The opinion of the court was delivered by: BODY
Plaintiff, an Illinois citizen, was an employee of the defendant, Food Fair Stores, Inc. ("Food Fair"), a Pennsylvania corporation, from 1946 until 1960. Beginning in August 1947 he worked as a cattle buyer in the Chicago market for Food Fair's slaughtering plant in Elizabeth, New Jersey, and eventually advanced to the position of head Chicago cattle buyer. Plaintiff resigned from his employment on February 1, 1960 to work for the Harold Shannon Company ("Shannon"), purchasing cattle on a brokerage basis for various plants, some of which were allegedly in competition with Food Fair's Elizabeth plant in the wholesale meat business. [N.T. 3-12, 125]
During his fourteen years of continuous employment by Food Fair plaintiff accrued benefits under Food Fair's Incentive Bonus and Retirement Plan ("Plan"). Defendant, First Pennsylvania Banking and Trust Company ("Trustee") is the legal trustee under said Plan.
The Plan itself is a non-contributory profit-sharing plan voluntarily established by the Company for the benefit of its executive officers and certain other salaried employees. The Company has agreed to pay to the fund a certain percentage of its annual profits so long as that Plan remains in effect. This fund is held by the defendant Trustee and administered by an Advisory Committee consisting of five members, three appointed by the Company and two by participating employees. The fund is invested through the purchase of annuities, the purchase of insurance contracts on the lives of the employees and in other investments. The employee's beneficial holdings are typically paid to him at his retirement, or to his beneficiary if death occurs prior to retirement. The Plan does, however, provide (Article II, section 6):
"The interest of each participant shall become vested in him after ten (10) years of participation in the Plan, including as part of the ten (10) years the sixty (60) month period of eligibility for admission to the Plan; and shall be paid over to him or for his account at the times and in the manner stipulated herein."
The Plan further provides that the Committee has the right to terminate the interest of any beneficiary under the Plan upon a finding that he has, among other things, participated in any fraud or dishonesty toward the Company, or has "intentionally done any other act materially inimical to the interests of the Company."
Several months prior to resigning plaintiff announced his decision to seek other employment. Shortly after he actually left Food Fair, the Advisory Committee decided that he had entered into competition with Food Fair and therefore determined that plaintiff had "* * * done * * * an act materially inimical to the interests of the Company." The Committee thereupon terminated all rights of the plaintiff to any benefits under the Plan and any interest in assets held in connection with the Plan. To protect his interest in the annuity contracts purchased for him, plaintiff was allowed to purchase these from the Trustee.
Plaintiff alleged that the action of the Committee was improper and instituted this civil action against Food Fair
and the Trustee to recover his interest in the assets of the Plan which had been allocated to him during the course of his employment, including the return of the purchase of the cash surrender value of the life insurance policies.
Subsequently the case was tried for five days before this Court and a jury, at the close of which the jury rendered a verdict for plaintiff in the amount of $30,351.85.
Judgment was entered on the verdict and defendant trustee, First Pennsylvania Banking and Trust Company, filed its Motions for Judgment N.O.V. and for a New Trial which are now before the Court.
Defendant Trustee's first contention is that Judgment N.O.V. should be entered in its behalf because there is no evidence in the record to support a finding that the Food Fair Advisory Committee abused its disrection or acted without a reasonable basis in its determination.
The Trustee claims that the evidence shows that plaintiff's resignation to compete could be considered "inimical" and that the Committee's action showed no ill will or bad faith. In response to this argument, plaintiff points to the fact that Mr. Stein, the President of Food Fair and Chairman of the Committee, told him in advance of his resignation that if he left the Company to go with Shannon he would lose his rights under the Plan. (N.T. 188, 190) Plaintiff also relies on the fact that Mr. Silver and Mr. Cohen, both of whom were Food Fair executives and members of the Committee, indicated that he would lose his interest if he took employment with Shannon Company. We think this evidence is sufficient to warrant a finding by the jury that if they believed this testimony, any subsequent formal action by the Committee was a mere "rubber stamp" and indicated an abuse of discretion and bad faith on the part of the Committee.
Furthermore, there was no clear evidence that plaintiff entered into competition with Food Fair after he left their employment. He became a wholesale cattle broker engaged in the business of buying cattle for anyone in ...