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INGRASSIA v. SHELL OIL CO.

May 15, 1975

Joseph P. INGRASSIA, Plaintiff,
v.
SHELL OIL COMPANY, Defendant


Levet, District Judge.


The opinion of the court was delivered by: LEVET

LEVET, District Judge.

This is an action by the above-named plaintiff Joseph P. Ingrassia (hereinafter "Ingrassia") against defendant Shell Oil Company (hereinafter "Shell") for alleged damages by reason of the fact that defendant Shell, in the period from August 1969 to July 15, 1971, moved its head office in connection with which plaintiff was employed from New York City to Houston, Texas and agreed to make certain special severance payments to those of its employees, including plaintiff, who did not relocate to Houston but continued to work for defendant in New York until their services were no longer needed, and in addition were not terminated for cause or did not refuse an offer of a roughly equivalent position with defendant in New York; that plaintiff in reliance upon this promise continued to work until his services were no longer required and that defendant thereafter failed, upon demand, to make such payments, alleging damages in the amount of $25,000 plus counsel fees, interest, etc. Defendant contends it never agreed to pay severance pay to plaintiff, that plaintiff was offered a roughly equivalent position in the New York area and is, therefore, not entitled to severance pay or any other damages.

 The case was originally tried before Judge Metzner of this court and a jury. The jury were unable to agree. Thereafter the case was assigned to the undersigned. Upon conferring with the attorneys for the respective parties, counsel agreed that the case should be tried by the court, without a jury, both sides waiving a jury. Consequently, this court has the duty of attempting to determine a factual and legal question on which the jury were unable to agree.

 After hearing the testimony of the parties, examining the exhibits and the Proposed Findings of Fact and Conclusions of Law submitted by counsel, this court makes the following Findings of Fact and Conclusions of Law:

 FINDINGS OF FACT

 1. This court has jurisdiction over the subject matter and parties to this action. 28 U.S.C.A. § 1332.

 2. At all times relevant herein, plaintiff was a citizen of the State of New York. Defendant is and was at the time of the commencement of this action a foreign corporation organized under the laws of the State of Delaware, maintaining its principal place of business in Houston, Texas, and the amount in controversy exceeds $10,000, exclusive of interest and costs.

 3. Plaintiff was employed by defendant Shell at its head offices in New York City from 1951 until July 15, 1971. (Tr. 3.) *fn1"

 4. From 1956 until July 15, 1971, plaintiff held the position of Senior Representative -- National Sales in defendant's Marketing Department, Fleet and National Sales. This position was also referred to within the company, informally, as "national coordinator, fleet sales," and this position fell under the broad classification of "head office representative." (Tr. 3, 4, 13, 94, 127, 162.)

 5. In July 1969 defendant decided to transfer most of its operating organizations and their supporting elements from New York City to Houston, Texas. Among those being relocated were the offices of defendant's Marketing organization. (Pl. Ex. 1; Tr. 13, 14.) At that time, defendant estimated the number of jobs to be transferred at approximately 2,000. (Tr. 176.) In the period of July and August, 1969 defendant had not decided when such transfers would be made, except that relocation would take place largely during the last six months of 1970. (Pl. Ex. 1.) At that time, defendant did not know whether all departments would be asked to transfer. (Tr. 164, 175.) At that time, defendant contemplated that corporate headquarters and the executive offices of some of the operating organizations would remain in New York. (Pl. Ex. 1; Tr. 165.)

 6. On August 12, 1969 defendant promulgated a memorandum to its head office managers informing them of its decision to relocate to Houston, Texas. (Pl. Ex. 1.) The memorandum contained information about the move and employee benefits. This information was to be given to the employees by the managers following a general announcement to all employees on August 14, 1969. (Pl. Ex. 1; Tr. 175, 176, 177, 178.) In this memorandum defendant established a severance pay policy for those employees whose positions were to be transferred to Houston but who, for various reasons, would not themselves be relocated to Houston, upon condition, however, that they remain on the job in New York City as long as needed by defendant. The pertinent part of the memorandum (Pl. Ex. 1) is as follows:

 
"II. SPECIAL PAYMENTS
 
In view of the considerable time lag between announcement and actual relocation, serious manpower shortages can develop in New York if employees leave the Company prematurely, either because they are not asked to transfer or choose not to do so. To minimize this problem, a program of special payments has been established for those employees who remain until their services are no longer needed.
 
