recognizing the generally accepted rule in most jurisdictions that "[a] retirement pension is pay withheld to induce continued faithful service"
How later courts described this case
- recognizing the generally accepted rule in most jurisdictions that "[a] retirement pension is pay withheld to induce continued faithful service"
- “Where a private pension plan creates a contractual obligation between employer and employee, the rights and obligations of the parties must be measured by the terms of the contract under the ordinary rules of contractual construction.”
- “A retirement pension is pay withheld to induce continued faithful service.”
- where employee knows that a pension plan exists, continued employment is consideration
Written by the judges who cited it.
The opinion
Rosellini, J.
(concurring in the result) — I concur reluctantly in the majority’s conclusion that the contract does not provide any pension for a discharged employee who has not served 10 years “under the plan,” in other words, after the inception of the plan and while it is in operation.
The language describing “credited service” might create in the mind of a reader who did not study the contract as a whole the impression that such service is the same as service “as a participant under the plan.” But we must assume that the parties relying on the contract have read it in its entirety, and such a reading reveals clearly that “credited service” is an important factor in determining the amount of pension which an employee shall receive, but it is not the same thing as service “as a participant under the plan.”
*922 The requirement of 10 years’ employment after the inception of the plan in order for a discharged employee to qualify as a pension recipient appears unjust to me, particularly when it is considered that an employee may have worked 30 years before the inception of the plan and may be denied a pension, while another employee who has worked only 12 years will be granted a pension simply because 10 of those years were served after the inception of the plan.
To better understand the unfairness, the Grays Harbor Chair & Mfg. Co. had some 272 employees at the time the plan was created, of which 22 were salaried and participants under the plan. It was decided that the plan would include only “salaried employees who were the executive group of the company.” The reason that the plan was created, as testified by the officers, was to keep a winning team together which in the past had created a profitable business, to keep this group of valued employees from attempting to find other employment, and to forestall the possibility of demands for higher salaries.
The contributions for the plan were made in full by the employer and the employee was not required to contribute. However, they did contribute in another way. The company had instituted the practice of bonus payments on profits and it was testified that the retirement plan cost approximately $25,000 per year, and that in one or two years, because of the deterioration of the profit picture, they were given reduced bonuses.
However, the question whether provisions of this nature are contrary to public policy is one which must be decided by the legislature. We cannot legitimately twist the words of a plainly written contract, omit words, or substitute words to achieve a result which may appear to us to be more in accord with justice than the provisions of the contract, where there is no statute or rule of law which makes that provision illegal. And here it is not contended that the contract is unlawful.
We have no choice but to reverse.