Owens v. Press Pub. Co.

• Decision Date: 30 January 1956
• Docket Number: No. A--59,A--59
• Parties: Arthur J. OWENS, Bertram S. Wilson, Irma Lewallen, Charles S. Shapiro and William S. Peifer, Plaintiffs-Respondents and Cross-Appellants, v. PRESS PUBLISHING COMPANY, Defendant-Appellant and Cross-Respondent.
• Court: New Jersey Supreme Court

Page 537

20 N.J. 537

120 A.2d 442

Arthur J. OWENS, Bertram S. Wilson, Irma Lewallen, Charles

S. Shapiro and William S. Peifer, Plaintiffs-Respondents and Cross-Appellants, v. PRESS PUBLISHING COMPANY, Defendant-Appellant and Cross-Respondent.

No. A--59.

Supreme Court of New Jersey.

Argued Dec. 19, 1955.

Decided Jan. 30, 1956.

John H. Yauch, Jr., Newark, for defendant-appellant and cross-respondent (John O. Bigelow and James E. Fagan, Newark, of counsel; Gilhooly, Yauch & Fagan, Newark, attorneys).

The opinion of the court was delivered by

HEHER, J.

The essential question here concerns the meaning of a severance-pay provision of a collective bargaining agreement made by the defendant Press Publishing Company, the publisher of a newspaper in Atlantic City, New Jersey, and the Newspaper Guild of Philadelphia and Camden, a voluntary association affiliated with the American Newspaper Guild, C.I.O., as the exclusive collective bargaining representative of all editorial, news, photographic and art department employees of the Publishing Company. The first such agreement was made October 23, 1944, for a term of one year, following the certification of the Guild's local unit as the bargaining agent of defendant's employees pursuant to the National Labor Relations Act, 29 U.S.C.A. § 159; and there were successive agreements thereafter until the last made November 30, 1950, for a term expiring August 22, 1952.

All the plaintiffs were employees of defendant in its editorial department; all but Lewallen entered defendant's employ during the subsistence of one of these collective bargaining, agreements; Lewallen joined defendant's staff in 1935 and had been continuously in its employ when, in 1944, the Guild and defendant made the first such agreement.

The final agreement made in 1950, as just said, embodied this severance-pay clause, Article 20, of the same general purport as those that had gone before:

'When an employee is discharged for any reason other than gross misconduct, he shall be paid, in addition to any sum otherwise due him, one week's pay for each six (6) months of continuous service, or major fraction thereof, for a period of twelve (12) years, up to a maximum of twenty-four (24) weeks' pay.'

And Article 19(a), entitled 'Dismissals,' provided:

'There shall be no dismissals except for good and substantial cause which shall include: dishonesty, wilful neglect of duty and self-provoked discharges. Publisher agrees to give employees dismissed for causes other than those listed above, two weeks' advance notice of dismissal in addition to stated severance pay.'

Pursuant to Article 27(a) of the collective bargaining contract made November 20, 1950, the Guild on June 19, 1952 notified the defendant employer of its desire to 'negotiate' specified 'changes in the provisions' of the agreement; and in accordance with section 8(d) of the Labor-Management Relations Act, 29 U.S.C.A. § 158(d), the Guild on the ensuing July 22 advised the employer of its 'intention to terminate on August 23, 1952, the collective bargaining agreement between us,' and proposed a conference 'for the purpose of negotiating the contract modifications we have heretofore proposed.' The negotiations failed; and their contractual collective bargaining relations ended when the then current contract expired by force of its own limitation.

Plaintiffs remained in defendant's employ until they were severally discharged in January, February and May 1953, for reasons other than gross misconduct, it is conceded; they were each paid the wages or salary due for the preceding week and, in addition, two weeks' wages or salary in lieu of notice of dismissal. Lewallen was also paid two weeks' wages as accrued vacation pay, and ten weeks' wages as severance pay. But the other plaintiffs were not given severance pay; and in this action they all seek recovery of such pay calculated at the rate of one week's wages or salary for each six months of the particular plaintiff's employment, allowing in Lewallen's case credit for the payment made.

The Law Division of the Superior Court, Judge Leonard sitting, 34 N.J.Super. 203, 111 A.2d 796 (Law.Div.1955), gave summary judgment in favor of each plaintiff for severance pay computed according to the periods of their respective employments terminating on the expiration of the last collective bargaining agreement, August 22, 1952, as 'earned and accrued,' 'only the time of payment' being 'postponed to the time when they were discharged, there being no claim that they were discharged for gross misconduct,' the refusal of which would constitute a 'forfeiture' of 'earned and accrued rights.'

