Opinion
No. 40496
Decided May 31, 1967.
Employment contracts — Group insurance coverage afforded employees after retirement — Vested right to continuance by employer.
APPEAL from the Court of Appeals for Summit County.
This action was instituted as a class suit in the Court of Common Pleas of Summit County by three retired salaried employees of the Seiberling Rubber Company of Akron on behalf of themselves and all others similarly situated against Seilon, Incorporated, a Delaware corporation authorized to do business in Ohio, which early in 1965 became the successor of Seiberling, to require Seilon, which assumed Seiberling's obligations, to continue by the issuance of a mandatory injunction group life, medical, surgical and hospital insurance coverage afforded plaintiffs after their retirement, which Seilon threatens to cancel.
Plaintiffs, as retired salaried employees, claim a vested right to the continuance of such group insurance by Seilon, whereas Seilon maintains that a voluntary insurance plan only was created, and that it has the right to cancel such insurance at will, the cancellation to become effective on November 1, 1965.
The petition and the answer joined the issues, and the cause was tried to the court upon evidence, including a number of exhibits. Findings of fact and conclusions of law were made by the court in favor of the plaintiffs, and the judgment rendered ordered Seilon to continue the insurance coverage to the plaintiffs and those similarly situated.
An appeal on questions of law and fact was taken to the Court of Appeals, which court upon a de novo hearing rendered a judgment similar to that rendered in the court below.
The cause is now in this court for a decision on the merits pursuant to the allowance of a motion to require the Court of Appeals to certify the record.
Messrs. Buckingham, Doolittle Burroughs, Mr. John M. Glenn and Mr. Richard A. Chenoweth, for appellees.
Messrs. Moss Friedman and Mr. Robert D. Moss, for appellant.
Both the lower courts found from the evidence upon a reasonable and supportable interpretation thereof that, through a series of inducements, corporate resolutions and actions by plaintiffs' employer to encourage loyalty and the continuance of service by its salaried employees, the employer established the insurance program in issue, which was accepted and complied with by the affected employees during their working years, that the employer, despite the considerable cost, became obligated to continue the insurance coverage to the eligible employees upon and after their retirement, and that through the inducements and actions of the employer these employees, upon retirement, acquired a vested right to the continuance by the employer of the insurance coverage.
A majority of this court, upon examination of the record, agrees with the decision and judgment of the Court of Appeals and is further of the opinion that the principles announced in the case of Cantor v. Berkshire Life Ins. Co., 171 Ohio St. 405, 171 N.E.2d 518, were properly applied by that court.
The Cantor case stands for the general proposition that, where an employee has complied with the conditions of his contract of employment, benefits have been promised and conferred on him by his employer as an inducement for the continuance of his service to the employer, and such employee reaches the specified retirement age, he acquires, by the promise and agreement of his employer, a vested right to those benefits, and, in the absence of good and sufficient causes for forfeiture, he may not be deprived thereof, notwithstanding a proviso in the contract of employment to the contrary.
We likewise agree with the Court of Appeals that the employer may change the insurer from the existing one to another, and that it may cancel insurance as to those of its employees who are still working and have not retired.
In accordance with the views expressed, the judgment of the Court of Appeals is affirmed.
Judgment affirmed.
ZIMMERMAN, MATTHIAS, O'NEILL, HERBERT, SCHNEIDER and BROWN, JJ., concur.
The Cantor case ( 171 Ohio St. 405) was stronger than the court indicates. The individual written contract of employment there specifically provided that the disputed benefits were nonvested and that it (the contract) was cancelable at the will of either party without cause.