In general, employees who are terminating or retiring will qualify for special payments if they remain on the job as long as needed and are not terminated for cause. Examples are as follows:
 
Qualifies
 
Employee continues working until time when services are no longer required, and:
 
1. employee has not been offered a transfer;
 
2. has been offered a transfer and declined the offer.
 
Does Not Qualify
 
Employee is not offered or does not accept a transfer, and:
 
1. terminates or retires prior to time that services are no longer required;
 
2. is terminated by the Company due to unsatisfactory performance prior to relocation;
 
3. declines an offer of continued employment with the Company in a roughly equivalent position in the New York area."

 7. Defendant's purpose in establishing this policy of severance pay was to keep its New York City work force together in order that the company could continue to operate while the relocation proceeded. Defendant realized that the job market at that time was good and that many employees who would not be asked to transfer or who made up their minds not to transfer would have immediately gone out and sought other employment. (Pl. Ex. 1; Testimony of Buker, Tr. 176.)

 8. The memorandum of August 12, 1969 contained no cut-off date with regard to any offer made therein by defendant to non-professional employees. (Tr. 179.)

 9. In August 1969 plaintiff was categorized as a non-professional employee. (Tr. 14, 15.) As of August 1969, defendant had not determined which non-professional employees would be asked to relocate; these employees were to be notified of defendant's decision as quickly as manpower requirements were determined. (Pl. Ex. 1; Tr. 179.)

 10. In September of 1969, Mr. Frederick W. Spooner, who at that time was defendant's manager of national sales and plaintiff's immediate superior, informed plaintiff of the contents of the aforesaid memorandum of August 12, 1969 and of defendant's special severance pay policy described therein. Plaintiff then saw the memorandum in September 1969, after Spooner had told him about it. At that time, plaintiff was aware that defendant's purpose for establishing this policy was to retain employees who might otherwise have left the employ of defendant prior to completion of defendant's relocation to Houston. I find there is sufficient evidence of actual communication to plaintiff of any offer made by defendant in its memorandum of August 12, 1969. (Tr. 16, 17, 18, 19, 20, 95, 96, 125, 143, 144.)

 11. I find that plaintiff has proved by a fair preponderance of the credible evidence that he was an employee of defendant who was affected by the relocation of defendant's offices to Houston and that defendant's program of special severance payments (Pl. Ex. 1), established for such employees, applied to plaintiff.

 12. Defendant advised plaintiff in September 1969 that his position of Senior Representative -- National Sales would remain in New York City. (Tr. 16, 96, 116, 165.)

 13. In May 1971 defendant advised plaintiff that his position of Senior Representative -- National Sales was to be moved to Houston; at that time, defendant offered plaintiff a transfer to Houston in the same position. (Tr. 25, 26, 96, 97, 116, 117.)

 14. In June 1971 plaintiff advised defendant that, for family reasons, he declined the offer to transfer to Houston. (Pl. Ex. 2; Tr. 25, 26, 27, 28, 51, 52.)

 15. After notifying defendant of his decision not to relocate, plaintiff continued to work for defendant in the same position, introducing his replacement to customers, until plaintiff's position as Senior Representative -- National Sales was transferred from New York to Houston on July 15, 1971, when defendant closed the New York office. I find that plaintiff continued to work for defendant until his services were no longer required. (Pl. Exs. 2, 5; Tr. 24, 27, 28, 39, 51, 52.)

 16. I find that plaintiff continued, in reliance upon defendant's promise of severance pay made in its memorandum of August 12, 1969, to work for defendant until his services ...


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