Dove v. Rose Acre Farms, Inc.
434 N.E.2d 931 (Ct. App. Ind. 1982)
Neal, J.
Plaintiff-appellant Mark Dove (Dove) appeals a negative
judgment of the Decatur Circuit Court in favor of defendant-appellee Rose Acre
Farms, Inc. in a trial before the court without the intervention of a jury.
We affirm.
STATEMENT OF THE FACTS
The evidence most favorable to support the judgment and the
facts found specially by the trial court are as follows. Dove had been employed
by
Rose Acre Farms, operated by David Rust (Rust), its president and principal
owner, in the summers and other times from 1972 to 1979. The business of Rose
Acre was the production of eggs, and, stocked with 4,000,000 hens and staffed
with 300 employees, it produced approximately 256,000 dozen eggs per day. Rust
had instituted and maintained extensive bonus programs, some of which were for
one day only, or one event or activity only. For example, one bonus was the
white car bonus; if an employee would buy a new white car, keep it clean and
undamaged, place a Rose Acre sign on it, commit no tardiness or absenteeism, and
attend one management meeting per month, Rose Acre would pay $100 per month for
36 months as a bonus above and beyond the employee's regular salary, to apply on
payments. Any slight violation, such as being a minute late for work, driving a
dirty or damaged car, or missing work for any cause, would work a forfeiture of
the bonus. Other bonuses consisted of egg production bonuses, deed conversion
bonuses, house management bonuses, and a silver feather bonus. This last bonus
program required the participant to wear a silver feather, and a system of
rewards and penalties existed for employees who participated. While the
conditions of the bonuses varied, one condition existed in all bonus programs:
during the period of the bonus, the employee must not be tardy for even a
minute, and must not miss work any day for any cause whatever, even illness. If
the employee missed any days during the week, he was sometimes permitted to make
them up on Saturday and/or Sunday. Any missed work not made up within the same
week worked a forfeiture of the bonus. These rules were explained to the
employees and were stated in a written policy. The bonus programs were
voluntary, and all the employees did not choose to participate in them. When a
bonus was offered a card was issued to the participant stating his name and the
terms and amount of the bonus. Upon completion of the required tasks, the card
was attached to the pay sheet, and the bonus was added to the paycheck. Rust was
strict about tardiness and absenteeism, whether an employee was on a bonus
program or not. If an employee was tardy, his pay would be docked to the minimum
wage, or he would be sent home and lose an entire day. A minute's tardiness
would also deprive the employee of a day for purposes of seniority. As was
stated in the evidence, bonuses were given for the "extra mile" or actions
"above and beyond the call of duty." The purpose of the bonus programs and
penalties was to discourage absenteeism and tardiness, and to promote motivation
and dependability.
In June 1979, Rust called in Dove and other construction crew
leaders and offered a bonus of $6,000 each if certain detailed construction work
was completed in 12 weeks. As Dove conceded in his own testimony, the bonus card
indicated that in addition to completing the work, he would be required to work
at least five full days a week for 12 weeks to qualify for the bonus. On the
same day Dove's bonus agreement, by mutual consent, was amended to ten weeks
with a bonus of $5,000 to enable him to return to law school by September 1.
Dove testified that there was no ambiguity in the agreement, and he understood
that to qualify for the bonus he would have to work ten weeks, five days a week,
commencing at starting time and quitting only at quitting time. Dove testified
that he was aware of the provisions concerning absenteeism and tardiness as they
affected bonuses, and that if he missed any work, for any reason, including
illness, he would forfeit the bonus. The evidence disclosed that no exception
had ever been made except as may have occurred by clerical error or
inadvertence.
In the tenth week Dove came down with strep throat. On
Thursday of that week he reported to work with a temperature of 104 degrees, and
told Rust that he was unable to work. Rust told him, in effect, that if he went
home, he would forfeit the bonus. Rust offered him the opportunity to stay there
and lay on a couch, or make up his lost days on Saturday and/or Sunday. Rust
told him he could sleep and still qualify for the bonus. Dove left to seek
medical treatment and missed two days in the tenth week of the bonus program.
