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Siss v. U.s. Steel Corp.

NOVEMBER 6, 1975.




APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.


Rehearing denied December 11, 1975.

This case involves a dispute between a retired employee and his employer over his pension. The trial court ruled against the employee and he has appealed.

United States Steel Corporation maintains a pension program for its 178,000 employees to which they make no contribution. The program is administered by the U.S. Steel and Carnegie Pension Fund, a Pennsylvania Corporation, and the rules which govern the program are to be construed according to the laws of Pennsylvania. The rules provide for several types of retirement plans for employees who have at least 15 years of service. One of these is for employees under 65 years of age who terminate their employment after at least 30 years of continuous service. A written application must be made to the company and the pension commences the first full calendar month following the month in which the retirement occurs.

Fred Siss started working at the South Works (Chicago) of United States Steel in 1930 when he was 21 years old. He was laid off in 1932, but was rehired in 1935 and worked steadily until 1971. He became eligible for the "thirty year" pension in 1966, but kept on working. In the summer of 1970 he decided to take his pension and went to the company's personnel office to fill out the necessary application. He was a good employee and the head of the department tried to dissuade him, suggesting that he think it over. Upon reflection, Siss changed his mind and stayed on the job. He testified, however, that he definitely decided to retire on his 62nd birthday, December 16, 1971.

In December 1970 Siss received a head injury while at work; despite this he continued working until July 1, 1971. In June 1971, he informed his foreman and others, including the district superintendent, that he intended to take his pension on his 62nd birthday. After he stopped working in July 1971, he called in sick four or five times a month. He told his foreman that he might come back to work if his head pains improved and if his doctor said there was no danger. He also told his foreman that in no event would he return to his job after December 16, 1971. Sometime in November he stopped calling in sick, but the company continued to pay him his regular salary and did so until March 5, 1972, when his 26 weeks of sick-leave came to an end and two paid vacations of four weeks each — one for 1971 and one for 1972 — expired.

Although Siss' intention to retire on December 16, 1971, is evidenced by his conversations with his immediate supervisors and by the application he made in September to the Federal government to have his social security benefits begin on that date, he did nothing in December 1971 to effectuate his intention to retire and take his pension. His plan was not to file his application until he had received the maximum benefit from his fully paid sick-leave and vacation periods. He was, however, diverted from his plan.

Siss knew that his sick-leave and vacation perquisites would terminate. Sometime in February 1972, he went to his union headquarters and asked for help in applying for his pension. He also asked about his rights under workmen's compensation law for the injury he sustained in December 1970. The union referred him to a lawyer and advised him not to apply for his pension until his workmen's compensation claim had been processed. He followed this advice.

Although his sick pay and paid-up vacations expired on March 5, 1972, the company still considered him as an employee absent because of illness. Because of this he accumulated service credit which increased the size of his prospective pension. In February 1973, after he had been away from his job for 19 months, the company notified him that it could no longer pay for his insurance. Siss became worried, talked to his lawyer and, on April 4, 1973, went to the company's personnel office and applied for his pension. He asked the administrator to start the pension from the date his sick pay and vacation benefits had expired, but was told that the pension rules prohibited the retroactive award of pensions and that his would start the following month. The first of his monthly pension payments was mailed to him in May 1973, and he has received them ever since.

Siss contends that under the United States Steel 1972 Noncontributory Pension Rules he was entitled to a pension starting March 5, 1972. In the alternative he contends that if there is an ambiguity in the rules, the ambiguity, under Pennsylvania law, must be resolved in his favor.

The rule most pertinent to his contention is No. 1.1(i) which states that retirement occurs:

"(1) in the case of a participant who applies for pension prior to a break in continuous service, on the date he specifies as the date he wishes to retire, which shall be a date on or after the latest of

(i) the date of his request for retirement,

(ii) the date of his attainment of eligibility for a pension under ...

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