packaging Corporation plant in Riverdale, Illinois. While they worked at the Riverdale plant, they were represented by the union-plainti —United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFLCIO-CLC. On January 1, 1994, Acme and the union entered into a “Pensioners’ and Surviving Spouses’ Health Insurance Agreement.” The 1994 Pensioners’ Agreement provided health insurance bene ts to retirees with at least fteen years of continuous service and to their families. The Agreement’s “Continuation of Coverage” provision said: No. 19-1601 3 Any Pensioner or individual receiving a Surviving Spouse’s bene t who shall become covered by the Program established by this Agreement shall not have such coverage terminated or reduced (except as provided in this Program) so long as the individual remains retired from the Company or receives a Surviving Spouse’s bene t, notwithstanding the expiration of this Agreement, except as the Company and the Union may agree otherwise. The next provision was titled “Term of this Agreement.” It read: “This Agreement shall become e ective as of January 1, 1994 and shall remain in e ect until December 31, 1999 and thereafter subject to the right of either party on 120 days written notice served on or after September 1, 1999 to terminate this Agreement.” The 1994 Pensioners’ Agreement remained in e ect until 2002, when Acme Packaging was going through bankruptcy. Acme negotiated a settlement agreement with the union to ease some of its nancial obligations. As a part of the settlement, Acme and the union replaced the 1994 Pensioners’ Agreement with a nearly identical successor called the 2002 Pensioners’ Agreement. It left the Coverage Provision intact and modi ed the Term Provision only to move the earliest termination date back to February 29, 2004, providing that the agreement “shall remain in e ect until February 29, 2004, thereafter subject to the right of either party on one hundred and twenty (120) days written notice served on or after November 1, 2003 to terminate the ‘Pensioners’ and Surviving Spouses’ Health Insurance Agreement.’” The 2002 Pensioners’ Agreement and the larger settlement of which it was a part 4 No. 19-1601 were approved by the bankruptcy court in February 2002, and Acme Packaging emerged from bankruptcy in November 2002. In October 2003, defendant-appellant Illinois Tool Works (ITW) acquired the Riverdale plant from Acme and assumed its obligations under the 2002 Pensioners’ Agreement. In April 2004, ITW decided to close the plant permanently and entered into an agreement with the union establishing the terms of the closure. Operations ceased completely in August 2004. For over a decade after the plant closed, ITW continued to administer the health insurance program pursuant to the 2002 Agreement, providing health-care coverage for Stone, Woestman, other Riverdale retirees, and their families. B. This Lawsuit In 2014, ITW created a new entity, Signode Industrial Group LLC, and transferred its obligations under the 2002 Pensioners’ Agreement to Signode. It then sold Signode to The Carlyle Group L.P. Signode continued to provide bene ts under the Agreement until August 2015, when it noti ed the union that “e ective January 1, 2016, the [health-care program] and the Agreement will terminate and participants will no longer be eligible for bene ts thereunder.” It noti ed the bene ciaries the next day. The union protested Signode’s unilateral termination of bene ts, citing the “notwithstanding expiration” language of the 2002 Agreement. Signode went ahead and discontinued the pensioners’ health-care plan. It has not provided Riverdale retirees or their families with bene ts since the end of 2015. Plainti s Stone and Woestman led this suit on behalf of a proposed class of similarly situated Riverdale retirees, their No. 19-1601 5 dependents, and surviving spouses entitled to health-care bene ts under the 2002 Agreement. They alleged that ITW and Signode had breached the 2002 Agreement in violation of both § 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, and § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a)(1)(B). The union sued for breach of the 2002 Agreement under § 301 of the LMRA. Both sides moved for summary judgment. The district court granted plainti s’ motion and denied defendants’ motion, holding that the 2002 Agreement did not give Signode the right to terminate the bene ts. The district court entered a permanent injunction ordering Signode to reinstate healthcare bene ts under the 2002 Agreement. The district court has not yet acted on the issue of class certi cation or entered a nal judgment, but we have jurisdiction over the defendants’ appeal of the injunction under 28 U.S.C. § 1292(a). A motions panel of this court stayed the injunction pending appeal. After full brie ng and argument on September 19, 2019, this panel vacated the stays. 