490 F.2d 55 | 3rd Cir. | 1973
Lead Opinion
OPINION OF THE COURT
The issue in this case is whether under the Selective Service Act of 1967 an employee is entitled to full vacation benefits for the years he entered and returned from military service, under the terms of a collective bargaining agreement that conditioned the award of such benefits on the receipt of earnings during 25 weeks of the previous year.
Earl R. Foster, an employee of the Dravo Corporation since August 5, 1965, received a military leave of absence beginning on March 6, 1967. Shortly after completing his military obligation, he returned to the employ of Dravo on October 7, 1968. Foster thus worked for Dravo a total of nine weeks in 1967 and thirteen weeks in 1968.
The collective bargaining agreement between Dravo and Foster’s bargaining representative, Industrial Union of Marine and Ship Building Workers of America, Local 61, requires that an employee, in order to qualify for full vacation benefits, “must have received earnings in at least twenty-five (25) work weeks in the twelve (12) months preceding the current December 31st.”
The language and the overall scheme and purpose of the reemployment provisions of the' Selective Service Act of 1967, 50 U.S.C. App. § 459, are determinative of the present dispute about a reemployed veteran’s claim to civilian
Section 459(b) requires that a returning veteran “be restored to the position vacated for military service” or, as an acceptable alternative, “to a position of like seniority, status, and pay.” Because the parties have stipulated that appellee was restored “to the position [he had] vacated,” the mandate of § 459(b) has been satisfied and there is no need in this case to consider the allowable alternative of restoration “to a position of like seniority, status, and pay.”
Rather, the controversy here arises out of the interpretation and application of § 459(c), which reads as follows:
(c)(1) Any person who is restored to a position in accordance with the provisions of paragraph * * *
(B) of subsection (b) shall be considered as having been on furlough or leave of absence during his period of training and service in the armed forces, shall be so restored without loss of seniority, shall be entitled to participate in insurance or other benefits offered by employer pursuant to established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such person was inducted into such forces, and shall not be discharged from such position without cause within one year after such restoration.
(2) It is declared to be the sense of the Congress that any person who is restored to a position in accordance with the provisions of paragraph * * * (B) of subsection (b) should be so restored in such manner as to give him such status in his employment as he would have enjoyed if he had continued in such employment continuously from the time of his entering the armed forces until the time of his restoration to such employment. (Emphasis added)
Subsections (c)(1) and (2) require that job seniority shall not be adversely affected by military leave, and that, for the purpose of various “other benefits” enjoyed by employees under the employer’s rules and practices, the reemployed veteran shall be treated as “having been on furlough or leave of absence” during his military service.
I.
Much in this case turns on whether a particular incident of the employment relationship is regarded as falling under the “seniority” or the “other benefits” language of subsection (e)(1).
There is general agreement as to the differing import of the “seniority” and “other benefits” language of subsection (c)(1). If it is length of service that determines the amount or kind of emolument a returning veteran is to receive, it must be considered a perquisite of “seniority” and the veteran's time spent in the military is included when computing his length of service.
II.
Accardi has spawned a group of lower court opinions that, Foster contends, counsel reliance on strictly literal interpretations of the words of the collective bargaining agreement in determining whether a particular benefit, such as vacations, is to be considered a perquisite of “seniority” or to be placed in the category of “other benefits.” In Accardi itself, which dealt with the issue whether time spent in the military should be included in computing an employee’s severance pay, the Supreme Court did point out that under the contract there “bizarre results” were possible: “an employee [could] . . . receive credit for a whole year of ‘compensated service’ by working a mere seven days.”
