Tilbert v. Eagle Lock Co.
165 A. 205 (1933) (1933)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An employer's promise of benefits intended to induce continued service forms an enforceable unilateral contract when an employee accepts by performing the requested act of remaining in employment. A disclaimer stating the plan is not a contract will be interpreted narrowly to preserve the employer's right to terminate the plan prospectively, not to deny benefits that have already vested before the termination becomes effective.
Facts:
- Kasimierz Tilbert was an employee of Eagle Lock Co. for many years.
- On June 29, 1923, Eagle Lock Co. issued a 'Certificate of Benefit' to Tilbert, promising a payment to his wife, Annie Tilbert, if he died while employed by the company.
- The benefit plan documents stated the purpose was to secure employee loyalty and continuous service, but also included a clause that the plan 'constitutes no contract... and confers no legal rights.'
- The documents also expressly reserved Eagle Lock Co.'s right 'to discontinue these benefits at any time without any liability.'
- Tilbert continued his employment with Eagle Lock Co. for over eight years after receiving the certificate.
- On or before August 22, 1931, officers of Eagle Lock Co. decided to cancel the entire benefit plan.
- The company prepared printed cancellation notices dated August 28, 1931, to be distributed in employee pay envelopes on that day.
- Kasimierz Tilbert died at approximately 2:00 a.m. on August 28, 1931, hours before the company's factory opened and the cancellation notices were distributed.
Procedural Posture:
- Annie Tilbert sued Eagle Lock Co. in a Connecticut trial court to recover death benefits allegedly due under her late husband's employment.
- Eagle Lock Co. filed a demurrer (a motion to dismiss for failure to state a claim) to Tilbert's amended complaint.
- The trial court reserved the question of whether the demurrer should be sustained for the advice and opinion of the Supreme Court of Errors of Connecticut, the state's highest court at the time.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an employer's promise of a death benefit, which includes both a disclaimer that it constitutes a contract and a reservation of the right to discontinue the plan, create an enforceable right for an employee's beneficiary if the employee dies after the company internally decides to cancel the plan but before the cancellation is effectively communicated to the employee?
Opinions:
Majority - Hinman, J.
Yes, the promise of a death benefit created an enforceable right for the employee's beneficiary. The employer’s benefit plan was not a mere gratuity but an offer for a unilateral contract, which the employee accepted by continuing to work. The company's desire to secure employee loyalty and reduce turnover served as a benefit to the employer, and the employee's continued service, thereby forbearing his right to quit, constituted valid consideration. The disclaimer that the plan was not a contract is interpreted narrowly to preserve the at-will employment relationship and the employer's right to terminate the plan prospectively; it does not render the entire promise illusory or allow the employer to deny benefits that have already vested. The cancellation of the benefit plan was not effective until it was communicated. Since Tilbert died before the notice of cancellation was distributed on August 28th, his death occurred while the plan was still in effect, and his beneficiary's right to the benefit vested at that moment.
Analysis:
This case is a foundational decision in the law of employee benefits, establishing that employer-provided benefit plans can be treated as enforceable unilateral contracts rather than mere unenforceable gratuities. It demonstrates that courts may look past boilerplate disclaimers (e.g., 'this is not a contract') to find contractual intent based on the purpose of the promise and the employee's reliance. The ruling solidifies the principle that an employee's continued service constitutes acceptance and consideration, and that rights under such a plan vest upon fulfillment of its conditions, protecting them from subsequent, uncommunicated revocation by the employer.
Unlock the full brief for Tilbert v. Eagle Lock Co.