Feola v. Valmont Industries, Inc.

• Decision Date: 10 April 1981
• Docket Number: No. 43157,43157
• Citation: 208 Neb. 527,304 N.W.2d 377
• Parties: Mario FEOLA, Appellant, v. VALMONT INDUSTRIES, INC., a Nebraska corporation, Appellee.
• Court: Nebraska Supreme Court

Page 377

304 N.W.2d 377

208 Neb. 527

Mario FEOLA, Appellant, v. VALMONT INDUSTRIES, INC., a Nebraska corporation, Appellee.

No. 43157.

Supreme Court of Nebraska.

April 10, 1981.

Syllabus by the Court

1. Employment Contracts: Termination of Employment. Where an employer lawfully terminates the employment of an employee, such term of employment is not extended by the receipt of severance pay benefits provided by the employer. The payment of severance pay by the employer and the acceptance of the same by the employee generally manifests a termination of the employment relationship.

2. Employment Contracts: Termination of Employment. In the absence of a promise on the part of the employer that the employment should continue for a period of time that is definite or capable of determination, such employment relationship is terminable at the will of the employer as it constitutes an indefinite hiring. When the employment is not for a definite term and there are no contractual or statutory restrictions upon the right of discharge, an employer may lawfully discharge an employee whenever and for whatever cause he chooses, without incurring liability.

3. Employment Contracts. A provision in a contract of employment providing that the employee should have the privilege of terminating his employment at any time, with or without cause, upon written notice, and that the employer should have the same privilege, constitutes a hiring at will.

4. Evidence: Questions of Law. Where the essential facts presented in a case are undisputed, the decision becomes a question of law to be decided by the court, and the findings of the trial court are essentially conclusions of law.

Russell S. Daub of Daub, Stehlik & Smith, Omaha, for appellant.

John E. North and Lee H. Hamann of McGrath, North, O'Malley & Kratz, P. C., Omaha, for appellee.

Heard before KRIVOSHA, C. J., and BOSLAUGH, McCOWN, CLINTON, BRODKEY, WHITE, and HASTINGS, JJ.

BRODKEY, Justice.

Mario Feola, plaintiff and appellant herein, filed suit in the District Court of Douglas County to recover the sum of $6,500 allegedly due him under the terms of a certain employee bonus plan maintained by his former employer, Valmont Industries, Inc. (Valmont), for the benefit of certain employees of that company, subject to the fulfillment of specified conditions. Plaintiff was employed by defendant company on or about May 5, 1975, as a marketing manager of the Electrical Products Division, his duties consisting primarily of being a salesman for that division. Feola was informed by his superiors in November of 1976 that his employment would be terminated due to a general work force reduction because of economic conditions. Subsequent to that notification, he remained with the company under the terms of its severance pay policy, the stated purpose of which was "to provide fairly for the separation of exempt and non-exempt salaried employees, being terminated at Company convenience, by providing an equitable severance pay as set forth in this policy"; and pursuant to that plan he was paid 10 weeks of severance pay, and was afforded the opportunity of endeavoring to obtain new employment. This pay continued until February 4, 1977, at which time Feola notified Valmont that he had obtained other employment.

Valmont filed an answer to plaintiff's petition, alleging that Feola was not an eligible participant on its payroll on December 25, 1976, as required by the terms of the bonus plan under consideration. During the pendency of the proceedings prior to trial, both the plaintiff and the defendant filed motions for summary judgment, which were denied by Judge Richling for the reason that there remained genuine issues of material facts to be determined. At the close of the plaintiff's case-in-chief at the subsequent trial, the defendant renewed its motion for summary judgment and also moved for a directed verdict of dismissal, which motions were sustained by the trial judge, who thereafter dismissed the case and discharged the jury. Plaintiff's motion for a new trial was overruled, and he now appeals to this court.

In view of the fact that a partial trial was had after defendant's motion for summary judgment was overruled, we consider the validity of the actions taken by the trial judge, in this case Judge Gitnick, on the basis of the principles of law applicable to motions for directed verdict. In Foremost Ins. Co. v. Allied Financial Services, Inc., 205 Neb. 153, 286 N.W.2d 740 (1980), we set forth the rule as follows: "It is well settled law in this state that the party against whom a verdict is directed is entitled to have every controverted fact resolved in his favor and to have the benefit of every inference that can reasonably be deduced from the evidence. It is only when the facts are conceded, undisputed, or are such that reasonable minds can draw but one conclusion therefrom that the trial court must decide the question as a matter of law and not submit it to a jury." See, also, Novotny v. McClintick, 206 Neb. 99, 291 N.W.2d 252 (1980); Woodsmall v. Marijo, Inc., 206 Neb. 405, 293 N.W.2d 378 (1980).

