Opinion ID: 504453
Heading Depth: 3
Heading Rank: 2

Heading: Enactment of a Special Separation Pay Policy

Text: 27 In October 1980, Diamond Shamrock adopted a Divestiture Policy which did not diminish or change in any way the separation pay due an employee who loses his/her job with Diamond Shamrock and is not offered employ with the purchasing company. However, the new policy explicitly specified that employees who, upon sale of their division, are offered, and refuse work with the purchasing company, will not be eligible for separation pay. The district court found both that Diamond Shamrock did not conceal its Divestiture Policy from Employees and that the policy merely made explicit the company's consistent past interpretation of its separation pay plan. 11 28 Employees maintain that this finding does not comport with the facts. First, they point to the heading CONFIDENTIAL emblazoned across the top of the document setting forth the Divestiture Policy. This, they maintain, proves that Diamond Shamrock improperly kept the policy hidden. Second, they dispute the district court's determination that the Divestiture Policy merely states explicitly what the original separation pay policy represents implicitly. They argue that contrary to what Diamond Shamrock argued and the district court found, the policy's purpose was not to provide unemployment benefits but rather to give notice, or pay in lieu thereof, when an employee is terminated. They point out that the separation pay policy draws no distinction between a situation where an employee, immediately following termination, is offered a job by an unrelated employer, and one in which an employee receives an offer from the purchaser of the acquired divested business. From this observation, they reason that the original policy does not support a reading whereby employees accepting work with the purchasing company are denied separation pay, while those accepting work with an unrelated company remain eligible. Thus, Employees argue, the 1980 policy modifies and changes the initial separation pay policy and constitutes a secret amendment which should not be given effect by this court. 29 We reject these arguments. First, the fact that the 1980 Divestiture Policy was stamped CONFIDENTIAL does not advance Employees' case. At oral argument, Diamond Shamrock's counsel pointed out that the document explicating the new Divestiture Policy was marked confidential because it was an interoffice memo being circulated among the company's staff prior to general announcement. That an interoffice memo setting forth the tentative policy was marked confidential does not mean that the company intended the policy be kept secret. Second, that the original policy allows for payment of benefits to an employee offered employment by an unrelated third party employer does not require a similar allowance to an employee offered employment by a purchaser of a Diamond Shamrock division. Nor does it disprove Diamond Shamrock's contention that the purpose of the policy was to provide unemployment benefits. Though Diamond Shamrock may intend its policy apply only to workers suffering actual involuntary employment, it cannot know or predict how long a terminated employee will remain unemployed. Thus, Diamond Shamrock, in adopting a blanket policy applicable to all employees, assumes the risk that an employee will receive an early offer rendering the separation pay unnecessary. Where, as in a divestiture situation, an employer knows that an employee will receive an immediate offer, it is eminently reasonable to exclude those employees from separation pay. The district court properly viewed the 1980 Divestiture Policy as an explanatory addendum to the separation pay policy, and properly found Diamond Shamrock's interpretation of that policy reasonable.