Morosetti v. Louisiana Land & Exploration Co.

537 A.2d 823, 371 Pa. Super. 68, 1987 Pa. Super. LEXIS 9752
CourtSuperior Court of Pennsylvania
DecidedDecember 31, 1987
DocketNos. 01547 and 01580
StatusPublished
Cited by1 cases

This text of 537 A.2d 823 (Morosetti v. Louisiana Land & Exploration Co.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morosetti v. Louisiana Land & Exploration Co., 537 A.2d 823, 371 Pa. Super. 68, 1987 Pa. Super. LEXIS 9752 (Pa. Ct. App. 1987).

Opinion

MONTGOMERY, Judge:

The two appeals in this case arise from a judgment of the lower court which ordered that the Plaintiffs and the class members they represented were entitled to severance pay from the Defendants. The Plaintiffs and other class members were former salaried employees of the Defendants, and the Plaintiffs’ claims were based upon an alleged severance pay policy of the Defendants. The case was tried before a jury, but at the conclusion of the presentation of all evidence, the lower court directed a verdict in favor of the Plaintiffs on the issue of both liability and damages. The verdict awarded severance pay to each member of the [71]*71Plaintiff class, in the amount of one week of pay for each year of service, for up to a maximum of twelve (12) weeks.

Following the denial of post-trial motions, the Defendants filed an appeal to our Court, at No. 01547 Pittsburgh, 1986, asserting that the lower court erred on several grounds in granting the claim for severance pay benefits. The Plaintiffs subsequently filed a cross-appeal, at No. 01580 Pittsburgh, 1986, urging that the lower court should have determined that they were entitled to a maximum of twenty-six (26) weeks of severance pay, rather than twelve (12) weeks. Further, the Plaintiffs questioned the rate of weekly pay awarded, and contended that the lower court should have also awarded them reasonable attorney fees against the Defendants.

The facts of the case are set forth accurately in the Opinion of the lower court. In brief, the Plaintiffs and the class they represent were former salaried employees of the Defendants until the Defendants sold various assets and facilities to a group headed by a former officer and management official of one of the Defendants. This sale occurred in May, 1984. All of the Plaintiffs and those in the class they represent were hired by the new owners, and in essence, continued to perform job functions such as those which each had performed during his or her prior employment with the Defendants.

During their time of employment by the Defendants, none of those in the Plaintiff class was represented by a labor organization, and none was employed pursuant to the terms of a collectively bargained labor agreement, nor any other written contract of employment. However, the Defendants had for many years maintained various employment policies which were applied to salaried employees prior to the sale. Such policies were generally known to such employees, and were maintained in written form by the Defendants, in their personnel office, with copies sent to various individuals with supervisory authority over the employees in the Plaintiff class. A severance pay program or [72]*72policy had been maintained by Defendants for several years prior to the asset and facility sale.

With this brief recitation of the general factual background of the case, we shall address the issues raised in these appeals. Each appeal will be examined separately.

Appeal of the Defendants (No. 01574 Pittsburgh, 1986)

The initial contention raised by the Defendant employers in this case is that the Plaintiffs and other class members had no right to receive a severance benefit because the policy of pension payments was never disseminated to employees. The Defendants maintain that because the policy of paying severance payments to employees was never directly published to employees, there was no meeting of the minds on such a policy, and therefore no contractual obligation by the employers. We find no merit in that argument.

The employers’ policy of paying severance benefits to employees had been in existence for many years, apparently since the early 1970’s. It was well-known that salaried employees, like those in the Plaintiff class, had received severance payments in the past when their employment relationship with the employer, or its related entities, was terminated. While some employees may have had some misconceptions as to some details of the severance pay benefit, almost all of them were aware that a right to severance payments existed as a company policy. The employment policy manual which set forth the severance pay formula was available for review in the personnel office, or at the work station of various supervisors, in the event that any employee had a question about the severance pay plan, or any other employee benefit. The evidence clearly established that despite the lack of specific publication of the fact by Defendants, the existence of a severance pay entitlement was a matter of wide knowledge among employees entitled to receive that benefit.

[73]*73In these circumstances, we reject the Defendants’ assertion that the employees in the Plaintiff class had no right to severance on the basis that the terms of the severance pay policy were not disseminated to them, or that there was no meeting of the minds concerning the subject. Both of the parties have addressed numerous case precedents to our attention, and the lower court opinion has also noted a number of case precedents on the point of an entitlement of an employee to severance pay or other fringe benefits, in the absence of a written contract providing for such benefits. The Defendant employers have acknowledged the existence of legal precedent creating an obligation for the payment of such benefits by an employer, where the existence of the benefit entitlement was disseminated to employees. In the circumstances of this case, we find that there is ample evidence that there was broad awareness among the affected employees of the existence of the Defendants’ policy of paying severance pay to qualified terminated employees. Information about this benefit had obviously been disseminated among them, and they understood that it was a part of the conditions of their employment by the Defendants. Accordingly, we reject the Defendants’ first contention of error.

We next address the Defendants’ claim that there was no severance of employment with regard to the employees in the Plaintiff class, because each became an employee of the new owners of the assets and facilities which were purchased from the Defendants. In support of this argument, Defendants point out that in the past, under the existing severance pay policy, some employees did not receive severance pay when they were transferred from one employing entity to another as the ownership of facilities was transferred, or when there were transfers between related facilities owned by a single employing entity. Further, Defendants cite case precedent, from other jurisdictions, wherein severance pay was denied employees when their former employer sold their place of employment to a successor employer who immediately stepped in and continued the employment and all operations without any interruption in production. Upon [74]*74the factual record before us, we cannot agree that there was a lack of severance of employment in this case such as would disqualify those in the Plaintiff class from receiving severance pay.

While the employees involved in this case essentially continued to be employed at the same facilities where each had worked during his or her time of employment with the Defendants, the purchasers of the assets and facilities in this case hired such individuals as new employees. There was no consideration by the new employer, with regard to any benefit of employment whatsoever, based on the employees’ prior employment by the Defendants.

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Cite This Page — Counsel Stack

Bluebook (online)
537 A.2d 823, 371 Pa. Super. 68, 1987 Pa. Super. LEXIS 9752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morosetti-v-louisiana-land-exploration-co-pasuperct-1987.