Borden v. Skinner Chuck Co.

• Decision Date: 10 November 1958
• Docket Number: Nos. 108732,108733,s. 108732
• Citation: 150 A.2d 607,21 Conn.Supp. 184
• Court: Connecticut Superior Court
• Parties: Ben BORDEN et al. v. SKINNER CHUCK COMPANY (two cases).

Page 607

150 A.2d 607

21 Conn.Supp. 184

Ben BORDEN et al. v. SKINNER CHUCK COMPANY (two cases).

Nos. 108732, 108733.

Superior Court of Connecticut, Hartford County.

Nov. 10, 1958.

Levin, Schwartz, Seidman, Zeman & Daly, Hartford, for plaintiffs in both cases.

Shipman & Goodwin, Hartford, for defendant in both cases.

ALCORN, Judge.

Two actions were tried together. The parties in each are identical. The plaintiffs are factory employees of the defendant who have been continuously employed for varying periods ranging in individual cases from five to sixteen years. In one action the plaintiffs seek to recover for themselves and other employees similarly circumstanced a year-end bonus for the year 1955, and in the other action a like bonus for the year 1956.

The first count of each complaint alleges the breach of a promise by the defendant to pay a year-end bonus to the plaintiffs and those similarly situated; and a second count alleges that the defendant has wrongfully diverted funds which it had 'held in escrow and in trust for the purpose of paying a year-end bonus.'

The ensuing discussion is applicable to both actions. From the facts hereinafter set forth it will be apparent that no fund existed which the defendant could be said to have 'held in escrow and in trust,' and consequently the second count furnishes no basis for relief. In the first count the plaintiffs concededly rely solely upon proof of an express contract. The case therefore differs from Corriveau v. Jenkins Bros., 144 Conn. 383, 132 A.2d 67, wherein the plaintiffs relied upon an implied contract.

The facts are as follows: The defendant's employees are roughly classified as factory employees, office and branch office employees, salesmen and executive officers. In addition to wages or salaries, the defendant bears the expense of paid vacations and holidays and of various pension plans, and it shares with the employees the expense of employees' insurance of various types. In addition to these items, the defendant made a year-end payment for the first time in 1937. In 1938 it made no year-end payment but in each year from 1939 through 1954 it did make one. The defendant never in any year, however, paid a bonus to all employees. Furthermore, the qualifications entitling an employee to a bonus in any given year varied from year to year. In 1955 and 1956 it paid a bonus to office employees only.

In the years in which a bonus was paid, the procedure was for a committee of the executives to survey the defendant's earnings and other factors toward the end of the year. After determining how much of the earnings for the year might be available for a bonus, they sought authority from the directors to pay a bonus, and the permission, if granted, was in the form of an authorization to the management to pay a bonus. The defendant had no audited financial statement until October. No amounts were set aside for a bonus during the year, and a bonus, when paid, was disbursed from current cash on hand at the year's end. When management had been authorized by the directors to pay a bonus, the former then determined the amount of the cash on hand which would be allocated to the purpose. The part of this to be paid to executives was then decided upon the deducted from the total to be disbursed. The remainder was then allocated among various employees. Each employee was considered individually and exceptions were made for those specially deserving, while those less deserving were classified accordingly. After determining the sum necessary to meet the requirements of all exceptional cases, it was deducted from the total amount originally decided upon for a bonus payment. The money remaining after deducting the sums to be paid executives and special employee cases was then allocated among such other employees as were to share in the bonus, the amount which each was to receive being determined by arriving at a multiple of the employees' base hourly rates which, taking into account the number of employees to be paid, would absorb the amount of money available. Upon this basis the bonus, in the various years in which it was paid, varied from a sum amounting to as little as twenty times an employee's hourly rate to as much as two hundred times that rate. There was no common principle for determining the amount paid an individual, which depended partly on the hours he had worked and his pay rate. The one constant factor each year was that the employee, in order to qualify at all, must have been employed by the defendant on a specified date near the end of that year, but even this date was chosen annually and varied within a range of three or four weeks.

The plaintiffs received bonuses in the years in which they worked from the beginning of their respective employments through 1954. They received no bonus in either 1955 or 1956. In 1955 and 1956 bonuses were paid only to those office employees who were in the defendant's employ on November 19, 1955, and November 18, 1956, respectively, and who had also been in the defendant's employ on December 24 of the preceding year, respectively. Three thousand dollars was allocated to the purpose in 1955 and $11,585.22 in 1956.

About 1950 the defendant issued a booklet entitled 'Know Your Company,' in which the following appeared: 'It has been customary, since 1937, for the company to make a year end payment to employees. The amount of such payment, if any, depends upon the earnings available from operations, and is entirely at the discretion of the Board of Directors.' At the time this booklet was issued, two of the named plaintiffs and over sixty-five other factory employees represented by the plaintiffs had already been in the defendant's employ for varying numbers of years and had shared in the payments theretofore made. Others who became employed at about the time the booklet appeared are not shown to have known of it at the time they undertook employment. At some indeterminate time after publication of the booklet, however, the plaintiffs became aware of it, including the quoted portion. None of the plaintiffs is shown to have inquired into the method of deciding upon the year-end payment described in the booklet until shortly before these actions were brought, and it was then learned that there was no uniformity in the payments.

In 1953 the defendant began to issue to each employee, with his pay, a slip containing the following statement: 'In addition to the weekly pay recorded on this slip, The Skinner Chuck Company is required by law to make payments to cover your Social Security,...