691 F.2d 357 (7th Cir. 1982), 79-1377, Affetto v. TRW, Inc.

Docket Nº:79-1377.
Citation:691 F.2d 357
Party Name:Carlo AFFETTO, et al., Plaintiffs-Appellants, v. TRW, INC., an Ohio corporation, and John Hancock Mutual Life Insurance Company, a Massachusetts corporation, Defendants-Appellees.
Case Date:October 21, 1982
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 357

691 F.2d 357 (7th Cir. 1982)

Carlo AFFETTO, et al., Plaintiffs-Appellants,


TRW, INC., an Ohio corporation, and John Hancock Mutual Life

Insurance Company, a Massachusetts corporation,


No. 79-1377.

United States Court of Appeals, Seventh Circuit

October 21, 1982

Submitted Aug. 27, 1980.[*]

Charles F. Marino, Chicago, Ill., for plaintiffs-appellants.

D. Kendall Griffith, Hinshaw, Culbertson, Meolmann, Hoban & Fuller, J. Robert Geiman, Peterson, Ross, Schloerb & Seidel, Chicago, Ill., for defendants-appellees.

Before PELL, Circuit Judge, and SWYGERT and FAIRCHILD, Senior Circuit Judges.

FAIRCHILD, Senior Circuit Judge.

The question on this appeal is the proper interpretation of an Illinois statute allowing an attorney's fee to a plaintiff in a successful suit for wages, and whether an employee's action to recover pension and insurance benefits is a suit for wages. 1

Plaintiffs are former employees of defendant TRW at a plant in the Chicago area. In 1973 TRW informed its Chicago employees that it was moving its operations to Georgia. The plant was closed in 1975, and plaintiffs' employment was terminated.

TRW had a retirement plan under which employees who fulfilled certain length of service requirements were entitled to an annuity at age 62. TRW also followed the practice of supplementing the annuity with life insurance and health insurance upon retirement at age 62 or 65, depending on the fulfillment of certain length of service requirements.

Plaintiffs were under 62 years of age when the plant closed. The termination prevented them from continuing in TRW employment until 62 or 65. They had met length of service requirements.

The plan was administered by John Hancock Mutual Life Insurance Company, also a defendant. TRW and Hancock took the position that employees must be actively employed by TRW at age 62 in order to receive the full annuity, although willing to pay an annuity in a reduced amount. TRW

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also contended that the right to insurance benefits was contingent upon the employee's remaining in the employ of TRW until retirement age.

The district court granted summary judgment in favor of plaintiffs on the annuity claim, holding plaintiffs were entitled to full annuities when they reached age 62. After a trial, the court found there was an implied contract under which TRW was obligated to provide the insurance benefits. Judgment was entered and defendants appealed, but did not challenge the ruling on the full annuities. This court decided, in an unpublished order, that the finding of an implied contract was not clearly erroneous, and affirmed.

While the appeal on the merits was pending, plaintiffs sought allowance of attorney's fees. The district court decided that the annuities were not "wages" under the Illinois statute relied on, and denied the claim. The court declined to consider the claim for fees with respect to the insurance benefits because the appeal was pending on that part of the case.

Plaintiffs appealed. The parties agree that we should decide the question of attorney's fees as to both annuities and insurance benefits although the latter was not addressed by the district court. We perceive no reason for limiting our consideration to the matter of the annuities.

Ill.Ann.Stat. ch. 13, § 13 provides:

Whenever a mechanic, artisan, miner, laborer, servant or employee brings suit for wages earned and due and owing according to the terms of the employment, and establishes by the decision of the court or jury that the amount for which he has brought suit is justly due and owing, and that a demand was made in writing at least 3 days before suit was brought, for a sum not exceeding the amount so found due and owing, then the court shall allow to the plaintiff a reasonable attorney fee of not less than $10 in addition to the amount found due and owing for wages, to be taxed as costs of suit.

No decision has been found in Illinois or elsewhere answering our question whether retirement annuities or insurance benefits which an employer obligates himself to provide are "wages" within the meaning of § 13 or a similar provision.

Plaintiffs argue that the purpose of § 13 was to aid employees in the collection of compensation due them and to discourage an employer from using his position of economic superiority to avoid paying an employee the agreed compensation. Plaintiffs would interpret "wages," in the light of that purpose, as meaning compensation for an employee's services. Conceding that in 1889 when § 13 was enacted retirement benefits for workers were not prevalent, plaintiffs contend that the meaning of "wages" should keep pace with the expansion of types of compensation for labor.

TRW contends for a very narrow reading of "wages." Although conceding that post-retirement benefits are part of an employee's compensation for his services, it argues that wages are "but one separate and distinct species within the genus of compensation. 'Wages' constitutes those payments which are immediately due and owing an employee for the services just rendered. It is that remuneration given for current labor at short intervals." Brief of TRW at 8.

Although the term "wages" has been given varying content in statutory definitions and court decisions, it is...

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