The use of the label “compensated service”' cannot obscure the fact that the real nature of those payments was compensation for loss of jobs. And the cost to an employee of losing his job is not measured by how much more work he did in the past — no matter how calculated — but by the rights and benefits he forfeits by giving up his job. Among employees who worked at the same jobs in the same craft and class the number and value of the rights and benefits increased in proportion to the amount of seniority, and it is only natural that those with seniority should receive the highest allowance since they were giving up more rights and benefits than those with less seniority.8 (Emphasis added)
Undoubtedly the fact that the contract in Accardi had an express provision defining “compensated service” contributed, in some manner, to the result the Court reached. But it certainly would be ironic for the Supreme Court to direct lower courts to abandon the use of labels when deciding whether a benefit is a prerogative of seniority and at the same time direct that they replace such use with a strained and niggardly analysis of the terms of collective bargaining agreements.
Foster suggests, however, that this Court, in Hoffman v. Bethlehem Steel Corporation,
It is not clear that Hoffman relied solely on the possibility that the union and the employer contemplated such a “bizarre result” in concluding that this particular benefit was a prerogative of seniority. Under the agreement in Hoffman an employee would receive SUB credits if he were on. vacation, on jury duty, performing responsibilities as a union officer, or re-receive SUB credits if he were on va-related injury.
It would seem that the Court in Hoffman concluded that the policies of § 459, as expressed in Accardi, required it, in the specific factual setting there, to resolve in favor of the returning veteran the ambiguity in the contract as to whether the accumulation of SUB credits was a prerogative of seniority.
A close analysis of the SUB plan suggests a second possible distinction between Hoffman and the case sub jud-ice. Unlike vacation benefits, the protection which the SUB plan furnishes is part of an employee’s job security interest. The SUB plan is designed to and in fact does give the employee assurance that throughout his employment he not only earns his take home pay, but also accumulates assurance that, if exigencies of business require that he be laid off, he will have income for some period of time. The plan is a way of conferring, in diminished stature, one of the chief advantages of seniority, protection against economic loss in a period of diminishing employment. The SUB plan thus has as its purpose and effect the extension of a seniority-type protection to employees who, due to their relatively short length of service with the company, would formerly have been unprotected. Therefore, subsection 459(e), interpreted in the light of its overall purpose and applied to give effect to evolving practice in labor relations, can fairly be said to require that the returning veteran be accorded this seniority-type advantage.
III.
Foster asserts that even if the reasoning in Accardi and Hoffman do not mandate reversal here, the Supreme Court in Eagar v. Magma Copper Company
The Circuits, however, differ as to whether Eagar commands automatic classification of vacation benefits as seniority rights regardless of the fact that a particular collective bargaining agreement purports to condition the receipt of vacation benefits on the completion of a specified amount of work.
In Kasmeier v. Chicago, Rock Island and Pacific Railroad Company,
The Ninth Circuit, on the other hand, in Locaynia v. American Air Lines,
IV.
We are thus faced with a difficult choice: (1) to eschew careful analysis of the collective bargaining agreements, implicitly admitting perhaps that courts are inherently incapable of engaging in the somewhat amorphous inquiry necessary to arrive at a just and reasonable construction of the terms of such contracts ;
We conclude, instead, that it is our responsibility to give close attention to the contract and other related factors in reaching a determination whether the employer and the employees, through their representatives, viewed the particular benefit as additional compensation for work performed or a prerogative of seniority. In situations where a court does not have the fortuitous alternative of referring a dispute to someone, such as an arbitrator, more experienced in dealing with the ambiguities and inconsistencies in labor contracts, we find no authority for the proposition that the court is to abdicate its responsibility to fashion a solution after searching inquiry and careful deliberation.
It is . . •. apparent that Congress was not creating a system of seniority but recognizing its operation as part of the process of collective bargaining. We must therefore look to the conventional uses of seniority . which the Selective Service Act guaranteed the veteran. Barring legislation not here involved, seniority rights derive their scope and significance from union contracts. . . .32
V.
Although the language of the contract requiring the employee simply to receive earnings in at least twenty-five weeks is arguably ambiguous, it is not realistic to surmise that any employee could work for substantially less than the number of hours customarily regarded as constituting a full work week for any period of time without being discharged. Even assuming, for example, that a particular employee’s job calls for ten hours of work per week, it is questionable that an arbitrator, or a court in the absence of an arbitration provision, would award such employee full vacation benefits under this contract. It appears quite likely that if this problem were raised during negotiations, the parties’ understanding would comport with such a determination.