1 II. Analysis The only question before us is whether the health-care bene ts provided by the 2002 Pensioners’ Agreement survived the termination of that agreement. We review a district court’s grant of a permanent injunction for abuse of discretion. Minnesota Mining & Manufacturing Co. v. Pribyl, 259 F.3d 587, 597 (7th Cir. 2001). However, legal conclusions underlying the grant of a permanent injunction, including issues of 1 On November 1, 2019, the district court ordered defendants to restore the health-care benefits no later than January 1, 2020. 6 No. 19-1601 contract interpretation, are reviewed de novo. Id.; Soarus L.L.C. v. Bolson Materials International Corp., 905 F.3d 1009, 1011 (7th Cir. 2018). 2 A. Principles of Interpretation ERISA does not require that retiree health-care bene ts be vested. Vesting of health-care bene ts is determined according to ordinary principles of contract law. M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015); see also Barnett v. Ameren Corp., 436 F.3d 830, 832 (7th Cir. 2006), quoting Pabst Brewing Co. v. Corrao, 161 F.3d 434, 439 (7th Cir. 1998) (“[I]f [bene ts] vest at all, they do so under the terms of a particular contract.”). Tackett and its successor, CNH Industrial N.V. v. Reese, 138 S. Ct. 761 (2018), endorsed the application of ordinary principles of contract law in such cases, and they rejected the “Yard-Man” presumptions in favor of vesting that the Sixth Circuit established in International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America v. Yard–Man, Inc., 716 F.2d 1476 (6th Cir. 1983), and developed in subsequent cases. In particular, the Supreme Court in Tackett and Reese rejected the presumption of lifetime vesting 2 Because the permanent injunction was based on a legal conclusion in the grant of summary judgment and this appeal challenges that conclusion, we must decide that legal issue in this appeal. See Stone v. Signode Industrial Group, LLC, 365 F. Supp. 3d 957 (N.D. Ill. 2019) (granting summary judgment to plaintiffs). In other words, we have jurisdiction under 28 U.S.C. § 1292(a) to review the relevant legal reasoning of the grant of summary judgment insofar as it is necessary to review the permanent injunction even though we do not have jurisdiction over the grant of summary judgment itself. Cf. Cross Medical Products, Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1301 (Fed. Cir. 2005) (asserting jurisdiction over the grant of summary judgment itself under similar circumstances); LaVine v. Blaine School Dist., 257 F.3d 981, 987 (9th Cir. 2001) (same). No. 19-1601 7 where “a contract is silent as to the duration of retiree bene ts.” Tackett, 135 S. Ct. at 937; Reese, 138 S. Ct. at 763. The Supreme Court emphasized that “contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement.” Tackett, 135 S. Ct. at 937, quoting Litton Financial Printing Div., Litton Business Systems, Inc. v. NLRB, 501 U.S. 190, 207 (1991). Tackett and Reese are consistent with the approach we have taken for decades. See, e.g., Cherry v. Auburn Gear, Inc., 441 F.3d 476, 481 (7th Cir. 2006), citing Bidlack v. Wheelabrator Corp., 993 F.2d 603, 606–07 (7th Cir. 1993) (en banc), and Pabst, 161 F.3d at 439 (“Unless a contract provides for the vesting of bene ts, the presumption is that bene ts terminate when a collective bargaining agreement ends.”). Employers, employees, and unions are free, however, to provide that health-care bene ts will survive the underlying agreement, so that promised lifetime bene ts will indeed survive for a lifetime. Tackett and Reese teach that courts may not infer vesting from silence but also indicate that courts should nd vesting where the contract provides for it: “a collectivebargaining agreement [may] provid[e] in explicit terms that certain bene ts continue after the agreement’s expiration.” Tackett, 135 S. Ct. at 937, quoting Litton, 501 U.S. at 207 (alterations in Tackett). The contract may also provide for vesting through implied terms: “‘[C]onstraints upon the employer after the expiration date of a collective-bargaining agreement’ … may be derived from the agreement’s ‘explicit terms,’ but they ‘may arise as well from ... implied terms of the expired agreement.’” Id. at 938 (Ginsburg, J., concurring), quoting Litton, 501 U.S. at 203, 207; accord, Reese, 138 S. Ct. at 765 (observing that a court may look to “explicit terms, implied terms, or industry practice” for indications of vesting). And if 8 No. 19-1601 the contract is ambiguous—due to either a patent or latent ambiguity—extrinsic evidence may be considered in determining whether the parties intended bene ts to vest. Reese, 138 S. Ct. at 765; see also Rossetto v. Pabst Brewing Co., 217 F.3d 539, 545–46 (7th Cir. 2000) (looking to similar agreements with same employer and identical agreements within industry to nd latent ambiguity on duration of health-care bene ts). B. Interpretation of the 2002 Pensioners’ Agreement The 2002 Pensioners’ Agreement unambiguously provided retirees with vested lifetime health-care bene ts. The Coverage Provision said as plainly as possible that coverage would survive expiration of the Agreement. Contrary to defendants’ arguments, the Term Provision did not transform the right to terminate the Agreement itself into a loophole that nulli ed the plain promise that bene ts would survive expiration of the Agreement. And even if the Agreement were ambiguous, industry usage and the behavior of the parties here provide enough evidence to support vesting such that resolution of any ambiguity in favor of the plainti s as a matter of law would still be correct. 1. The Vesting Language for Continuation of Coverage The Agreement’s Continuation of Coverage paragraph provided that covered individuals “shall not have such coverage terminated or reduced (except as provided in this Program) … notwithstanding the expiration of this Agreement, except as the Company and the Union may agree otherwise.” (Emphasis added.) This language made clear that the promised health-care bene ts vested, i.e., they would survive the termination of the underlying agreement. In Tackett, the Supreme Court No. 19-1601 9 endorsed this approach: vested bene ts are created when an agreement “provid[es] in explicit terms that certain bene ts continue after the agreement’s expiration.” 135 S. Ct. at 937, quoting Litton, 501 U.S. at 207. That is precisely what the 2002 Pensioners’ Agreement did. If more support were needed, cases addressing similar language provide persuasive support for the plainti s’ position. In United Steelworkers of America, AFL-CIO-CLC v. Connors Steel Co., the Eleventh Circuit held that an identical continuation-of-coverage provision created vested bene ts. 855 F.2d 1499, 1505 (11th Cir. 1988) (“shall not have such coverage terminated or reduced … so long as the individual remains retired from the company or receives a surviving spouse’s bene t, notwithstanding the expiration of this agreement”). Contrary to defendants’ representations in their briefs and at oral argument, the contract in Connors Steel also included a termination provision like the one in the 2002 Pensioners’ Agreement. Id. at 1502 (“Except as otherwise provided below, this Agreement shall terminate [upon] the expiration of sixty days after either party shall give written notice of termination to the other party but in any event shall not terminate earlier than September 1, 1983.”). In Ke er v. H.K. Porter Co., the Fourth Circuit held that materially identical continuation-ofcoverage language also provided vested bene ts. 872 F.2d 60, 63 (4th Cir. 1989). 3 Defendants suggest that the persuasive force of Connors Steel and H.K. Porter Co. is tainted by reliance on the Yard-Man inferences later rejected by the Supreme Court in Tackett and Reese. We disagree; these cases did not depend on Yard-Man. Connors Steel held that the unambiguous language of the agreement provided benefits, explained that this interpretation was consistent with Yard3 10 No. 19-1601 We have described the agreements in Connors Steel and H.K. Porter Co. as “speci cally provid[ing] that the employer was obligated to continue making bene t contributions after the agreement expired,” albeit in the context of di erentiating them from a contract that did not vest bene ts. Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers, Shopmen's Div., Local No. 473 v. SR Industries Corp., 940 F.2d 665 (7th Cir. 1991) (table of decisions without reported opinions), 1991 WL 151901, at *4 (7th Cir. Aug. 9, 1991). 