Court Opinion

ID: 9720781
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:41:23.436488+00
Date Added: 2024-06-11T13:05:09.188917
License: Public Domain

Dell, Chief Justice
(dissenting).
Plaintiff started to work for the defendant in 1941. At the end of each year he received a year-end wage dividend. This continued1 until defendant’s “Deferred Profit-Sharing Plan” was established. *565Shortly before this plan was adopted defendant’s president wrote to plaintiff, according to his uncontradicted testimony, inquiring whether plaintiff was willing to contribute a percentage of his income to the plan. He answered stating that he preferred to make his own investments. In 1957 the profit-sharing plan was put into effect, year-end wage dividends were no longer paid, and plaintiff continued his employment.
On December 29, 1958, defendant’s president wrote a letter to plaintiff stating:
“During these several years in which you have managed our St. Paul office your effectiveness has been excellent in directing the operating details of office, stockroom and service. In the field of sales leadership and direction there is much to be desired. You and we both anticipated this shortcoming when you took the position. We hoped that you might master this lack; but we must admit that you have not done so.
“So, we are asking that you turn over the position to one of our other men who has done especially well in sales direction, * * *.
“You have given your Company your best efforts in the past years. For this reason we want to help you all possible in the next few months while you seek to readjust yourself to' whatever work you may choose. Of course we can recommend your honesty, your willingness to work, your abilities in all but sales direction, in the highest terms to any other prospective employer.
“Not only will you receive your full compensation of all kinds due you under your regular manager plan for 1958; but you will receive more if you do not enter into competition with us or do anything detrimental to our Company’s interest.” (Italics supplied.)
The letter then went on to say that he could work for the defendant in some other capacity in St. Paul or elsewhere and that the company had decided to continue his salary for a period of 4 months if he accepted a position elsewhere which was not in competition with the defendant.
It is apparent from this letter that plaintiff had been a good employee in all respects other than in “sales leadership.” It is also apparent that *566the defendant was anxious that plaintiff obtain employment elsewhere than in a competitive business and it seems quite clear to me that the statement in the president’s letter “but you will receive more if you do not enter into competition with us” had reference to defendant’s vested interest of $2,562.88 in the “Deferred Profit-Sharing Plan” since there was nothing else which plaintiff had coming.
Finally plaintiff informed defendant that he had decided to go into business for himself in a line similar to defendant’s and inquired whether it would be possible for him to sell defendant’s products. This was a reasonable request since plaintiff had worked for the defendant for nearly 18 years and was thoroughly familiar with its products. This, defendant refused, promptly discharged him, and cut off his salary stating: “We then discontinued the salary also as soon as you notified us that you thought it best to go into business for yourself in line similar to ours.” In the same letter his attention was called to the letter of its advisory committee informing him that he “had a fully vested interest of $2,562.88” in the Deferred Profit-Sharing Plan and that these funds were to be distributed to him at the rate of $100 a month commencing October 1, 1976.
Plaintiff had written defendant’s president at Rochester, New York, stating that he would appreciate it if the money owing him under the profit-sharing plan was paid without further delay. He further said: “Surely you must agree that I acted in good faith * * *. I feel that I deserve somewhat better treatment than that accorded a discharged inefficient employ, rather than one who has served your Company loyally and faithfully for the past eighteen years.”
Since nothing was done, plaintiff instituted this action to recover $2,562.88. He was then 47 years old, needed the money in the profit-sharing plan, and claimed that the action of the defendant and its advisory committee, in withholding payment, was arbitrary, capricious, and in bad faith. He also claimed that they refused to turn the money over to him, not because they wanted to invest it for him, but because they wanted to keep it from him so as to prevent him from engaging in a competitive business with the defendant. On the other hand, defendant and its advisory committee took the position that it was in the best interests of the plaintiff to defer payment until plain*567tiff had reached 65, the age of retirement. They took this position notwithstanding that they were compelled to concede that in cases where employees severed their employment with defendant with an interest in the profit-sharing plan of less than $2,000, these sums were paid since amounts of that size were too insignificant for use in working out an annuity or some other retirement plan. But in the instant case, although plaintiff’s interest in the profit-sharing fund was only slightly in excess of that figure, and although a .strained feeling between them existed, defendant took the untenable position that deferring payment to the plaintiff for 18 years was in his best interests. It appears clear to me that the action of the defendant and its advisory committee in withholding, until plaintiff reaches age 65, the amount of $2,562.88 due him under the Deferred Profit-Sharing Plan is arbitrary and capricious, if not fraudulent, and that it was engendered in bad rather than in good faith.
At the very outset, it seems to me that, when directing plaintiff to turn over his position to another of its employees, defendant cunningly offered him 4 months’ salary for no other reason than to induce him to procure employment elsewhere not competitive with it. But just as soon as he informed it that he intended to engage in a similar line of business, defendant’s plan and scheme, and that of its advisory committee, came into full view, and he was promptly discharged. His vested interest in the profit-sharing plan was set aside and ordered withheld for 18 years until he reaches the age of 65. It is then payable to him only at the rate of $100 a month. At the same time and as what appears to me to be a part of the .same scheme and plan, the advisory committee informed him that if there was a change in circumstances that would justify the committee in reconsidering action, the plaintiff should not hesitate to write it. This is not the case of a defendant acting in good faith in the interest of one of its regular employees who is no longer employed or has retired. It is the case of a defendant who- discharged an employee after years of service, fearful of his entering into a competitive business — the activities of a defendant who, lacking good faith, is endeavoring to withhold from that employee the money necessary to enable him to engage in a competitive enterprise. It is the case of a defendant who, for no other reason than lack of “sales leader*568ship,” has discharged an employee, and with its eye on the dollar, is endeavoring to stop him from engaging in competitive lines in order to earn his livelihood. Since, in my opinion, its actions and conduct are clearly arbitrary and capricious, if not fraudulent, the lower court should be reversed. I, therefore, dissent.