Petitioners, after military service in World War II, returned to
their employment as tugboat firemen with respondent, Pennsylvania
Railroad, which they had commenced in 1941 and 1942. Each was given
the same amount of seniority he had before leaving, plus credit for
the time spent in the service as required by the Selective Training
and Service Act of 1940. A strike developed in 1959 over the need
for firemen on the new diesel tugs, which was settled the next year
by petitioners' union and the railroads. The settlement agreement
called for retention of firemen with 20 years or more seniority who
wanted to remain. Other employees, including petitioners, were to
be paid a severance or separation allowance determined by the
length of "compensated service" with the railroad, a month of such
service being defined as any month in which the employee worked one
or more days, and a year of such service being 12 such months or a
major portion thereof. Petitioners claimed that their years in the
armed forces were to be included in calculating their separation
allowances. When the railroad declined to adjust their allowances
accordingly, petitioners brought this action in District Court,
claiming that respondent's refusal contravened § 8 (b)(B) of the
Act, requiring reinstatement "to [the former] position or to a
position of like seniority, status and pay," as reemphasized by §
8(c), providing that a person reinstated "shall be so restored
without loss of seniority." Respondent claimed that those
provisions were wholly inapplicable, and also contended, in view of
the § 8(c) provision that a reinstated veteran "shall not be
discharged . . . without cause within one year after such
restoration," that the Act had no application to any rights created
by the settlement agreement. The District Court rendered judgment
for petitioners, and the Court of Appeals reversed.
Held:
1. Failure to credit petitioners' "compensated service" time
with the period spent in the armed services does not accord
petitioners the right to be reinstated "without loss of seniority"
guaranteed by §§8 (b)(B) and (c). Pp.
383 U. S.
228-232.
Page 383 U. S. 226
2. Respondent's contention that the Act does not apply to rights
resulting from the contract, which was entered into over a year
after petitioners resumed employment, is wholly without merit,
since seniority status continues beyond the first year of a
veteran's reemployment.
Oakley v. Louisville & N. R.
Co., 338 U. S. 278. Pp.
383 U. S.
232-233.
3. The case is remanded to the Court of Appeals for
consideration of the issue of the District Court's computation of
interest on the judgment awarded petitioners. P.
383 U. S.
233.
341 F.2d 72 reversed and remanded.
MR. JUSTICE BLACK delivered the opinion of the Court.
Petitioners, who are World War II veterans and former employees
of the Pennsylvania Railroad, brought this action claiming that
their former employer denied them certain seniority rights
guaranteed by § 8 of the Selective Training and Service Act of
1940. [
Footnote 1] Section
8(b)(B) of that Act provides that upon application by any former
employee who has satisfactorily completed his military service, a
private employer "shall restore" such honorably discharged
serviceman to his former
"position or to a position of like seniority, status, and pay
unless the employer's circumstances have so changed as to make it
impossible or unreasonable to do so."
Section 8(c)
Page 383 U. S. 227
reemphasizes § 8(b)(B) by providing that any person so restored
"shall be so restored without loss of seniority."
The facts in this case are undisputed. In 1941 and 1942, the six
petitioners began working as firemen on tugboats owned by the
Pennsylvania Railroad and operated in the Port of New York.
Petitioners left their jobs in 1942 and 1943 to enter the armed
services, and, after serving three years or more each, received an
honorable discharge. Shortly after discharge, each was restored by
the railroad to his former position as fireman with the same amount
of seniority he had before leaving plus credit for the time spent
in the armed forces, as required by the 1940 Act. All six continued
to work for the railroad until 1960. In 1959, a labor dispute broke
out when the Pennsylvania and nine other railroad carriers
operating tugboats claimed that firemen were not necessary on the
new diesel tugs, and the owners of the tugs sought to abolish the
craft and class of fireman. The unions affected called a strike.
This strike was settled in 1960, when petitioners' union and the
railroads entered an agreement which abolished the position of
fireman on all diesel tugs. As their part of the bargain, the
railroads agreed to retain in their employ firemen with 20 years or
more seniority who desired to remain, but all firemen with less
than 20 years seniority were discharged. To make this settlement
more acceptable to the employees, those who were discharged or who
did not desire to stay with the railroads were paid a severance or
separation allowance based on a formula set out in the agreement.
Each of the petitioners involved in this case left his job with the
Pennsylvania Railroad and received a separation allowance, but each
received less than he thought was due. This lawsuit was begun as an
attempt to recover what each believed was owed him by the
railroad.
The amount of the separation allowances was determined,
according to the language of the agreement, by
Page 383 U. S. 228
the length of "compensated service" with the railroad. A month
of "compensated service" was defined as any month in which the
employee worked one or more days, and "a year of compensated
service is 12 such months or major portion thereof." In computing
petitioners' separation allowances, the railroad did not include
the years spent in the armed forces as years of "compensated
service." Petitioners claim this was error and contrary to § 8 of
the Selective Training and Service Act of 1940. Each petitioner
received $1,242.60 less than he would have if given credit for the
three or more years he spent in military service, and the parties
have stipulated that, if petitioners are entitled to have the time
in the service included in determining severance pay, judgment for
this amount should be rendered for each of them. The District Court
rendered judgment for petitioners. The Court of Appeals reversed,
holding, contrary to the District Court, that the petitioners were
not entitled to credit for their time in the service in computing
the allowances because the allowances did not come within the
concepts of "seniority, status, and pay." 341 F.2d 72.
