Hinkeldey v. Cities Service Oil Co.
| Decision Date | 13 September 1971 |
| Docket Number | No. 55022,No. 1,55022,1 |
| Citation | 470 S.W.2d 494 |
| Parties | 66 Lab.Cas. P 12,053, 1 IER Cases 17 Roger E. HINKELDEY et al., Respondents, v. CITIES SERVICE OIL COMPANY, Appellant |
| Court | Missouri Supreme Court |
Aaron A. Wilson, Kansas City, for respondents.
Thad C. McCanse, David A. Welte, James & McCanse, Kansas City, for appellant, Cities Service Oil Co.
HOUSER, Commissioner.
Seven ex-employees brought this action against Cities Service Oil Company for breach of a contract to grant them severance pay. Their claims aggregated $20,604.85. Cities Service denied any liability in any amount. We have jurisdiction. O'Dell v. Division of Employment Security, Mo.Sup., 376 S.W.2d 137; Flanigan v. City of Springfield, Mo.Sup., 360 S.W.2d 700.
Plaintiffs' petition alleged that on and prior to July 31, 1966 there was a contract between Cities Service and its employees providing that a regular full-time employee whose employment was terminated by defendant, where no direct replacement was necessary, should receive severance pay of one week's pay for each completed year of service up to 10 years and one and one-half week's pay for each completed year of service after 10 years; that plaintiffs had completed from 5 to 25 years' service, entitling them to designated sums of money for severance pay; that as of July 31, 1966 plaintiffs' employment was terminated through no fault of their own and that they were otherwise qualified for severance pay; that demand was made but defendant refused to pay.
Cities Service answered that on July 31, 1966 it ceased its marketing operations in the Kansas City area and sold its properties to Gulf Oil Company; that on and prior to that date Cities Service had in effect a plan under which employees whose employment was terminated were eligible for severance pay if they were not offered jobs by Gulf but that employees who did not accept employment by Gulf were not eligible for severance pay; that plaintiffs were offered employment by Gulf; that none of plaintiffs were (sic) eligible for severance pay; that any severance pay plan of Cities Service was voluntary and not contractual.
The case, tried to a jury, was submitted under Instruction No. 2 as follows:
'INSTRUCTION NUMBER 2
'Your verdict must be for plaintiffs if you believe:
'First, that prior to July 31, 1966 plaintiffs received notification and knowledge from defendant of the severance pay plan provided in ER--1 (Revised November 15, 1962), and
'Second, plaintiffs, in reliance upon the severance pay plan continued their employment with defendant until July 31, 1966, and
'Third, defendant arbitrarily withheld management approval of severance pay to plaintiffs.'
The jury returned a verdict for each plaintiff in the full amount of his claim for an aggregate total of $20,604.85. Judgments were rendered on the verdicts and Cities Service appealed.
Plaintiffs' claims are based upon Paragraph II of the following document, referred to as 'ER--1 Revised,' dated November 15, 1962, which was prepared by the manager and staff of the Employee Relations Department at Tulsa, Oklahoma, approved by the President, Executive Vice-President, General Counsel and legal staff of Cities Service in New York, and distributed to the division managers throughout the country:
A. Early retirement benefits of the Retirement Plan will be made available to employees whose services are terminated at the Company's option.
B. In addition, the Company will pay special supplements, as follows:
1. Until Age 62
a. Supplement of one-half (1/2) the early retirement discount.
b. Supplement of $96.00 per month in lieu of Social Security to which the employee will be entitled at age 62.
2. From Age 62 to Age 65
a. Supplement of one-half (1/2) the early retirement discount.
3. After Age 65
a. Supplement for life of one-half (1/2) the early retirement discount, subject to reduction by any future increases in Social Security.
4. All Special Supplements will be discontinued in the event of the death of the employee.
A. Special severance allowances are provided, as shown on the attached schedule. This schedule allows one week's pay for each completed year of service up to ten (10) years and one and one-half week's pay for each completed year of service in excess of ten (10) years, up to a maximum of one year's pay.
B. This severance allowance is not to be granted to employees who conclude their employment by their own choice. Rather such severance allowance is to be extended only to a regular full time employee whose employment is terminated by the company and for whom no direct replacement is necessary.
A. The application of any of these provisions for early retirement, supplemental benefits, or severance pay must be submitted to the Employee Relations Department for Management approval.'
"SEVERANCE ALLOWANCE
---------------------------------------------------
Completed Years of Service Severance Allowance
---------------------------- ---------------------
1 Year 1 Week
2 Years 2 Weeks
3 " 3 "
4 " 4 "
5 " 5 "
---------------------------------------------------
6 " 6 "
7 " 7 "
8 " 8 "
9 " 9 "
10 " 10 "
---------------------------------------------------
11 " 11 1/2 "
12 " 13 "
13 " 14 1/2 "
14 " 16 "
15 " 17 1/2 "
---------------------------------------------------
16 " 19 "
17 " 20 1/2 "
18 " 22 "
19 " 23 1/2 "
20 " 25 "
---------------------------------------------------
21 " 26 1/2 "
22 " 28 "
23 " 29 1/2 "
24 " 31 "
25 " 32 1/2 "
---------------------------------------------------
26 " 34 "
27 " 35 1/2 "
28 " 37 "
29 " 38 1/2 "
30 " 40 "
---------------------------------------------------
31 " 41 1/2 "
32 " 43 "
33 " 44 1/2 "
34 " 46 "
35 " 47 1/2 "
---------------------------------------------------
36 " 49 "
37 " 50 1/2 "
38 " 52 "
From the evidence considered in the light most favorable to the prevailing parties the jury could have found these facts: The primary purpose of a severance pay allowance was to help an employee during a period of time after he left Cities Service and before he found other suitable employment. The intent of the Employee Relations Department Manager in approving ER--1 Revised was to set forth the standards for all employees qualifying under its provisions for severance pay, subject to management approval. Although ER--1 Revised was not intended to be distributed generally to all employees and was not so distributed, it was not marked secret or confidential and department heads were not advised that it was secret and confidential. The Kansas City regional manager and his office manager each had a copy. The office manager's copy was kept in a policy book, or binder, in his office, where it was available with other company policy memoranda and data for reference and inspection by interested department heads. ER--1 Revised was the subject of at least one weekly department head meeting in the Kansas City division. While ER--1 Revised was not to be 'displayed' to employees its contents were to be given out through the department heads by oral dissemination of the information to the employees. Staff employees were requested to pass the information on to the rank and file of employees. This was one of the customary methods used by Cities Service in disseminating information to employees of the division. In March 1963 Cities Service had printed and kept on hand a sufficient supply of cards captioned 'Employment Termination Card,' on which was provided a blank space for the number of weeks of severance pay due each employee.
Each of the seven plaintiffs knew about the severance pay plan. Four of them read it in the policy book. Plaintiff Kephart received knowledge of the plan from one of his superiors in 1962. Plaintiff Jones had heard of it through different employees. Plaintiff Hinkeldey first learned of the plan in January, 1964, when the Des Moines Regional Office was closed and the accounting facilities moved from St. Paul to Philadelphia, terminating jobs and giving rise to the payment of severance pay under the plan. At no time did the Employee Relations Office in Tulsa ever send 'anything' to the Kansas City office revoking or cancelling authority under ER--1 Revised. There was evidence that before the controversy in litigation there were no instances in...
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