Court Opinion

ID: 9444396
Source: CourtListenerOpinion
Date Created: 2023-08-03 20:59:45.968758+00
Date Added: 2024-06-11T17:29:51.360634
License: Public Domain

PARKER, Chief Judge
(dissenting).
Assuming the allegations of the complaint to be true, as we must on this ap*808peal, I do not think it can be said that the promise of defendant upon which plaintiffs rely was void for lack of consideration; and this is the only question before us. Plaintiffs were working for defendant pursuant to the terms of a collective bargaining agreement which provided for vacation pay and accumulated sick leave.1 They also had rights under a retirement plan which had been established by the company. The company was anxious to sell its bus line in High Point to a prospective purchaser and to this end the approval of the sale by the City Council of High Point was necessary. The allegation of the complaint is that in the course of negotiations with representatives of the City Council, the company agreed with the bargaining representative of plaintiffs that it would pay to plaintiffs a sum of money “equal to the pay they would receive for vacation pay and for sick leave” and the benefits to which they were then entitled under the retirement plan. It is further alleged that this agreement was accepted by the bargaining representative of plaintiffs, who thereafter continued to work for the company and cooperated with it “in making an orderly and successful transfer of its said operations and bus line to said purchaser, all in reliance upon said agreement.”
Consideration for the promise alleged was the agreement on the part of plaintiffs to accept it in settlement of their rights and equities with respect to sick leave, and vacation and retirement pay. Defendant has recognized their rights with respect to vacation pay; and that they had rights with respect to accumulated sick leave and retirement benefits is perfectly clear. These rights are almost invariably considered in fixing the wage rate and in a very real sense are earned just as wages are earned by the labor of the employee. They may not be ignored because an employee has not been sick or has not reached retirement age, for the amount to which the employee is, entitled thereunder is dependent upon length of service. All of this would be lost by a sale of the business to a new owner unless protected in some way in connection with the sale; and that such protection might be had was doubtless one of the reasons why the collective bargaining agreement provided that the employees be given 60 days notice of any sale of the business. Certainly, how such rights of the employees were to be dealt with in event of sale was a proper subject of bargaining and of a promise on the part of the employer. The acceptance of such promise on the part of the employees amounts to a promise on their part not to seek other means of-protecting their rights in the premises and is a sufficient consideration to support the promise of the employer. The mutual promises furnish the consideration for each other as in any other case of a settlement of rights which might give rise to controversy. Of course, any promise made to the bargaining representative of plaintiffs in settlement of rights under the collective bargaining agreement inured to their benefit. See J. I. Case Co. v. N. L. R. B., 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762; N. L. R. B. v. Highland Park Mfg. Co., 4 Cir., 110 F.2d 632, 638.
Consideration, however, does not consist necessarily of a payment or a promise. It may consist of any act or for*809bearance constituting benefit to the promisor or detriment to the promisee. A.L.I. Restatement of Contracts, sec. 75 et seq.; 12 Am.Jur., p. 584, sec. 91. Here the parties were operating under a valid collective bargaining agreement which entitled plaintiffs to certain accumulated sick benefits as well as vacation pay, and under the retirement plan of the company they were entitled to certain retirement benefits. The company was proposing to sell out its business to a purchaser with the resultant possibility that all of these benefits accumulated through service to the company might be lost. Plaintiffs would naturally oppose the sale and transfer unless their rights in these benefits were safeguarded, and their opposition would be a serious matter if manifested by striking or quitting work or by opposing the sale before the Council, whose approval was a necessary condition of its going through. It was of importance to the company, therefore, that the employees approve the sale and continue their services while it was being negotiated;2 and if as a means of securing the approval of the sale by the employees and their continued service pending its consummation the company promised to make payments to them on account of these accumulated benefits, consideration for the promise is to be found in the continuation of their service and their cooperation in bringing about the sale and the orderly transfer of the company’s business. I think that this unquestionably constituted consideration for the promise, but, apart from this, if the company secured their cooperation and continued service through the promise, it certainly ought not be heard, after the sale has been consummated, to say that the promise was void for lack of consideration. As said in section 90 of A.L.I. Restatement of Contracts :
“A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.”
It is argued that since the plaintiffs have been paid their wages for the services rendered after the making of the promise, the services rendered cannot constitute consideration for the promise. The answer is that, if the allegations of the complaint are accepted, plaintiff? were promised the amounts sued for in addition to the wages that they were paid and that the continued services constituted consideration for the promise as well as for the wages on the same principle as that which applies in the case of a bonus promised employees in addition to regular wages. See 35 Am.Jur., p. 502; Kerbaugh, Inc. v. Gray, 2 Cir., 212 F. 716; George A. Fuller Co. v. Brown, 4 Cir., 15 F.2d 672; Roberts v. Mays Mills, 184 N.C. 406, 114 S.E. 530, 28 A.L.R. 338; Scott v. J. F. Duthie & Co., 125 Wash. 470, 216 P. 853, 28 A.L.R. 328 and note. The employees were not bound to continue their service to the company; and, if they did continue as a result of the promise made to them, this was sufficient consideration to support the promise.
It is no answer to this to say that the company has paid the employees for vacation time and has arranged for the retirement benefits to be transferred so that they may apply to service rendered the purchaser of the business. The suit is on the promise alleged in the complaint; and the only question before us in the present posture of the case is whether on the pleadings and the facts as admitted that promise can be held void for lack of consideration. I do not think that it can be so held. I would remand the case for the taking of testimony without any expression of opinion on the facts.

. It should be borne in mind, in this connection, that the rights of the employees in the accumulated sick leave were a matter of substance and could not be ignored because they had not been sick. Under the provision relating to this matter, an employee was entitled' to only 10 days sick leave with pay during the first year of employment, but this was gradually increased to a maximum of 60 days in the case of employees of long service.
This right to be paid full wages for an absence of 60 days due to sickness was a valuable right and one which presumably had been taken into account in the negotiation of the wage rate. It would be lost to the employees upon sale of the bus line by the company, unless protected ■ in some way in connection with the contract of sale. The same was true with respect to vacation pay and their rights under the retirement plan.

. Nearly two months elapsed between the date of the promise and the consummation of the sale.