A more detailed examination of Foster’s claim to vacation benefits and of the terms of the collective bargaining agreement, informed by an appreciation of the background understandings shared by the parties to labor contracts, supports the conclusion that the vacation benefits are not prerogatives of seniority.
It has been stipulated that from August 5, 1965 until his 1967 induction into the armed forces, Foster was employed by Dravo “as a scaler at an hourly rate of $2.62.” Upon his release from military service he was “restored in his pre-service position ... on or about October 7, 1968, at an hourly rate of $2.92.” It also is stipulated that before and after military service Foster was recognized as enjoying “plant seniority” as of August 4, 1965, the date of his original hiring.
“Seniority,” as used in this stipulation and generally in labor relations, is a priority factor that normally serves to protect workers’ long term interest in job security by determining preference in such matters as advancement, layoffs and rehiring. Indeed, Article XIV of the labor contract that regulated Foster’s employment defined “Seniority” as “the right of preference in layoffs or rehiring, measured by length of service in a job classification. . . .” Foster’s interests of the type that are normally determined by seniority have been duly protected by measuring his seniority
Vacation with pay, on the other hand, is normally and reasonably considered part of a worker’s current or short term return for labor. Under this view, actual work time during a year provides a fair measure of the amount of annual vacation currently earned.
The contract specifies that to qualify for the maximum allowable annual vacation a worker must have “received earnings” in 25 work weeks during the immediately preceding calendar year. Thus, it is reasonable to treat the vacation pay that the employer provides as deferred compensation for work recently performed. But during about nine months of each of the years in question here
This case does not present a dilemma like the one this Court faced in Hoffman —some employees on leaves of absence received SUB credits under the agreement while others did not. Hence, we need not rely on the general Congressional policies undergirding § 459 in order to resolve an ambiguity created by inconsistent treatment of situations similar to the veteran’s in the collective bargaining agreement. Further, as we have already indicated, the essential character of the respective benefits at issue in Hoffman and this ease are significantly different.
Moreover, there are not present here circumstances where the veteran has barely failed to qualify for full benefits under the language of the contract.
In sum, we hold that the terms of this collective bargaining agreement require twenty-five full work weeks,
VI.
Our determination that Foster is not entitled to full vacation benefits under the collective bargaining agreement does not prevent his asserting a claim for pro rata vacation benefits under the provision of the contract providing for such benefits.
Although the complaint contains a general claim for vacation benefits, there is no specific averment relating to the pro rata benefits. The distinguished district court judge, however, after Foster’s counsel adverted to the provision relating to pro rata benefits, urged the parties to reach a compromise apparently along lines suggested by the language of that provision.
Accordingly, the judgment will be vacated and the case remanded for action in conformity with this opinion.
. Article XIV, section 2 of the collective bargaining agreement recites the conditions an employee must fulfill in order to receive vacation benefits. The relevant part of this section reads as follows:
In order to qualify for the foregoing vacations, an employee who has been continuously employed for two (2) or more December 31st and has seniority on the current December 31st must have received earnings in at least twenty-five (25) work weeks in the twelve (12) months immediately preceding the current December 31st.
It is only on the basis of Foster’s failure to meet the twenty-five weeks of work requirement that Dravo challenges his eligibility for vacation benefits.
. See, e. g., Accardi v. Pennsylvania R.R., 383 U.S. 225, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966) ; Tilton v. Missouri Pac. R.R., 376 U.S. 169, 84 S.Ct. 595, 11 L.Ed.2d 590 (1964). In Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 66 S.Ct. 1105, 90 L.Ed. 1230, the court enunciated the “escalator principle” which assures that the veteran does not suffer because of his military service in terms of his length of service vis-a-vis fellow employees who do not serve in the armed forces. “[The veteran] does not step back on the seniority escalator at the point he stepped off. He steps back on at the precise point he would have occupied had he kept his position.” Id. at 284-285, 66 S.Ct. at 1111.
