Norman v. Southern Bell Tel. & Tel. Co.
| Decision Date | 13 March 1959 |
| Citation | 322 S.W.2d 95 |
| Court | United States State Supreme Court — District of Kentucky |
| Parties | D. B. NORMAN, Appellant, v. SOUTHERN BELL TELEPHONE & TELEGRAPH COMPANY, Appellee. |
William E. Scent, Michael J. Clare, Clare & Scent, Louisville, for appellant.
Lively M. Wilson, Stites, Wood, Helm & Peabody, Louisville, Rexford L. Hawkins, Atlanta, Ga., for appellee.
Plaintiff, D. B. Norman, has been in the employ of defendant since August 20, 1923. On or about October 21, 1955, after thirty-two years of service, he made a request for retirement with pay pursuant to a 'Plan for Employees' Pensions, Disability Benefits, and Death Benefits' (herein called 'the Plan'), which defendant originally adopted in January, 1913, and has more or less continuously held out to its employees as one of the benefits of their employment.
We shall herein refer to Norman as 'plaintiff' and to the defendant, Southern Bell Telephone & Telegraph Company as 'the company'. The company refused to grant plaintiff a pension. The lower court upheld the company's action, and this appeal is from that ruling.
Section 3(7) of the Plan provides that the expense of administering it shall be borne by the company, and Section 4(9), together with other provisions of the Plan, places the cost of pensions and sickness and death benefits on the company. Its employees are not required to make any contribution to the Plan and plaintiff has never done so.
Section 3(1) of the Plan provides that it is to be administered by the Employees' Benefit Committee, appointed by the board of directors of the company, with headquarters in Atlanta, Georgia. As an aid to more efficient administration of the Plan, a committee has been set up in each state in which the company operates, including Kentucky, known in this state as the Kentucky Benefit Committee, to review matters arising under the Plan and to make recommendations to the Employees' Benefit Committee. Only the latter, however, is authorized to grant or deny applications for early retirement. In addition to the general authority to administer the Plan, Section 3(3) provides: 'It (the Employees' Benefit Committee) shall determine conclusively for all parties all questions arising in the administration of the Plan.'
The Plan provides for three classes of pensions. Section 4(1)(a) provides, so far as male employees are concerned, for service pensions upon request by the employee when he has reached sixty years of age and his term of employment has been twenty years or more. Section 4(1)(c) provides for disability pensions under the terms set forth in that section. Neither of these types of pension is involved in this proceeding. Section 4(1)(b), under which plaintiff made his request for a service pension, reads:
'(b) Any employee whose term of employment has been thirty years or more, or any male employee who has reached the age of fifty-five and whose term of employment has been twenty-five or more years, or any female employee who has reached the age of fifty years and whose term of employment has been twenty-five or more years may, if the case is approved by the Committee as appropriate for such treatment, be retired from active service and, upon such retirement, shall be granted a service pension.' (Emphasis ours.)
Plaintiff's request for a pension was initiated by a letter, dated October 21, 1955, addressed to W. D. Bales, the district plant manager. The letter stated his desire to retire because 'I have a chance to go into business for myself and would like to leave the company'. When he submitted his request for early retirement his two superiors, H. L. Morton, the plant manager, and Bales, the district plant manager, wrote letters which accompanied his request, recommending that the retirement be granted. These letters, together with plaintiff's letter and formal application, were forwarded to the Kentucky Benefit Committee by Sam H. Ridgeway, the Kentucky plant manager, who recommended the request for retirement should be denied.
The Kentucky Benefit Committee, which apparently has no official status in the Plan itself but acts merely as a screening agency, considered plaintiff's request for a pension but upon the adverse recommendation of Ridgeway, the Kentucky plant manager, also arrived at the conclusion that his Benefit Committee, the official committee under the Plan, concurred in the action of the Kentucky Benefit Committee and refused to approve a pension for plaintiff.
Plaintiff first contends the company has failed to adopt reasonable, fair and uniform standards for determining eligibility for retirement under Section 4(1)(b) and that he would be entitled to retirement if uniform standards were applied to his case in a nondiscriminatory manner.
Allene Gray, who is Secretary of the Kentucky Benefit Committee, testified that committee, when it made its adverse recommendation, considered not only the formal application on the printed form supplied by the company, but also the handwritten request of plaintiff and the letters of Bales and Morton hereinabove mentioned. R. V. Davis, Secretary of the official Employees' Benefit Committee, testified that all these matters were also presented to that committee. In essence, he gave as the reasons for the rejection of plaintiff's request, first, the fact that his services were adequate and still needed by the company, and, second, that the committee did not consider there was a sufficient hardship imposed upon him to justify the loss of his services to the company.
He also testified that committee had adopted certain standards with respect to early retirement. According to him, a 'Memorandum of Retirement and Service Pensions' had been circulated around November 7, 1955, in which it was, in effect, stated that the committee would consider early retirements in these situations: First, where an employee had been 'definitely superannuated' and his efficiency was so unsatisfactory that his service in the same or a different job could no longer be justified; second, where an employee was so physically disabled that reassignment to other duties would not be practicable; third, where an employee's job had been eliminated because of technological changes and he could not be reassigned; and fourth, where an employee's services were terminated by the company itself under circumstances where the committee could justify 'handling the case as a retirement rather than a discharge.'
In telling how the Employees' Benefit Committee considered these matters,...
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...unless there is a showing that the company board acted arbitrarily, capriciously, fraudulently or in bad faith. Norman v. Southern Bell Tel. and Tel. Co. (Ky.) 322 S.W.2d 95; Lano v. Rochester Germicide Co., 261 Minn. 556, 113 N.W.2d 460; Smith v. New England Tel. and Tel. Co., 109 N.H. 172......
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...the payment of early retirement benefits. See Gallo v. Howard Stores Corp., 250 F.2d 37, 38 (3d Cir. 1957); Norman v. Southern Bell Telephone & Telegraph Co., 322 S.W.2d 95 (Ky.1959). Concededly, the grant or refusal of consent to early retirement is discretionary with the employer. Teren v......
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