Rust refused Dove the bonus based solely upon his missing the
two days of work. While there was some question of whether the construction job
was finished, Rust does not seem to have made that issue the basis of his
refusal. Bonuses to other crew leaders were paid. The trial court denied Dove's
recovery and, in the conclusions of law, stated that Dove had not shown that all
of the conditions of the bonus contract had been met. Specifically, Dove failed
to work five full days a week for ten weeks.
ISSUES
Dove presents the following issues for review in this appeal.
I. Whether the trial court, upon finding a valid contract, was correct in ignoring the doctrine of substantial performance, when it held that the plaintiff could only recover if every condition of the contract was met;
. . .
DISCUSSION AND DECISION
Issue I. Substantial performance
Dove argues that the bonus agreement was implemented to (1)
insure his presence on the construction site, and (2) cut the cost of
construction through maximum production by workers. He next contends that Rose
Acre got what it bargained for, that is, the completion of the project. He
argues that he was present on the job, including the hours he worked late, at
least 750 hours during the ten weeks, while regular working hours would amount
to only 500 hours. Therefore, he concludes, there was substantial compliance
with the agreement, and he should not be penalized because he failed to appear
on the last two days because of illness. Rust disputes that Dove worked any
significant amount of overtime.
. . .
The principal Indiana case on bonus contracts is
Montgomery Ward & Co. v. Guignet, (1942) 112 Ind.App. 661, 45 N.E.2d 337.
There a bonus, in addition to salary, expressed in terms of a percentage of the
annual net profit, was provided to Guignet, a store manager. His employment
contract under its own terms was terminable at the will of Montgomery Ward, with
or without cause, and if his contract was terminated before the calendar year's
end, the rights under the bonus were forfeited. Guignet was terminated on
October 30, and the court held that he could not recover either all or a portion
of the bonus. The court stated that the right of Guignet to recover must be
determined from a study of all of the provisions of the adopted plan. The court
further noted that since the terms of the plan were well known to Guignet, he
became bound by the provisions governing the payment of the bonus, and he was
required to meet the conditions stipulated in the plan before he could share in
the benefits. The right of Guignet to a bonus was conditioned upon his
continuous service for the entire year in which the profits of the business were
computed, and the court stated that the condition was not unconscionable or
contrary to public policy.
The court analyzed the authorities of other jurisdictions
which, absent bad faith or fraud, have upheld bonus plans requiring employees to
complete the term in order to draw the bonus or any part of it, citing . . .
Muir v. Leonard Refrigerator Co., (1934) 269 Mich. 406, 257 N.W. 723. In . .
. [that] case the court said: "It is difficult for plaintiff to extricate
himself from the conditions of employment which he has voluntarily assumed, for
even though the forfeiture provisions seem harsh, we can only interpret the
contract which the parties have made." (Citations omitted.)
. . .
We are constrained to observe, in the case before us, that
the bonus rules at Rose Acre were well known to Dove when he agreed to the
disputed bonus contract. He certainly knew Rust's strict policies and knew that
any absence for any cause whatever worked a forfeiture of the bonus. With this
knowledge he willingly entered into this bonus arrangement, as he had done in
the past, and . . . he must be held to have agreed to all of the terms upon
which the bonus was conditioned. If the conditions were unnecessarily harsh or
eccentric, and the terms odious, he could have shown his disdain by simply
declining to participate, for participation in the bonus program was not
obligatory or job dependent.
Contrary to Dove's assertion that completion of a task was
the central element of the bonus program, we are of the opinion that the rules
regarding tardiness and absenteeism were a central theme. Rust stated that the
purpose of the bonus program was to discourage tardiness and absenteeism and to
promote motivation and dependability. Indeed, some of the bonus programs such as
the white car bonus and the silver feather bonus were apparently an effort on
the part of Rust to establish among the employees an identity with Rose Acre and
to create an esprit de corps. The direct tangible benefits to Rose Acre
would be unmeasurable, and the burden upon the employees would be equally
unmeasurable. Yet, Rust was willing to pay substantial bonuses in the
implementation of his program, and the employees, including Dove, were quite as
willing to take the money.
No fraud or bad faith has been shown on the part of Rose
Acre, and no public policy arguments have been advanced to demonstrate why the
bonus contract should not be enforced as agreed between the parties. . . . [W]e
are not at liberty to remake the contract for the parties.
. . .
Affirmed.