State ex rel. Roberts v. Public Finance Co.

BUTTLER, P. J. The state brought this action against Public Finance Company to collect unpaid vacation pay allegedly owed its -assignor, Richard G. Hoglen, pursuant to ORS 652.310 to 652.405. The state also seeks the statutory civil penalty provided in ORS 652.150, together with costs and attorney fees. Both parties moved for summary judgment. The trial court denied the state’s motion, granted defendant’s motion and entered a judgment for defendant dismissing the complaint with prejudice and awarding costs. The state appeals, contending that its motion for summary judgment should have been granted. The narrow issue, as phrased by the state, is: “When an employe employed under a unilateral contract is contractually entitled to receive three weeks paid vacation for each year worked, which he is eligible to take on and after each anniversary date of his original employment, is the employer liable for compensation in lieu of vacation when it discharges the employe without “cause” before the annual anniversary date?” The entire thrust of the state’s argument is that the employer, as a matter of unilateral contract law, could not sell its business in good faith, resulting in the employe’s being terminated before he was entitled to a vacation, without paying the employe vacation pay for the time he worked during the year before his annual anniversary (vacation eligibility) date. The relevant conditions of employment provide: “557. VACATION “557.1 Eligibility —Permanent full-time employees are eligible for vacation based on length of continuous service. Eligibility is contingent upon such service being performed in strict compliance with all Company rules and policies. Except at completion of the first six months of employment, vacation entitlement is established on the employee’s anniversary date with the Company. Anniversary date means Month and Day employed. “544. VACATION ENTITLEMENT ON TERMINATION “544.2 Dismissal and Release [237] “544.21 An employee who is released or dismissed for reasons other than cause as explained in 543.11 with vacation time earned but not yet taken, will be paid for that time. “544.3 Resignation “544.31 If an employee resigns with vacation time earned but not yet taken, he/she will be paid for that time, provided proper notice of intent to resign is given as explained in 543.43.” The operative language of §§ 544.21 and 544.31 is identical. Yet the state concedes that the employe would not be entitled to vacation pay if he resigned (§ 544.31) prior to his anniversary date (§ 557.1), because “such a resignation would constitute a rejection of the offer for paid vacation, and would disqualify the employe from the benefits under the vacation plan.” However, it urges that the situation is different if the employe is terminated in good faith, but without cause, not because the contract language is different, but because the “offer of paid vacation was an offer for a unilateral contract.” That offer, it argues, was accepted here by the employe’s tendering of part performance. There is no doubt that the paid vacation plan was part of the employment contract. However, as in Rose City Transit v. City of Portland, 271 Or 588, 533 P2d 339 (1975), only those employes who were eligible for the benefits at the time of termination are entitled to them. Labelling the vacation plan provisions an “offer of a unilateral contract” does not change the result. In the Rose City case, the Supreme Court apparently treated the pension plan as an offer of a unilateral contract, yet held that only those employes who were eligible under the plan at the time they were terminated were entitled to benefits. See Rose City Transit v. City of Portland, 18 Or App 369, 525 P2d 1325, aff’d as modified, 271 Or 588, 533 P2d 339 (1975). Given that there is no contention that the contract conditions of employment are ambiguous or that the employer acted in bad faith, and given the concession that an employe must be employed on his anniversary date in order to be entitled to a paid vacation, we agree with the trial court’s conclusion that the employe here did not fulfill that condition. [238] The dissent would generate an issue of fact not raised below or here. Not only did both parties argue that there was no issue of material fact, but the affidavits each party submitted in support of its motion for summary judgment do not even suggest an issue of fact, although the facts are set forth fully. There is no assertion by Hoglen that he understood or interpreted the employment agreement to mean that he was entitled to pro rata vacation pay on termination without cause. He stated that “under the terms of that agreement I was entitled to three weeks of paid vacation a year.” That fact is not disputed. Neither was there any contention in the trial court that the contract was ambiguous. The state’s theory was, and is, that under the law of unilateral contracts, the employe is entitled to pro rata vacation pay on termination without cause. That is the only question we decide — one of law — and the only one presented to both courts. In Hanneman v. Jones, 45 Or App 1005, 609 P2d 912 (1980), both parties presupposed that the document was ambiguous and that the intent of the parties must be ascertained from extrinsic evidence. Here, the parties presuppose no ambiguity and do not rely on extrinsic evidence. In Detrick v. Ranch Wholesale Supply of Redmond, 57 Or App 28, 643 P2d 1293 (1982), involving an oral employment agreement, which included a bonus plan, we held that the employe’s rights depended on the parties’ intent. That issue is not involved here. The dissent would require the parties to develop an issue of material fact, apparently on the issue of the parties’ intent or the employe’s expectation, to be resolved by extrinsic evidence. It is the function of affidavits in support of, or in opposition to, a motion for summary judgment to raise those issues. The affidavits did not do so here. It is apparent from the state’s contentions that it does not consider those issues to be relevant here, because the law of unilateral contracts requires that it prevail. The dissent does not accept that contention, although there is language in that opinion which suggests that it does. 59 Or App at 240.) If we were to decide this case on a ground not presented either in the trial court or here, the dissent still [239] misses the mark. Here the employment contract consists of written policies adopted by the employer. To say that the employe’s intent as to the meaning of any policy is relevant makes no sense at all — neither the employe nor anyone on his behalf played any part in drafting the policy language. It was not a negotiated contract. Accordingly, if we were to go off on a ground not argued by the state and, therefore, not countered by defendant, the most viable theory would be that the employment contract was one of adhesion, and any ambiguity should then be resolved against the employer, who prepared it. Because defendant has not had an opportunity to meet that theory in either the trial court or here, we ought not to dispose of this case1 on that basis. Affirmed. Footnotes [1] As the dissent points out, there are numerous other cases pending involving other employes terminated when the defendant sold its business. The parties should have ample opportunity to present different theories in those cases.