Young v. Standard Oil (Indiana), IP 83-1751-C.
| Decision Date | 27 April 1987 |
| Docket Number | No. IP 83-1751-C.,IP 83-1751-C. |
| Citation | 660 F. Supp. 587 |
| Parties | Philip A. YOUNG, et al. v. STANDARD OIL (INDIANA), Amoco Oil Company. |
| Court | U.S. District Court — Southern District of Indiana |
Phillip Greene Decker, Decker & Lawyer, Anderson, Ind., for plaintiffs.
Charles E. Bruess, Barnes & Thornburg, Indianapolis, Ind., for defendants.
This matter is before the Court upon the defendants' motion for summary judgment pursuant to Fed.R.Civ.P. 56. This rule states, in part, that:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). In ruling on a summary judgment motion, the district court must examine the evidence in the light most favorable to the nonmoving party by drawing all reasonable inferences in favor of that party. See United States Shoe Corp. v. Hackett, 793 F.2d 161, 166 (7th Cir.1986); Black v. Henry Pratt Co., 778 F.2d 1278, 1281 (7th Cir.1985). The Court heard arguments on defendants' motion on April 16, 1987. The Court, having examined the motion, the memorandums of law, the affidavits and other exhibits, now finds there is no genuine issue as to any material fact and that the defendants are entitled to judgment as a matter of law. The Court now enters the following findings of fact and conclusions of law.
1. The nine named plaintiffs are former employees of the defendant Amoco Oil Company ("Amoco"). The plaintiffs were employed in the portion of Amoco's Fertilizer & Pesticides Division ("F & P Division") that was sold to The Cropmate Company ("Cropmate") in 1983. At all material times, Amoco was a wholly-owned subsidiary of defendant Standard Oil Company (Indiana) ("Standard").
2. For a number of years prior to 1983, Amoco owned and operated the F & P Division, which was responsible for raw materials acquisition, manufacture, primary distribution, terminaling, marketing and farm delivery and application of fluid agricultural fertilizers and crop protection materials. The Division had facilities in fourteen states although the bulk of these were in the Midwest. Included in the Division were more than 350 retail fertilizer outlets, fourteen fertilizer processing (mix) plants, six ammonia terminals, four soil laboratories, Torch Chemical (which operated seven agricultural chemical distributorships), Trekker Chemical (which operated a manufacturing/formulation plant producing specialty fertilizer additives and agricultural pesticides) and over 800 employees.
3. The retail outlets in the F & P Division were organized into three districts as follows:
District State Number of Outlets
East Wisconsin 11
Illinois 87
Indiana 38
Ohio 20
Michigan 6
West Minnesota 32
Iowa 91
Missouri 28
Kansas 1
Nebraska 3
South Georgia 36
Florida 1
Alabama 1
Louisiana 1
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356
4. Each of the retail outlets was managed by one F & P employee called the "crop guide manager." A number of these retail outlets also had a second full-time employee called a "helper" or "second-man." The named plaintiffs in this action were each employed in the retail outlets as follows:
5. In 1982, Amoco decided to try to divest the F & P Division. Initially, Amoco wanted to sell the entire Division as an on-going concern, and the investment banking firm of Morgan Stanley & Co. was employed to seek a buyer for the business. However, following a lack of significant response to an offering memorandum that was provided to prospective purchasers, Morgan Stanley recommended on June 15, 1982, that Amoco proceed with any feasible divestment plans.
6. Thereafter, on June 24, 1982, an Amoco Vice President recommended that Amoco drop fertilizers and pesticides as a line of business and cease all domestic retail fertilizer and pesticide operations as soon as practical but not later than June 30, 1983. On July 19, 1982, Amoco's Management Committee considered and approved a proposal to divest the F & P Division and withdraw from the business. The proposal was (1) to sell the business as an entity if possible; (2) to sell the business in pieces if sale as an entity was not possible; and (3) if sales were not possible, to shut down the operations. Standard's Management Committee approved the proposal on July 20, 1982.
7. Over a period of several years prior to 1981, Standard and its subsidiaries had implemented a number of different severance policies. Effective April 1, 1981, however, Standard had adopted the Severance Allowance Policy of Standard Oil Company and Participating Companies (the "1981 Severance Policy"). The 1981 Severance Policy provided that it would apply to a company "whose management elects to apply it to a particular employee-reduction situation," and that it could "be implemented for a particular employee-reduction situation for a limited period of time." The 1981 Severance Policy also conferred authority on management to designate categories of employees who would not be eligible to participate in situations where the Policy was otherwise implemented. The 1981 Severance Policy further provided that:
The 1981 Severance Policy was reported to the United States Department of Labor by letter dated November 3, 1981.
8. During 1982, when divestiture of the F & P Division was initially being considered, Amoco's management also began considering the possible implementation of the 1981 Severance Policy in connection with such a divestiture. Thereafter, in June 1982, after Amoco's management preliminarily decided to cease all F & P operations, the process for obtaining formal approval to implement severance under the 1981 Severance Policy was begun. On July 13, 1982, management approval was granted to implement severance under the 1981 Severance Policy for all F & P Division employees, including the crop guide managers and other retail plant employees.
9. On August 2, 1982, however, after Standard's approval of the final Amoco proposal to divest the F & P Division (which included selling and shutting down the Division in pieces if sale as an entity was not possible), L.D. Thomas, President of Amoco, sought permission from Standard to create a different severance policy to govern the F & P divestiture. Thomas's memorandum stated, inter alia, that:
10. Standard approved this recommendation to adopt a special severance policy for the divestiture of...
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