Hercules Powder Co v. Brookfield

• Decision Date: 20 June 1949
• Citation: 189 Va. 531,53 S.E.2d 804
• Parties: HERCULES POWDER CO. v. BROOKFIELD.
• Court: Virginia Supreme Court

53 S.E.2d 804

189 Va. 531

HERCULES POWDER CO.

v.BROOKFIELD.

Supreme Court of Appeals of Virginia.

June 20, 1949.

Error from Hustings Court of City of Richmond, Part II; M. Ray Doubles, Judge.

Action by Thomas S. Brookfield against Hercules Powder Company, for moneys due plaintiff as dismissal salary under an employment contract. There was a judgment for plaintiff for $320 and interest, and the defendant brings error.

Judgment affirmed.

Before HUDGINS, C. J., and GREGORY, EGGLESTON, SPRATLEY, BUCHANAN, STAPLES and MILLER, JJ.

George R. Humrickhouse, Robert N. Pollard, Jr., Richmond, J. R. L. Johnson, Jr., Robert A. Fulwiler, Jr., Wilmington, Del., for plaintiff in error.

Ted. Dalton, Richard H. Poff, Radford, for defendant in error.

MILLER, Justice.

This action was instituted by Thomas S. Brookfield, hereinafter called plaintiff, against Hercules Powder Company, hereinafter referred to as defendant. Judgment for $320 and interest, the sum claimed by plaintiff to be owing to him as dismissalsalary under an employment contract, which he asserts that he and other employees had with defendant, was rendered by the trial court.

Defendant insists that (a) no contract for the payment of what is commonly called dismissal or termination of employment wages or salary was in effect with its employees, and (b) if any contract for payment of termination wages or salary existed, plaintiff did not bring himself within its terms.

On August 16, 1940, the United States Government entered into a contract with defendant whereby that corporation was to obtain the necessary land and erect and operate thereon for the Government an extensive plant for the manufacture of gunpowder. Approximately twenty-five hundred acres of land were acquired in the vicinity of Radford, Virginia, and a plant was constructed and operated. It is referred to as the Radford Plant. Early in 1941, defendant, under and by authority of a second contract with the Government, took over operation of another nearby plant owned by the Government and known as "New River Ordinance Plant."

Plaintiff was employed by defendant on April 17, 1941, as Captain of the Guard Forces at the New River Plant. He continued in such position until December 3, 1945, when this plant was relinquished by defendant and turned back to the Government.

For about a year, the New River Plant was maintained and operated by the defendant under the separate contract applicable thereto. However, in 1942, active operation of that plant was suspended and it was placed in a stand-by condition. Plaintiff's employment was not interrupted by this inactivity, but during this period he continued in his same position. Upon reactivation of the plant in 1943, the service to be rendered was enlarged and its maintenance and operation were transferred to and placed under the original contract for the operation of the Radford Plant. In short, when reactivated, it was brought under the Radford Plant contract and thereafter continued to be operated under its terms.

In that part of the contract which had to do with "Extra compensation to employees, any discontinuance wages, etc.", we find this provision:

"In the payment of extra compensation and in the making of expenditures pursuant to or in the maintenance of welfare or other plans for the benefit of employees, the Government shall be chargeable therefor insofar as the same are consistent with the Company's general employee-relations throughout its organization * * *; it being intended that the employees of said plant shall be treated no less favorably than employees of other plants of the Contractor. * * *."

On August 12, 1943, defendant received from the War Department an inquiry concerning what, if any, employee termination pay plan was used by it. The inquiry reads, in part, as follows:

"Did the operating contractor, as part of his Employee Relations Plan, have a termination pay plan in effect prior to 3 October 1942? If so, furnish an excerpt of the plan listing the termination pay provisions."

