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Knollmeyer v. Rudco Industries Inc.

Decided: November 16, 1977.

PAUL R. KNOLLMEYER, PLAINTIFF-APPELLANT,
v.
RUDCO INDUSTRIES, INC., RUDCO CHECKS, INC., FIRST NATIONAL CITY BANK AND DAVID RUDNICK, CECIL RUDNICK AND KEITH WINTERS AS THE ADMINISTRATIVE COMMITTEE OF THE PROFIT SHARING RETIREMENT PLAN OF RUDCO CHECKS, INC., DEFENDANTS-RESPONDENTS



Lora, Seidman and Milmed. The opinion of the court was delivered by Milmed, J.A.D.

Milmed

[154 NJSuper Page 310] Plaintiff, a former employee of defendant Rudco Checks, Inc.*fn1 (Rudco), sought to recover from defendants $24,216 which he alleged was due him under a Rudco Profit Sharing Plan (Plan). Defendants, with the exception of First National City Bank, answered and denied

the alleged indebtedness, claiming that since plaintiff terminated his employment with Rudco and took employment with a Rudco competitor in the business of check imprinting and marketing, he forfeited all of his right or interest in the Plan. Both parties moved for summary judgment. After a hearing, the trial judge initially denied both motions. On application by defendants for reargument and cross-motion for summary judgment by plaintiff, the trial judge, after a further hearing, denied plaintiff's motion and granted defendants' motion for summary judgment. This appeal by plaintiff followed.

The essential facts are not in substantial dispute. In 1963 plaintiff started with Rudco as a salesman. In 1969 he was promoted to New York District Manager. In the latter part of 1972 he was assigned as Regional Manager of the New England area. In regard to this assignment and his reaction to it, he stated, in answers to interrogatories:

In August 1972, plaintiff was asked if he would take on the development of the New England region. Defendants had opened a new plant in Holyoke, Massachusetts, at the end of 1971 to service the New England region. Sales were not developing therein. Plaintiff was told that he was needed for approximately one year to develop the sales and salesmen in this region. He was assured that his earnings would not be affected because the basis for his income would be the New York market. He then worked Monday to Friday in New England and returned to his home in New Jersey on weekends.

In January, 1973, plaintiff was advised by defendants that he was required to work for two years in New England, and that his income would no longer be tied to New York sales. He was further informed that he should move his family to New England. When he asked what would happen after two years, he was told by defendants that he would be moved to the next new region that defendants desired to develop, possibly in Cleveland, Ohio, Biloxi, Mississippi, or wherever the company decided to expand. Such an uncertain future involving frequent geographical changes and speculative future income was an untenable one for an executive of plaintiff's age and experience, and there existed no choice but for plaintiff but [ sic ] to leave the employ of defendants.

In April 1973 plaintiff resigned from Rudco Checks, Inc. to take a position with one of its few competitors, American Bank Stationery Division of American Standard Company.

Article 9.10 of the Profit Sharing Plan of Rudco Checks, Inc., reads:

If an employee who has been a salesman, manager, foreman or executive with the employer ceases his employment with the employer to take a position with a competitior [ sic ] of the employer or if within two (2) years after the termination of employment and while receiving payments hereunder an employee takes employment with a competitor of the employer, then he shall be deemed to have forfeited the entire amount then standing to his credit in his account in the Fund as of the time of the occurrence of such event.

The decision as to whether such employment is with a competitor as set forth herein shall be made by the Administrative Committee and shall be binding on all parties.

On May 4, 1973 the Administrative Committee of the Plan noted plaintiff's resignation, effective as of May 1, 1973, and his employment with American Bank Stationery Division, a competitor of Rudco, and voted "that as a result of such employment, Mr. Knollmeyer [plaintiff] is deemed to have forfeited his account in ...


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