Twiss v. Lincoln Telephone & Telegraph Co.
287 N.W. 620, 1939 Neb. LEXIS 162, 136 Neb. 788 (1939)
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Rule of Law:
An employer-funded pension plan, unless its terms establish otherwise, does not create a vested right to benefits for an employee who has not met the plan's express age and service requirements prior to discharge. Furthermore, for a slander claim, legal publication does not occur when defamatory statements are communicated solely to the defamed person or to a third party whose presence was contrived by the plaintiff.
Facts:
- Marjorie Twiss began employment with Lincoln Telephone & Telegraph Company (defendant) on August 1, 1917, and worked continuously in various roles, including switch-board operator, manager, and chief operator, until her discharge on July 19, 1935.
- When Marjorie Twiss was hired, an officer of the defendant explained its 'Plan for Employees’ Pensions, Disability Benefits and Death Benefits,' which was established effective January 1, 1917, and funded solely by the defendant without employee contributions.
- The pension plan (Section 4, paragraphs 1(a) and 1(b)) stipulated that female employees must have 20 or more years of service and be 55 years old to be eligible for a service pension, or 25 or more years of service and be 50 years old at the discretion of the committee.
- Section 8 of the plan explicitly stated that the plan did not grant employees a right to be retained in service or a right to claim any pension after discharge unless the right to such pension had accrued prior to discharge, and that no employee had a right to a pension for service less than specified in Section 4.
- At the time of her discharge, Marjorie Twiss was 38 years old and had approximately 18 years of service, thus not meeting the age or service requirements for a pension under the plan.
- On July 19, 1935, John A. McKinzie, an officer of the defendant, called Marjorie Twiss to the Louisville exchange where, while they were alone in the rest room, he accused her of inviting a traveling salesman to stay overnight and of having beer parties in the office.
- After Marjorie Twiss denied the accusations, McKinzie brought in two other operators, Miriam Carter and Clara Thornton, and inquired of Miss Carter about a beer party involving Miss Twiss and Don Cramer, which Miss Carter confirmed.
- Leona Wallace, a dressmaker employed by Marjorie Twiss, waited in the lobby and testified that she overheard McKinzie make the accusation about the traveling salesman to Marjorie Twiss.
Procedural Posture:
- Marjorie Twiss sued Lincoln Telephone & Telegraph Company in a trial court (court of first instance) for pension benefits and slander damages.
- The trial court entered a judgment in favor of Marjorie Twiss for $1,272.95 in pension benefits and $5,000 in slander damages.
- Lincoln Telephone & Telegraph Company (defendant) made motions to direct a verdict in its favor on both issues, which the trial court overruled.
- Lincoln Telephone & Telegraph Company (appellant) appealed the trial court's judgment regarding both pension benefits and slander damages to the Nebraska Supreme Court (appellee: Marjorie Twiss).
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Issue:
1. Does an employer-funded pension plan create a vested right to pension benefits for an employee who has not met the plan's express age and service requirements and whose right had not accrued prior to discharge? 2. Does an employer's communication of allegedly defamatory statements about an employee constitute 'publication' for a slander claim if the statements are made only to the employee, or to a third party whom the employee brought to the conversation?
Opinions:
Majority - Rose, J.
No, an employer-funded pension plan does not create a vested right to pension benefits for an employee who has not met the plan's express age and service requirements prior to discharge. The court found that Marjorie Twiss had not met the explicit conditions for pension eligibility under the defendant's plan, which required 20 years of service and age 55 (or 25 years and age 50 by discretion) for female employees, whereas she had only served 18 years and was 38 years old. The plan was voluntarily and gratuitously provided by the employer, who was therefore at liberty to prescribe its conditions, and it explicitly stated that no right to a pension accrued for service less than specified or after discharge unless the right had previously accrued. To allow her claim would divert the trust fund from its intended purposes and impair the rights of legally qualified employees. No, an employer's communication of allegedly defamatory statements about an employee does not constitute "publication" for a slander claim if the statements are made only to the employee, or to a third party whom the employee brought to the conversation. The court determined that the initial accusations by McKinzie to Marjorie Twiss occurred when they were alone in the rest room, and communication of a defamatory statement only to the defamed person is not considered publication in the law of slander. The subsequent alleged overhearing by Leona Wallace, who was brought to the exchange by Marjorie Twiss, was deemed a "publication brought about by the plaintiff’s own contrivance," which is insufficient evidence of publication by the defendant. Consequently, there was no evidence of legal publication by the defendant for the alleged slander charging immorality.
Analysis:
This case establishes two significant legal precedents. First, it reinforces that employer-sponsored pension plans are strictly construed, particularly when gratuitous and solely funded by the employer, meaning employees must meet all explicit eligibility criteria for age and service before any right to benefits vests. This limits an employee's ability to claim pension benefits if discharged before full qualification. Second, it clarifies the critical 'publication' element in defamation law, distinguishing between a communication made directly to the defamed individual (which is not publication) and one made to a third party (which is). It also highlights that a plaintiff cannot 'contrive' a publication to support a slander claim, thereby protecting defendants from liability for statements not intentionally or negligently disseminated to others. These principles have enduring implications for the drafting of benefit plans and the litigation of defamation claims.
