## Facts

- A group of 107 retired teachers previously employed by a public high school district retired between spring 1994 and June 2007 under a series of collective-bargaining agreements (CBAs) between the school board and the teachers’ union.
- Three CBAs (1991, 1998, and 2001) contained provisions under which the board would pay specified portions of retirees’ health-insurance premiums upon retirement under stated conditions.
- After certain CBAs expired, the board attempted to reduce the level of post-retirement health-insurance benefits being provided to retirees.
- The retirees alleged they retired in reliance on the promised health-insurance contributions and that the benefits vested at retirement and continued after CBA expiration.
- The board argued (among other points) that (a) retiree benefits did not survive CBA expiration, (b) later CBAs modified or eliminated the earlier retiree benefits for some retirees, and (c) some retirees were ineligible because they did not satisfy an asserted condition precedent (participation in a Teachers’ Retirement System early retirement option), and any prior approvals were mistaken.
- The circuit court entered judgment for the retirees, ruling the board could not decrease the benefits and that the board had waived reliance on the asserted eligibility condition for certain retirees.
- The board appealed.

## Issues

1. Whether the earlier CBAs created retiree health-insurance benefits that vested at retirement and survived expiration of the CBAs.
2. Whether later CBAs could validly modify or extinguish retiree health-insurance benefits for teachers who had already retired under the earlier CBAs.
3. Whether the board could retroactively deny benefits to certain retirees based on an asserted eligibility condition precedent, or whether the board waived that condition by approving retirees and paying benefits.

## Decision

- The appellate court affirmed the judgment for the retirees.
- The court held the retiree health-insurance contributions promised in the earlier CBAs vested at retirement for those who retired under those terms and therefore survived CBA expiration.
- The court rejected the board’s claim that later CBAs could retroactively reduce or eliminate vested retiree benefits for already-retired teachers.
- The court agreed that the board’s conduct (approving retirees as eligible and paying benefits) supported waiver of the asserted eligibility condition, barring retroactive disqualification to reduce benefits.

## Legal Principles

- Retiree health-insurance benefits negotiated in a CBA may constitute deferred compensation and can vest at retirement when the agreement ties the promise to retirement eligibility rather than ongoing employment during the CBA term.
- Once retiree benefits vest, they survive expiration of the CBA and may not be unilaterally reduced as to employees who already retired under the promised terms.
- Subsequent labor agreements may set different terms for future retirees but generally cannot bargain away or diminish vested benefits of already-retired employees.
- An employer may waive reliance on an asserted contractual eligibility condition by knowingly treating employees as eligible (e.g., approving retirement benefits and paying them), and may be barred from later invoking the condition to retroactively terminate benefits.

## Conclusion

The court upheld enforcement of retiree health-insurance contributions promised in earlier CBAs, ruling that eligible teachers’ rights vested at retirement, were not subject to reduction after contract expiration, and could not be retroactively denied based on an eligibility condition the board had waived through its prior approvals and course of performance.


Haake v. Bd. of Educ. for Twp. High Sch. Glenbard Dist. 87, 925 N.E.2d 297 (Ill. App. Ct. 2010)