2. The Term Provision To avoid the clear language providing health-care bene ts that survive the expiration of the 2002 Agreement, defendants rely on the Term Provision. But the Term Provision only provides the means of expiration (contemplated in the vesting language of the Coverage Provision) by permitting either party “to terminate the ‘Pensioners’ and Surviving Spouses’ Health Insurance Agreement.’” The Coverage Provision established that the promised health-care coverage and the underlying Agreement would run independently—that the Man, and then clarified that the case for vesting was stronger than in Yard-Man because of the explicit vesting language identical to the language here. 855 F.2d at 1505. H.K. Porter Co. indicated only that the court’s determination—based on “the language in the parties’ agreements” and the conduct of the employer—was consistent with Yard-Man. 872 F.2d at 64. The Fourth Circuit later clarified that “the reference to Yard-Man was not necessary to [the holding in H.K. Porter Co.] that the specific language of the CBA showed the parties intended for benefits to continue beyond the expiration of the agreement.” Dewhurst v. Century Aluminum Co., 649 F.3d 287, 291– 92 (4th Cir. 2011). No. 19-1601 11 duration of the coverage was not limited to the term of the Agreement. Terminating the Agreement while leaving coverage intact was consistent with the vested bene ts established by the Coverage Provision. Indeed, separating the term of coverage from the term of the Agreement clearly signaled that it was possible—actually, expected—that the Agreement could end without a ecting the continued health-care coverage. That is what the Term Provision did. Defendants argue that the term provision provided an exception to the promise that coverage would persist “notwithstanding expiration” of the 2002 Agreement and that their obligation to provide health-care bene ts was extinguished upon termination of the Agreement. This interpretation of the Term Provision con icts with the Coverage Provision and disregards ordinary principles of contract interpretation. Cf. Barnett, 436 F.3d at 833 (“Contractual provisions must be read in a manner that makes them consistent with each other.”). Defendants rely on cases that addressed contracts that included both “lifetime” language and reservation-of-rights clauses expressly allowing alteration or termination of bene ts—but all without what we see here, express statements extending bene ts beyond the term of agreement. See Barnett, 436 F.3d at 834 (agreement explicitly reserved employer’s right to “‘take such action as may be necessary to modify and to continue for the life of the Labor Agreement’ the provisions of the health-care plan”); Vallone v. CNA Financial Corp., 375 F.3d 623, 638 (7th Cir. 2004) (agreement allowed employer “to prospectively alter or amend its welfare bene ts o ered to retirees, even after retirement”); Int'l Union of United Auto., Aerospace & Agric. Implement Workers of Am. v. Rockford Powertrain, Inc., 350 F.3d 698, 703 (7th Cir. 2003) (agreement “reserve[d] the right 12 No. 19-1601 to modify, amend, suspend or terminate [bene ts] at any time”). These cases teach that “lifetime” language that might appear upon rst reading to vest bene ts should not be interpreted to do so if another provision reserves rights that are inconsistent with vesting. This lesson, painfully applied in many cases, does not apply here because the parties to the 2002 Agreement followed the lesson and made clear that the health-care bene ts would survive the termination of that agreement. The Term Provision is not at all inconsistent with vesting. The entire purpose of the “notwithstanding expiration” language is to establish that termination of the Agreement would not extinguish the bene ts it promised. To try to create a con ict in need of resolution, defendants also propose that the Term Provision should be read to create an implicit exception to the vesting rule of the Coverage Provision because the Term Provision would otherwise be super uous. This argument fails on several grounds. First, even if this reading did render the Term Provision practically super uous, this would not be enough to compel a tortured reading of the Coverage Provision that would nullify the parties’ clearly expressed choice to create vested retirement health-care bene ts. The principle that contracts should be interpreted to avoid rendering language super uous or redundant is not absolute. Rather, it is a preference to be employed to the