. See, e. g., Kasmeier v. Chicago, R.I. & Pac. R.R., 437 F.2d 151 (10th Cir. 1971) ; Dougherty v. General Motors Corp., 176 F. 2d 561 (3d Cir. 1949).
. 383 U.S. 225, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966).
. See id. at 229-230, 86 S.Ct. 768.
. 383 U.S. at 230, 86 S.Ct. at 772.
. See Haggard, Veterans’ Reemployment Rights and the “Escalator Principle,” 51 B. U.L.Rev. 539, 571 (1971) (hereinafter cited as Haggard) ; Note, The Supreme Court, 1965 Term, 80 Harv.L.Rev. 91, 149 (1966).
. 383 U.S. at 230, 86 S.Ct. at 772.
. 477 F.2d 860 (3d Cir., 1973).
. Brief for Appellant at 13-15.
. The agreement expressly precluded the accumulation of SUB credits by an employee while serving in the armed services “except as may otherwise be required by law.” The Court apparently reasoned that this quoted language expressly contemplated that the contract would not affect the operation of § 459.
. It would be illogical, of course, for a laid-off employee to accrue SUB credits. Such an employee uses these credits at a rate of one per week of layoff. If he could at the same time accumulate credits, one purpose of the credit formula — to limit the company’s liability for SUB’S — would be, in part, defeated.
. See Haggard at 542 for a discussion of the resolution of some apparent inconsistencies created by the language of the statute regarding leaves of absence and furloughs.
. 389 U.S. 323, 88 S.Ct. 503, 19 L.Ed.2d 557 (1967) (per curiam), rehearing denied 389 U.S. 1060, 88 S.Ct. 767, 19 L.Ed.2d 866 (1968) .
. Magma Copper Co. v. Eagar, 380 F.2d 318, 319-320 (9th Cir. 1967).
. See Hollman v. Pratt & Whitney Aircraft, 435 E.2d 983, 988 (5th Cir. 1970).
. 50 U.S.C. App. § 439(c) (2). In Morton v. Gulf, M. & O. R.R., 405 F.2d 415 (8th Cir. 1969), the contract provided that the number of days of vacation to which an employee was entitled depended on the number of years of compensated service he had with the company. The court concluded that under this contract the amount of vacation did depend on length of service. There is no dispute as to the amount of vacation benefits for which Foster is presently eligible. Instead, Foster seeks vacation benefits for years credited to him for the purpose of computing his present benefits but for which he received no benefits.
. 437 F.2d 151 (10th Cir. 1971).
. Id. at 154-155.
. 176 F.2d 561 (3d Cir. 1949).
. See also Dugger v. Missouri Pac. R.R., 403 F.2d 719 (5th Cir. 1968) (per curiam), cert, denied, 395 U.S. 907, 89 S.Ct. 1752, 23 L.Ed.2d 222 (1969), aff’g 276 F.Supp. 496 (S.D.Tex.1967) (failure to meet requirement that employee render compensated service on at least 110 days preceding calendar year precludes the awarding of vacation benefits to employee who worked for only 85 days because of military service).
Dravo’s counsel urged at oral argument that the reasoning and holding of Dougherty control here. We cannot, however, affirm the district court on the basis of Dougherty without giving careful attention to the impact, if any, of the intervening Supreme Court decisions in Aooardi and Eagar on the precedential value of Dougherty.
. 457 F.2d 1253 (9th Cir.), cert, denied, 409 U.S. 982, 93 S.Ct. 317, 34 L.Ed.2d 246 (1972).
. See Comments, Reemployment Rights : The Veteran and the Vacation Benefit, 52 B.U.L.Rev. 480 (1973).
. 457 F.2d at 1254 n. 2.
. 477 F.2d 128 (7th Cir. 1973).
