Rynar v. Ciba-Geigy Corp.

• Decision Date: 30 March 1983
• Docket Number: No. 82 C 2866.,82 C 2866.
• Citation: 560 F. Supp. 619
• Parties: Robert RYNAR, Plaintiff, v. CIBA-GEIGY CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

560 F. Supp. 619

Robert RYNAR, Plaintiff, v. CIBA-GEIGY CORPORATION, Defendant.

No. 82 C 2866.

United States District Court, N.D. Illinois, E.D.

March 30, 1983.

Leonard S. Goslawski, Lewis, Overbeck & Furman, Chicago, Ill., for plaintiff.

Charles B. Wolf, Barbara J. Stob, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for defendant.

MEMORANDUM OPINION

WILL, District Judge.

Robert Rynar, a former employee of the defendant Ciba-Geigy Corporation (Ciba), alleges that Ciba owes him $23,375.04 in severance pay and other benefits¹ as a result of Ciba's termination of his employment. Our jurisdiction is based upon diversity of citizenship. In an earlier memorandum opinion, we denied Ciba's motion to dismiss Rynar's complaint. Following discovery (including the taking of Rynar's deposition), Ciba brings this motion for summary judgment. (After the announcement of this opinion, we granted Rynar leave to add a second count, based on the Employee Retirement Income Security Act of 1974, as amended. Rynar's ERISA count is not a subject of Ciba's current motion, and therefore is not addressed in this opinion.) For the reasons stated below, we grant that motion.

I.

The following facts are not in dispute. Rynar was employed by the Communication Equipment and Engineering Company (CEECO) from October 12, 1964 until October 1, 1978, when REN Plastics (REN), which was owned by Ciba, purchased CEECO. (Pl.Dep. at 20, 28, 33) Rynar accepted Ciba's offer (made by Richard B. Peterson, General Manager of REN) to continue in his job as site manager for the Melrose Park, Illinois, and Lancaster, Wisconsin, facilities formerly owned by CEECO. (Pl. Dep. at 38, 41)

Rynar did not enter into a written contract with either REN or Ciba at any time. (See Pl.Dep. at 42, 60) Nor did he receive an employee handbook at any time. (Pl. Dep. at 104-05) Both Rynar and Peterson recall discussing Rynar's working for REN, but neither can recall discussing the specific subject of severance pay before Rynar's acceptance of Peterson's offer. (Pl.Dep. at 39-45; Peterson Aff. at ¶¶ 12 and 13) Within a short time after becoming an employee of REN, Rynar discussed benefits with REN's personnel manager, Loretta Denfield. (Pl.Dep. at 39-45) Denfield told Rynar that REN tended to honor CEECO service for purposes of computing vacation benefits and that employees would be entitled to receive two weeks' pay in lieu of notice upon termination. (Pl.Dep. at 45-48) Regarding severance pay, Rynar recalls that Denfield told him only "that it was available as one of the benefits" but did not discuss with him the qualifications or formula for receiving it. (Pl.Dep. at 50-51) After these conversations with Denfield in 1978, Rynar was not told of any change in these benefits programs. (Pl.Dep. at 108)

In April of 1979, Denfield sent Rynar a copy of Ciba's severance policy because he would be responsible for administering it with respect to the closing of the Melrose Park facility. (Pl.Dep. at 120; Dep.Ex. 1) This policy had been in effect since June 6, 1972. (Dep.Ex. 1) It was revised effective March 15, 1981, in minor and immaterial respects.² Although Rynar read the policy, he does not recall discussing it with Denfield or anyone else. (Pl.Dep. at 122-23) Rynar knew that the policy was part of a larger "personnel policy manual" but he never had or read any other part of that manual. (Pl.Dep. at 139) After the Melrose Park plant was closed in September of 1979, Rynar continued with Ciba in various other positions. (Pl.Dep. at 51-59)

The portion of Ciba's 1981 personnel policy manual which sets forth Ciba's policies regarding "termination" of employees recognizes various ways in which employment might end. The policy distinguishes among and defines seven kinds of "termination" (resignation, separation for reasons other than cause, separation for cause, discharge, normal retirement, early retirement, and disability retirement), and states that "all terminations of employment from CIBAGEIGY Corporation shall be classified" under one of those seven labels. Section 1.2 of the policy defines "separation for reasons other than cause" as:

Initiated by the Company for reasons beyond the control of the employee (e.g., reorganization, budgetary cutback, lack of work, relocation of work station beyond normal commuting range).