extent possible given the range of reasonable meanings that can be ascribed to the contractual language. See 11 R. Lord, Williston on Contracts § 32:5 (4th ed., July 2019 update) (“An interpretation which gives e ect to all provisions of the contract is preferred to one which renders part of the writing super uous, useless or inexplicable. A No. 19-1601 13 court will interpret a contract in a manner that gives reasonable meaning to all of its provisions, if possible.”); see also GNB Battery Techs., Inc. v. Gould, Inc., 65 F.3d 615, 622 (7th Cir. 1995) (“A contractual interpretation that gives reasonable meaning to all of the terms in an agreement is preferable to an interpretation which gives no e ect to some terms.”). Given the clarity of the vesting language and the coherence of the contractual scheme under the more natural reading of the contract, defendants’ position is not persuasive. Second, the super uity argument at best cuts both ways. If the Term Provision were read to allow the termination of bene ts provided by the Agreement, then it would render super uous the “notwithstanding the expiration of the Agreement” language in the Coverage Provision. What would be the point of establishing that bene ts survive expiration of the Agreement if the only contractual provision for terminating the Agreement also terminated the bene ts? Third, the Term Provision simply is not super uous when read—consistent with the vesting language of the Coverage Provision—to allow only for the termination of the Agreement and not of the bene ts it provides to those already eligible for them. Collective bargaining agreements generally terminate at some point, giving the parties the opportunity to renegotiate. For retirement health-care bene ts, this gives employers and employees the opportunity to change the scope of bene ts for future retirees. As a general rule, an agreement like this one covers only those who retire while it is still in e ect. If ITW had not closed the plant in 2004, it might have decided to scale back retirement bene ts promised in the 2002 Pensioners’ Agreement and exercised its termination right to 14 No. 19-1601 force the negotiation of a new Pensioners’ Agreement, for future retirees. The case law in this area—and indeed our very understanding of what it means for bene ts to vest—is built upon the idea that collective bargaining agreements do not last forever. That is implicit in the Supreme Court’s observation that “provid[ing] in explicit terms that certain bene ts continue after the agreement’s expiration” vests those bene ts. Tackett, 135 S. Ct. at 937, quoting Litton 501 U.S. at 207. It is also implicit in our cases. See, e.g., Auburn Gear, 441 F.3d at 481 (“Unless a contract provides for the vesting of bene ts, the presumption is that bene ts terminate when a collective bargaining agreement ends.”). The Term Provision here was nothing more than a durational limit. Instead of setting a rm end date to the 2002 Pensioners’ Agreement, it used a unilateral termination right to give the parties exibility to extend the Agreement past a soft termination date. Defendants’ super uity theory—which by its reasoning would apply to all durational limits on bene ts agreements—would lead to the impractical conclusion that no health-care bene ts program could create vested bene ts if it even contemplated the expiration of the agreement. The better reading of the 2002 Pensioners’ Agreement thus favors plainti s. 3. Extrinsic Evidence Even if the contract were ambiguous on the vesting issue, undisputed evidence of industry usage and the behavior of the parties makes clear that they understood the Agreement provided vested pension bene ts. We interpret collective bargaining agreements in light of “relevant industry-speci c No. 19-1601 15 ‘customs, practices, usages, and terminology.’” Tackett, 135 S. Ct. at 937–38 (Ginsburg, J., concurring), quoting 11 R. Lord, Williston on Contracts § 30:4, pp. 55–58 (4th ed. 2012); accord, Reese, 138 S. Ct. at 765 (“when a contract is ambiguous, courts can consult extrinsic evidence to determine the parties’ intentions”). We have applied this principle to interpret collective bargaining agreements in light of similar agreements with other employers. In Rossetto v. Pabst Brewing Co., 217 F.3d 539 (7th Cir. 2000), we interpreted a collective bargaining agreement between a brewery and the union of the plainti machinists. That agreement did not provide expressly for vesting and was silent regarding duration. Id. at 544–45. Nevertheless, we held that extrinsic evidence showed there was a latent ambiguity in the contract; we reversed summary judgment and remanded for trial. Id. at 545–47. We also found that another employer’s continued provision of bene ts under an identical but expired contract amounted to substantial evidence supporting the plainti -employees’ interpretation of the agreement as promising vested bene ts. Id. at 546. The Steelworkers’ agreements in Connors Steel and H.K. Porter Co.