. The Court in Ewert stated :
Whatever one may conclude about the correctness of Dugger and Kas-meier with respect to the contracts there considered, we have no difficulty in concluding, under Eagar’s application of Aeoardi, that the vacation rights under the contract in this case are perquisites of seniority. Accordingly it is unnecessary to decide that there are no conceivable contractual provisions under which vacation rights are so purely additional compensation for services actually rendered, and so independent of seniority that Eagar would not apply. Id. at 129.
. Ewert v. Wrought Washer Mfg. Co., 335 F.Supp. 512, 512 n. 1 (E.D.Wis.1971).
. In Ewert, the court, although itself disdaining significant examination of the collective bargaining agreement, expressly rejected the apparent statement of the lower court that “vacation rights are always perquisites of seniority, and that there could be no contractual provisions under which vacation rights would fall into the class of other benefits.” 477 F.2d at 128-129.
. We are aware that the task of interpreting labor agreements is an intricate and somewhat specialized one. When the contract provides for arbitration, the Supreme Court has instructed courts to refer disputes concerning the meaning and scope of substantive provisions to the arbitrator unless there is an “express provision excluding a particular grievance from arbitration” or “forceful evidence of a purpose to exclude the claim from arbitration.” United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 584-585, 80 S.Ct. 1347, 1354, 4 L.Ed.2d 1409 (1960). In reaching its decision in Warrior & Gulf, the Supreme Court noted that the collective bargaining agreement was, in a sense, sui generis:
. . . It is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate ... It calls into being a new common law — the common law of a particular industry or of a particular plant. Id. at 578-579, 80 S.Ct. at 1351.
*62 The court added that the arbitrator might well introduce relevant considerations customarily ignored by courts when construing the provisions of a typical commercial contract. Id. at 581-582, 80 S.Ct. 1347. See Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1487, 1500 (1959). However, in some situations, including the § 9 case before us, courts cannot escape from interpreting collective agreements. See Boys Markets, Inc. v. Retail Clerks Local 770, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970). See generally Note, Labor Injunctions, Boys Markets, and the Presumption of Arbitrability, 85 Harv.L.Rev. 636, 644-49. Warrior & Gulf, although raising questions as to judicial competence in this area, does not suggest that courts should woodenly construe labor contracts when the alternative of arbitral decision is unavailable.
. See pp. 58-59, supra; Haggard at 571.
. 337 U.S. 521, 69 S.Ct. 1287, 93 L.Ed. 1513 (1949).
. Id. at 526, 69 S.Ct. at 1290.
. Seniority also may be consequence to the extent that a worker is allowed a shorter maximum vacation for his first or other early year of employment than for a subsequent year. It is not disputed here that the appellant is entitled to full seniority from the date of his original employment in determin-' ing how long a vacation he could earn during a particular calendar year.
. The claim here covers vacation pay for the full calendar years during which the appellant entered and left military service.
. Cf. Dugger v. Missouri Pac. R.R., 403 F. 2d 719 (5th Cir. 1968) (per curiam), cert, denied, 395 U.S. 907, 89 S.Ct. 1752, 23 L. Ed.2d 222 (1969), aff’g 276 F.Supp. 496 (S. D.Tex.1967).
. See Fees v. Bethlehem Steel Corp., 335 F.Supp. 487 (D.C.W.D.Pa.1971) ; Bradley v. General Motors Corp., 283 F.Supp. 481 (E. D.Mo.1968).
. Article XIV, section 2 of the collective bargaining agreement provides, in part, as follows:
However, employees who are laid off during the year immediately preceding December 31 and because of such layoff do not qualify for a vacation under this section will be given a pro rata vacation to which they might otherwise be entitled on the relationship of the weeks they did work to twenty-five (25) weeks but in no case more vacation than, they would have received under this Section if they had worked (25) weeks or more.
. Transcript at 65-79a.
Concurrence Opinion
(concurring).
I agree and add only that, in my view, the considerations that are decisive in this ease and should be most helpful to district judges in distinguishing advantages of seniority from “other benefits” under Section 459(c), are those set out in Part V of Judge Adams’ opinion.