There are cross-appeals to the Appellate Division, certified here for decision on our own motion. Defendant challenges the allowance of severance pay; plaintiffs complain of the disallowance of such pay according to the particular plaintiff's period of service after August 22, 1952 until the employment was terminated by dismissal.

I.

The employer's point is that the 'rights created and arising under a collective bargaining agreement do not extend beyond the term of the contract'; and the right of the plaintiffs here to severance pay 'in the event of discharge ended when the collective contract terminated, August 22, 1952,' and was not a 'vested right,' and since the plaintiffs 'were not discharged until several months later, they are not entitled to severance pay.'

The ultimate purpose of a collective bargaining agreement is a common understanding on the terms and conditions of labor; and, in the quest for the common intention, as with other contracts, the relation of the parties, the attendant circumstances, and the objects they were striving to attain are necessarily to be regarded. Cameron v. International Alliance of Theatrical Employees and Moving Picture Operators, 118 N.J.Eq. 11, 176 A. 692, 97 A.L.R. 594 (E. & A.1935); Ibid., 119 N.J.Eq. 577, 183 A. 157 (E. & A.1936); certiorari denied 298 U.S. 659, 56 S.Ct. 681, 80 L.Ed. 1385 (1936); Mantell v. International Plastic Harmonica Corporation, 141 N.J.Eq. 379, 55 A.2d 250, 173 A.L.R. 1185 (E. & A.1947); Harker v. McKissock, 7 N.J. 323, 81 A.2d 480 (1951), rehearing denied 8 N.J. 230, 84 A.2d 723 (1951;); Atlantic Northern Airlines v. Schwimmer, 12 N.J. 293, 96 A.2d 652 (1953); Kennedy v. Westinghouse Electric Corporation, 16 N.J. 280, 108 A.2d 409 (1954). In a word, the judicial interpretive function is to consider what was written in the context of the circumstances under which it was written, and accord to the language a rational meaning in keeping with the expressed general purpose. Casriel v. King, 2 N.J. 45, 65 A.2d 514 (1949). Where the 'principal purpose' of the parties is found, 'further interpretation of the words of contract should be such as to attain that purpose, if reasonably possible'; preliminary interpretation may clearly show that parties' 'primary purpose and end to be attained; and this at once reacts effectively in the detailed interpretation of subsidiary provisions and of particular words and specific acts'; when it becomes clear that the parties 'intended to produce a certain factual result, interpretation should be affected by reasonable and necessary implications, so that the legal effect then given to the instrument will be such as to attain the intended factual result'; a court 'may thus be able to realize the aims and purposes of the parties, even though their express words would otherwise be interpreted differently and would produce a different legal effect.' Corbin on Contracts, sec. 545.

The employer invokes System Federation No. 59, etc. v. Louisiana & A.R. Co., 119 F.2d 509 (5 Cir., 1941), certiorari denied 314 U.S. 656, 62 S.Ct. 108, 86 L.Ed. 526 (1941), holding that collective bargaining agreements do not 'extend rights created and arising under the contract, beyond its life, when it has been terminated in accordance with its provisions,' and the 'rights of the parties to work under the contract are fixed by the contract,' and they 'persist during, they end with, its term'; and Paterson Parchment Paper Co. v. International Brotherhood of Paper Makers, 191 F.2d 252 (3 Cir., 1951), certiorari denied 342 U.S. 933, 72 S.Ct. 376, 96 L.Ed. 694 (1952), to the same effect. Neither of these cases is in point. The question posed in the first was whether seniority rights created by such a contract 'persist during and only during its term, or whether they indefinitely continue to exist after it has been abrogated, and the relations of employer and employee are no longer fixed and being carried on, under the contract, but for many years under rules, promulgated by the company, and later under a contract between the company and the union which affirms it 'covers all understandings now in effect"; the second was an action for damages brought by the employer against the union for an alleged breach of a collective bargaining agreement, by a strike that closed the plant, and it was found that appropriate notice of termination of the contract was given, and then suspended by negotiations toward a new contract, but when the effort ended in failure, the obligation not to strike ceased to exist. These considerations, as we shall see, have no relation to the employee's right, upon dismissal from his employment, to severance pay which has accrued during the subsistence of a terminated collective bargaining agreement.

The doctrine of vested and contingent rights is invoked, citing Carroll v. City of Newark, 108 N.J.L. 323, 158 A. 458, 79 A.L.R. 509 (E. & A.1932), and Barrett v. Barrett, 134 N.J.Eq. 138, 34 A.2d 579 (Ch.1943). It is said in argument that the right to severance pay 'was subject to the happening of an uncertain event, namely, their dismissal without sufficient cause,' and 'Clearly their right had not vested when the collective contract had expired, for they might die while still in defendant's employ, they might resign, they might be...