On November 23, 1943, defendant replied at length. It set out in detail the history of the Company's plan which had been in effect for twelve years. In this communication, the Government's approval of an amended plan was requested. That amendment was embodied in two resolutions of March 23, and November 9, 1943, respectively, which had to do with wage-roll employees and salary-roll employees. Though these resolutions apply to different classes of employees, they are, in purpose and effect, the same. That specifically applicable to "Pay Roll Employees, " to which group plaintiff belonged, reads:

"Resolved, That the following Dismissal Payment Plan for salary-roll employees of this Company be, and is hereby adopted:

"Department managers are authorized within their discretion to grant dismissal payments, within the following limits to salary-roll employees who are laid off from time to time for indefinite periods. * * *" (The scale of payments are then recited).

The original contract of August 16, 1940, under which both plants were being operated was amended on February 9, 1944. The only provision added that is pertinent to this inquiry was to the effect that defendant should make every reasonable effort to effect settlement of all obligations, commitments and claims which were reimbursable by the Government under the contract.

Though such contemplated settlements were to be subject to written approval by the Government's contracting officer, it recognized and reaffirmed its responsibility for any judgment rendered against defendant upon any obligation, commitments or claims which were reimbursable under the provisions of the contract.

During the latter part of 1944 and early 1945, written communications passed between defendant and the Government relative to the administrative procedure contemplated in the payment of dismissal wages and salaries. In its letter to the Government's contracting officer, defendant advised that the dismissal wage and salary plan recommended in the resolutions of March 23, and November 9, 1943, had been approved by the War Department Wage Administrative Agency and that it was to be made effective in the plants upon approval by the contracting officer. Its letter of January 4, 1945, to that effect, reads, in part:

"It is proposed that the dismissal wage and salary plan will become effective in * * * (names of all Hercules operated plants set out) * * * upon the date of the approval of this letter by the Contracting officer for the Government or his duly authorized representative. Notice of the adoption of the plan and its principal features will be announced to all employees at these plants immediately following such approval. This action will help in the recruit of labor, is essential in holding employees on war work during this critical period, and will serve as a means of achieving an orderly plant shutdown.

"Dismissal Wages and Salaries will be paid to all employees who are terminated after the date of the approval of this letter due to any reduction in force, but the plan will not be applied in any instance of vol untary separation by the employee, in any instance where the employee is discharged 'for cause' or in any instance where instead of being terminated, an employee is transferred to another Hercules Plant or office * * *.

"No employee shall receive dismissal wages or salary unless such employee is terminated due to a reduction in force. The fact, however, that an employee who receives dismissal pay from the company is later rehired by Hercules Powder Company or the Government at the same plant or elsewhere shall not warrant the refund of any or all of the dismissal pay which such an employee had received. * * *.

"The Government shall reimburse Hercules Powder Company for all costs of administering the foregoing plan and for all dismissal wages and salaries which are paid pursuant thereto. * * *."

By written communication of January 29, 1945, the Government's contracting officer approved the plan recommended, and added--"since I find as a fact that such plan is necessary to the work being performed under such contracts: * * *."

An article or notice was published March 16, 1945, in defendant's newspaper, the Radford Plant Weekly, announcing to its employees and the public that the dismissal wage and salary plan had been approved by the Government and put into effect by defendant.

Two weeks later, defendant circulated among its employees at the plants a revised edition of its "Employees Handbook." Its stated purposes were to advise the employees that defendant was operating under a contract with the Government, but that they were employees of the company, and to acquaint them with the conditions under which they worked and with the policies, plans and other services in effect at the date of its issuance. It contained three major headings devoted to Working Conditions, Special Information and Industrial Relations Plans. The third heading or chapter, which, among other things, deals with the Wage Dismissal Plan begins with this paragraph:

"Hercules Powder Company sponsors the plans outlined on the following pages totake care of such matters as insurance, sickness, military duty, vacations, and similar matters. Necessarily, the following are only brief outlines of such plans as they are in effect at present. They are subject to discontinuance or change from time to time. The office superintendent or personnel superintendent will be glad to...