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United Protective Workers of America v. Ford Motor Co.

May 20, 1955


Author: Swaim

Before MAJOR, LINDLEY and SWAIM, Circuit Judges.

SWAIM, C.J.: These appeals are from a judgment in an action which was brought by the United Protective Workers of America, Local No. 2, and one of its members, Joseph Orloski, to obtain monetary and injunctive relief from the Ford Motor Company because of the alleged breach by Ford of its collective bargaining agreement with the Union by the compulsory retirement of Orloski at age 65.

On June 21, 1945, the Company signed a group annuity contract with The Equitable Life Assurance Society of the United States for the benefit of those of its employees who received a certain salary or over and who chose to participate in the plan. The contract provided for monthly payments to members of the plan on retirement. Retirement age was defined as 65 with optional earlier retirement under certain specified conditions. The Company distributed a pamphlet explaining the plan to its employees. Orloski did not receive a pamphlet at that time because his salary was not then large enough to allow him to participate in the plan. He testified that he never received or saw a copy of this explanatory pamphlet, even when his salary was raised and he did enter the plan. The evidence failed to show as a matter of law that Orloski had seen this explanation of the annuity plan or knew that it provided for compulsory retirement at age 65.

On September 26, 1947, after a wage increase, Orloski elected to enter the plan and signed an "acceptance and salary roll deduction authority." This card authorized deductions from Orloski's salary and named his wife as beneficiary of death benefits. It did not explain the plan in any way nor mention retirement. On April 25, 1949, Orloski was retired against his will and was thereafter paid $20.00 per month under the annuity plan.

In his suit for reinstatement and back pay Orloski claimed that the collective bargaining agreement between his Union and the Company prevented his discharge except for cause and that the Group Annuity Plan entered into by Ford did not furnish such cause. The District Court dismissed the complaint for failure to state a cause of action. On appeal we reversed, and remanded the case for answer by the defendant and trial, holding, among other things, that under the collective bargaining contract then in effect the Company did not have the right to retire plaintiff without his consent. United Protective Workers of America v. Ford Motor Co., 7 Cir., 194 F.2d 997. On remand the District Court found for Orloski, assessed his damages in the amount of $4,977.36, and denied recovery to the Union. All three parties have appealed. Orloski contests the District Court's measure of damages, the Union claims it should recover damages, and the Ford Motor Company disclaims liability to either party.

The Company argues on several grounds that Orloski was properly retired.First, it claims that he was retired under an established retirement plan in which he was voluntarily participating. However, the only positive evidence in the record indicates that Orloski did not know that the annuity contract between the insurance company and Ford provided for retirement at age 65 and that he did not consent to compulsory retirement. In the absence of knowledge of or consent to the Company's alleged policy of compulsory retirement, there is no basis for holding that Orloski waived his right, under the collective bargaining agreement, to be discharged only for cause.Nichols v. National Tube Co., 122 F.Supp. 726, 732.

On the previous appeal we held that Orloski's failure to first follow the grievance procedure of the collective bargaining agreement did not bar his recovery in court, because the Company's attitude in the suit, as evidenced by its briefs, made it obvious that pursuit of the grievance procedure would have availed Orloski nothing. The Company now claims that certain letters introduced into evidence on the remand show that we were wrong and that the grievance procedure on behalf of Orloski would not have been a useless thing. After carefully examining these documents, we find they reflect the same attitude conveyed by the briefs when the case was first before us. In a letter from an associate counsel for the Ford Motor Company to the plaintiff's attorney, which is in the record now before us, the following statement is made.

"Whether or not we are compelled to do so legally, we have in fact bargained with you concerning the instant case. No amount of negotiation will reduce Mr. Orloski's age nor eradicate his past participation in the current Plan."

The Company was willing to talk about the situation but made it clear that it was not going to change its position. We hold, as we did before, that, faced with this attitude by Ford, Orloski was not required to first go through the steps of the grievance procedure before seeking the legal and equitable relief to which he is entitled.

The Company claims that there is no substantial evidence in the record to support the District Court's finding that Orloski tried to mitigate his damages by seeking other suitable employment with "due diligence," and that, therefore, Orloski should recover no damages. In its brief the Company cites two cases to substantiate this argument: Buster v. Chicago, M., St. P. & P.R. Co., 7 Cir., 195 F.2d 73; and Doherty v. Schipper & Block, 250 Ill. 128, 95 N.E. 74. Neither of these cases mentions the question with which we are here concerned.

The correct rule is that where the discharged employee has not used "reasonable diligence" to find other suitable work, the judgment will be reduced by the amount he would have been able to earn if he had used "reasonable diligence." Keel v. Illinois Terminal R. Co., 346 Ill.App. 169, 173, 104 N.E.2d 659; Taylor v. Tulsa Tribune Co., 10 Cir., 136 F.2d 981, 983.

The exercise of due or reasonable diligence is a question of fact and was determined by the court in this case:

"I therefore hold, and shall enter as Findings of Fact, that Orloski * * * did make reasonable efforts to mitigate his damages by attempting to obtain gainful employment, in the interim." (Opinion of the trial judge announced January 22, 1954, record page 613.)

The record shows that Orloski knew efforts were being made by the Union to have him reinstated, and expected to be called back to work. Despite this, he made three attempts to obtain work. This was ...

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