Asmus v. Pacific Bel

999 P.2d 71 (2000)

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Nature of the Case

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Facts

Pacific Bell (D) adopted a security policy for its managers through reassignment to and retraining for other management positions. The policy was to be maintained so long as there was no change in D's business plan achievement. Four years later in 1990, D notified its managers that industry conditions were forcing it to reconsider and maybe to discontinue this MESP policy. Two years later D announced that it would terminate MESP on April 1, 1992. In its place, it offered a generous severance program to decrease management. Those who chose to continue to work would get enhanced pension benefits, and those who opted to retire would get additional enhanced pension benefits. Ps are 60 former D management employees. They continued to work after termination of the MESP and got increased pension benefits. All but eight of them signed releases waiving their right to assert claims under the MESP. Ps filed an action for declaratory relief, injunctive relief and breach of contract. Partial summary judgment was granted to D against the 52 who signed releases. The court then granted summary judgment on the breach of contract claim for the remaining 8 Ps. The court held that even if an employer had the right to unilaterally terminate a personnel policy that right would not apply in cases where the original employment policy incorporated a term for duration of conditions for rescission absent stronger evidence of the Employee’s assent to the modification than their continued employment. Thus, the court reasoned that D could not terminate the MESP without first showing a change that will materially alter D's business plan achievement. Questions were then certified for appeal.