Hayes v. Plantations Steel Co. case brief summary
438 A.2d 1091 (1982)
The Superior Court (Rhode Island)
granted judgment in favor of plaintiff employee on the basis that he
had an implied-in-fact contract with defendant employer to pay him a
yearly pension. The court held that the payments to the employee were
not governed by the Employee Retirement Income Security Act
(ERISA), 29 U.S.C.S. §§ 1001-1461, and consequently he was not
entitled to attorney's fees under § 1132(g) of ERISA. Both parties
CASE FACTS The employee worked for the employer
for 25 years. Starting one year after he retired and continuing for
three years, the employee received an annual sum from the employer.
The employee testified that approximately one week before his actual
retirement he spoke with an officer of the employer who stated that
the employee would be taken care of. There was no mention of a sum of
money and no formal authorization for payments by the shareholders.
The lower court held that the employer owed the employee an annual
sum for four years because the employee had a right to expect the
The court disagreed and reversed the judgment.
The court held that the employee did not supply the required
consideration to make the employer's promise binding.
The court held
that the employee announced his intent to retire well in advance of
any promise by the employer to pay him, and therefore the intention
to retire was arrived at without regard to any promise by the
The court held that the employee's long years of dedicated
service was legally insufficient consideration because his service
was rendered without being induced by the employer's promise.
CONCLUSION The court reversed the judgment in
favor of the employee and determined that the employer did not have a
contractual obligation to pay the employee a pension.
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