In section 2.5 (and its subsections), Ciba's personnel policy provides for severance pay:

2.5 Severance Pay

* * * * * *

2.5.1 In appropriate cases ... terminating employees with a minimum of one year of permanent, full-time service shall be eligible for severance benefits as follows:

* * * * * *

2.5.1.2 Separation for Reasons Other Than Cause

Two weeks' pay for each year of Company service: maximum payment —52 weeks. (Note: See paragraphs 2.5.4 and 2.5.6)

Section 2.5.4 of the policy provides that

if an employee scheduled to be separated for reasons other than cause is offered a comparable position with CIBA-GEIGY Corporation and declines the offer, the severance pay will be reduced by one-half. If, however, the employee would be required to relocate in order to accept the position and chooses not to do so, there would be no reduction in severance pay.

The policy defines "comparable position," for the purpose of section 2.5.4 as "a position at the same or higher Hay pay? point or salary grade level with no reduction in salary." Section 2.5.6.

Finally, section 2.9.2 of the policy provides that

this policy shall not be applicable in any special situation (such as the relocation of a major Operating Unit) where the Corporate Management Committee deems it necessary to establish a separate policy applicable to that situation only.

In November or December of 1980, Rynar received through the mail a certificate of service, attached to his Complaint as Exhibit B. (Pl.Dep. at 128-29) The certificate bears the name "CIBA-GEIGY" in bold print along one margin and states: "Robert Rynar has completed 15 years of employment in this Company. In recognition of faithful and loyal service, this Certificate is awarded." The certificate was signed by Peterson (General Manager of REN) over the title "Site Manager." (Peterson Aff. at ¶ 8; see Exhibit B to Complaint) No letter accompanied the certificate, but Rynar discussed the certificate with Andy Anderson and Hugh Allen, two of his supervisors. (Pl.Dep. at 129-30, 145-46) Rynar asked Anderson on one occasion whether the certificate meant that "Ciba has bridged our seniority for severance purposes." Anderson replied, "It looks like it." (Pl.Dep. at 130)

Rynar's discussion with Hugh Allen occurred later, when Rynar became aware that Ciba was selling REN. At that time, Rynar was unsure whether his employment with Ciba would continue after the sale and expressed his concern to Allen. Allen told him, "You have got a CIBA certificate.... If they recognize your time ... you have got a full house if you were playing poker." (Pl.Dep. at 146-48)

Rynar also talked with other Ciba employees who had come to Ciba from CEECO, but none of them had any specific and definitive information as to the meaning of the certificate. (Pl.Dep. at 133-38) Rynar did not ask personnel officials of either REN or Ciba what the certificate meant regarding his eligibility for severance benefits if he lost his job. Nor did he inquire of officials higher than his own supervisors, Allen and Anderson, how his length of service would be computed for the purpose of severance pay.

Ciba claims that its certificates to employees were merely part of an employee relations program and had no particular significance:

Defendant included service with predecessor companies which it had acquired for certain limited purposes, i.e., its service awards program and vacation entitlement. The service awards treatment originated in Glens Falls, New York, as a continuation of a program originated by such a predecessor company, to build employee morale at a modest cost. It was recognized that the program could not be continued effectively without taking predecessor service into account. The program was then extended to other groups at CIBA-GEIGY on the same basis.

Defendant's Answers to Plaintiff's Interrogatories, No. 13, reprinted in Defendant's Reply Memorandum at 7; see also Defendant's Initial Memorandum at 15 n. 8.

In addition to his certificate of service, Rynar notes that some of the data on a form labelled "Personnel Profile" refers to time when he was employed by CEECO. For example, this form lists Rynar's "Date of Employment" as 10/27/78, but then lists his "Original Hire Date" as 10/12/64. Additionally, a box marked "YRS. CSVC." (apparently, years of credited service) indicates that Rynar had 18 years of credited service. See Exhibit 5 to Plaintiff's Memorandum.

Rynar was aware of the reference, in section 2.9.2 of the severance policy to "any special situation," but had no discussion about it with anyone at Ciba. (Pl.Dep. at 143) Rynar also testified that it was his understanding that Ciba reserved the right to change the policy at any time.³ (Pl.Dep. at 199)

During the summer of 1981, a portion of the REN operation was sold to Charles Industries and another portion was sold to Communications Technology Corporation (CTC). (See Pl.Dep. at 72-73) On July 28, 1981, Rynar was informed by Stan Kase that Rynar's employment with Ciba was terminated immediately. Although none of the documents brought to our attention specifically classifies Rynar's termination as "for reasons other than cause," Ciba does not object to Rynar's claim that that is the appropriate classification, under Ciba's personnel policy, of Rynar's termination of employment.

Kase told Rynar that he was entitled to unused vacation pay, which Rynar later received. (Pl.Dep. at 82-83, 163) Kase also told Rynar that he would receive $3,167.79 in severance pay and $1,578.31 in pay in lieu of notice if he was not employed by Charles Industries. (Pl.Dep. at 163-65; see Dep.Ex. 4) Rynar responded to...