Company's Promise on Job Switch at Issue

by Patrick Mortimer
Employee Rights Attorney
Mission Viejo, California

Originally Published in The Orange County Register, September 29, 2003

Q: After 19 years as a union foreman, I was asked to take a non union supervisor position. I was concerned about losing the union health insurance benefits, but management assured me health insurance funded at $3,000 a year would be put into an annuity at retirement. I took the position. A few years ago, the fund was reduced to $2,100. A couple of years later, it stopped. What are my rights?

A: "The California Supreme Court ruled that contract principles apply to these situations," says Patrick Mortimer, employee rights attorney, Don D. Sessions Law Corp., Mission Viejo. "There is a difference, however, between a unilateral contract from the employer to provide a benefit and a bilateral contract between the employer and employee that includes a benefit.

"When the employer provides a benefit, the employer may change or terminate it after reasonable time and notice to the employee, provided a vested right will not be affected. An employee who stays is seen to have accepted the change.

"Your situation may be seen as a bilateral contract—you agreed to quit your union job and accept the management job based, in part, ion the employer’s promise to pay $3,000 a year. In that case, there must be new consideration to change or terminate the contract, which did not occur.

"You may have problems even if this is a bilateral contract. You have a limited amount of time to enforce a breach of contract from the date it is breached—generally, two years for an oral contract; four years for a written contract. It may be too late if the company reduced the funding a ‘few’ years ago and stopped it a ‘couple’ of years ago, but see an attorney."

For questions, call (800) 774-7494 or access job-law.com. © Sessions & Kimball LLP.