—and the Eleventh and Fourth Circuits’ holdings that those agreements vested health-care bene ts—provide compelling evidence of industry-speci c usage here. See Transportation-Commc'n Employees Union v. Union Paci c R.R. Co., 385 U.S. 157, 161 (1966) (“In order to interpret such an agreement it is necessary to consider the scope of other related collective bargaining agreements, as well as the practice, usage and custom pertaining to all such agreements.”). For years before the negotiation of the 1994 Pensioners’ Agreement here, the union used similar language in its health-care bene ts agreements with other employers in the steel industry. Both the Fourth and Eleventh Circuits concluded that 16 No. 19-1601 such language created a vested right to health-care bene ts. We characterized these agreements similarly in SR Industries Corp., 940 F.2d 665, 1991 WL 151901, at *4. Based on these precedents, the parties to the 2002 Pensioners’ Agreement would have reasonably understood the language they chose to have the same e ect it had been given by those courts. The background provided by these other agreements in the industry and their interpretation by courts support plainti s’ interpretation, just as the provision of bene ts in the parallel agreement in Rossetto supported the plainti employees in that case. This principle is similar to the prior-construction canon in statutory interpretation. See Antonin Scalia & Bryan Garner, Reading Law 322 (2012) (“If a statute uses words or phrases that have already received … uniform construction by inferior courts … they are to be understood according to that construction.”). While contract interpretation di ers from statutory interpretation in some ways, this principle applies in both: the actions of courts have given the phrase a meaning that parties knowledgeable in the relevant areas of law are presumed to use. See id. at 324. The actions of a key Acme and ITW manager also re ect an understanding that bene ts would vest. “How the parties to a contract actually perform their contractual undertakings is often … persuasive evidence of what the parties understood the contract to require.” Zielinski v. Pabst Brewing Co., 463 F.3d 615, 618 (7th Cir. 2006); see also, e.g., Mercury Sys., Inc. v. Shareholder Representative Servs., LLC, 820 F.3d 46, 52 (1st Cir. 2016) (applying Massachusetts law) (“Extrinsic evidence may include the parties’ … course of performance under the contract.”). Here, Anthony Kuchta was a bene ts program No. 19-1601 17 administrator for Acme and ITW who helped negotiate the 1994 Pensioners’ Agreement, the 2002 Pensioners’ Agreement, and the 2004 Closing Agreement. He testi ed not only that he understood the 2002 Pensioners’ Agreement to create vested lifetime bene ts, but also that he advised employees that if they wanted those bene ts, “they must retire under the 2002 Pensioners’ Agreement and should do so before the ‘last day’ when the plant closed and the 2002 Pensioners’ Agreement expired.” In other words, a manager who played a signi cant role in bene ts administration—and who signed the 2004 Closing Agreement with the union—assured employees that the health-care bene ts would last for their lifetimes, but only if they retired under the 2002 Agreement. This is not inadmissible, self-serving testimony o ered in an attempt to vary the meaning of an unambiguous contract. Cf. Rossetto, 217 F.3d at 546. The testimony came from a now-neutral non-party who participated in negotiations on the side of the employer. Defendants have not rebutted this testimony, which is all the more powerful because the contemporaneous statements it describes invited employees to rely upon them when making retirement decisions. The permanent injunction issued by the district court is AFFIRMED.
Primary Holding
A company's settlement agreement with a union unambiguously provided for lifetime health-care benefits for retirees.

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