In this case, a great number of the determinative facts were stipulated between the parties prior to trial, among which were the following:

1. That Mario Feola was employed by Valmont on or about May 5, 1975, under the terms and conditions of a letter from Al Hunt, a personnel representative of Valmont, to Feola dated March 25, 1975. The letter referred to, which was incorporated into the stipulation by reference, after confirming the plaintiff's decision to become employed by Valmont and setting out the terms of his salary, also provides: "It is our understanding that during your employment with Valmont you will, of course, devote your full time to the interest of Valmont and not be engaged in other commercial pursuits. You shall have the full privilege of terminating your employment with Valmont Industries, Inc. at any time, with or without cause, upon written notice and Valmont shall have the same privilege."

2. During the term of his employment Feola worked as an administrative employee at Valmont.

3. At all pertinent times Valmont had in effect a severance pay policy, No. 274, dated January 1, 1975. A copy of that plan was also incorporated into the stipulation by reference.

4. On December 10, 1976, Tom Whalen (the personnel director for Valmont) sent to Feola a letter enclosing a document entitled "Severance Pay Eligibility Form" to be completed and returned by December 13, 1976. The aforementioned document was returned by Feola, executed by Feola and dated December 10, 1976, and read as follows: "I certify that during the weeks of Nov. 20 Dec. 3, 1976, and Dec. 6 Dec. 10, 1976, I have been unable to secure similar employment. I understand that I am receiving severance payments under terms of Policy # 274, the contents of which was explained to me on termination. / s/ Mario Feola Returned to Tom Whalen." Identical forms were executed by Feola between December 10, 1976, and January 31, 1977. The December 10, 1976, letter and Severance Pay Eligibility Form were incorporated into the stipulation by reference.

5. Between November 13, 1976, and February 4, 1977, Feola actively sought alternative employment with other firms. On or about January 31, 1977, Feola was employed by Power Enterprises, Inc., of New Orleans, Louisiana.

6. Plaintiff's base rate of pay at Valmont at the time of his termination was $26,000 per year. For the fiscal year 1976, the earnings per share were $3.60. If plaintiff was eligible under the terms of the plan and if the court finds that the payment was not a gratuity and defendant was thus legally obligated to pay plaintiff a bonus under the plan, plaintiff is entitled to receive a $6,500 bonus. This statement does not constitute a stipulation as to the merit of the defenses raised by defendant that payment under the plan was a gratuity and that plaintiff was not an eligible administrative employee under the plan.

At this point it will be helpful to examine the two plans in effect at Valmont at all times material to this litigation. The bonus plan involved in this litigation was received in evidence as exhibit 3, and entitled "ADMINISTRATIVE BONUS PLAN 1976." In general, the plan provides that it is applicable to administrative employees of Valmont, and is effective for the year 1976. It states that the purpose of the plan is to build into the compensation plan for administrative employees a direct financial reason for striving continually for more effective operation of the business. It is further provided that the plan shall be administered by the president of the company, and in applying and interpreting the provisions of the plan, his decision shall be final.

Paragraph V of the plan is as follows, and we quote it in full: "V. ELIGIBILITY FOR PARTICIPATION "All Administrative Employees who are not included under another type incentive plan. Payment will be based upon a time period as a percentage of the total twelve months, with the exception that no one employed after October 1, 1976, will be eligible to receive any bonus under the 1976 Bonus Plan."

Paragraph VII is entitled "AMOUNT OF PAYMENTS," and subsection B thereof provides as follows: "B. Allocation to individual employees is subject to individual appraisal; however, total bonus payout under this Plan will remain the same."

Another very pertinent provision contained in the plan is paragraph X entitled "SEPARATIONS." That paragraph reads as follows: "Payment will be made only to eligible participants who are on the payroll on December 25, 1976, the end of the fiscal year. However, pro-rata payment will be made to participants retiring during the Plan year and to the estates of participants who die during the Plan year."

Finally, paragraph XI, entitled "REVISION OR DISCONTINUANCE OF THE PLAN," provides as follows:

"This Bonus Plan shall not create any rights of future...