The plaintiff class, comprising salaried and executive retirees of General Motors of Canada Limited (GMCL), brought a class action alleging that GMCL breached its contracts by reducing post-retirement health care and life insurance benefits.
On motions for partial summary judgment, the court held that the reservation of rights clauses in the benefit documents for salaried employees were ambiguous and did not clearly permit GMCL to reduce benefits after the employees had retired.
Applying principles of contractual interpretation, including contra proferentem and the duty of good faith, the court found GMCL breached its contracts with the salaried retirees, including new hires and early retirees.
However, the court found that the reservation of rights clause for executive retirees was clear and unambiguous, allowing GMCL to reduce their benefits.