The language of the 1940 Act clearly manifests a purpose and
desire on the part of Congress to provide as nearly as possible
that persons called to serve their country in the armed forces
should, upon returning to work in civilian life, resume their old
employment without any loss because of their service to their
country. Section 8(b)(B) of the statute requires that private
employers reinstate their former employees who are honorably
discharged veterans "to [their former] position or to a position of
like seniority, status, and pay," and § 8(c) provides that such a
person "shall be so restored without loss of seniority." This means
that, for the purpose of determining seniority the returning
veteran is to be treated as though he has been continuously
employed during the period spent in the armed forces.
Fishgold
v.
Page 383 U. S. 229
Sullivan Drydock & Repair Corp., 328 U.
S. 275,
328 U. S.
284-285. The continuing purpose of Congress in this
matter was again shown in the Universal Military Training and
Service Act, 62 Stat. 604, as amended, 50 U.S.C. App. § 451
et
seq. (1964 ed.). Section 9(c)(2) of that Act provides:
"It is hereby declared to be the sense of the Congress that any
person who is restored to a position in accordance with the
provisions of paragraph (A) or (B) of subsection (b) (of this
section) 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."
Respondent railroad does not quarrel with this interpretation of
the statute, but insists that the severance pay involved here was
not based on seniority, and that §§ 8(b)(B) and (c) are wholly
inapplicable to this case.
The term "seniority" is nowhere defined in the Act, but it
derives its content from private employment practices and
agreements. This does not mean, however, that employers and unions
are empowered by the use of transparent labels and definitions to
deprive a veteran of substantial rights guaranteed by the Act. As
we said in
Fishgold v. Sullivan Drydock & Repair Corp.,
supra,
"[N]o practice of employers or agreements between employers and
unions can cut down the service adjustment benefits which Congress
has secured the veteran under the Act."
At
328 U. S. 285.
The term "seniority" is not to be limited by a narrow, technical
definition, but must be given a meaning that is consonant with the
intention of Congress as expressed in the 1940 Act. That intention
was to preserve for the returning veterans the rights and benefits
which would have automatically accrued to them had they remained in
private employment rather than responding to
Page 383 U. S. 230
the call of their country. In this case, there can be no doubt
that the amounts of the severance payments were based primarily on
the employees' length of service with the railroad. The railroad
contends, however, that the allowances were not based on seniority,
but on the actual total service rendered by the employee. This is
hardly consistent with the bizarre results possible under the
definition of "compensated service." As the Government [
Footnote 2] points out, it is possible
under the agreement for an employee to receive credit for a whole
year of "compensated service" by working a mere seven days. There
would be no distinction whatever between the man who worked one day
a month for seven months and the man who worked 365 days in a year.
The use of the label "compensated service" cannot obscure the fact
that the real nature of these payments was compensation for loss of
jobs. And the cost to an employee of losing his job is not measured
by how much 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 increase in
proportion to the amount of seniority, and it is only natural that
those with the most seniority should receive the highest
allowances, since they were giving up more rights and benefits than
those with less seniority. The requirements of the 1940 Act are not
satisfied by giving returning veterans seniority in some general
abstract sense and then denying them the perquisites and benefits
that flow from it. We think it clear that the amount of these
allowances is just as much a perquisite of seniority as the more
traditional benefits such as work preference and order of lay-off
and recall. We hold that the failure to credit petitioners'
"compensated service" time with the
Page 383 U. S. 231
period spent in the armed services does not accord petitioners
the right to be reinstated "without loss of seniority" guaranteed
by §§ 8(b)(B) and (c).
What we have said makes it unnecessary to discuss in detail the
Court of Appeals' holding that these allowances did not come within
the concepts of "seniority, status, and pay," and thus were
governed not by § 8(b)(B) and the part of § 8(c) relating to
seniority, but rather by the clause in § 8(c) stating that
returning veterans
"shall be entitled to participate in insurance or other benefits
offered by the 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. . . ."
The Government contends that the "other benefits" clause of §
8(c) was added to the bill
"for the express purpose of entitling employees to receive,
while in service, such benefits as their employers accorded
employees on leave of absence."
The legislative history referred to in the Government's brief
persuasively supports such a purpose. [
Footnote 3]
Page 383 U. S. 232
This argument of the Government -- that the "insurance or other
benefits" clause was put in to provide these company benefits for
the serviceman at the time he was in the armed forces -- also finds
some support in the fact that § 8(c) provides that the serviceman
would be entitled to these benefits only if they were "in effect
with the employer at the time such person was inducted into such
forces. . . ." Without attempting in this case to determine the
exact scope of this provision of § 8(c), it is enough to say that
we consider that it was intended to add certain protections to the
veteran, and not to take away those which are granted him by §
8(b)(B) and the other clauses of § 8(c).
Since the Court of Appeals held that the provisions of § 8(b)(B)
did not apply to separation allowances, it found it unnecessary to
decide an alternative ground which the railroad contended should
cause reversal. That contention was that, since the agreement
between the railroad and the union was entered into more than one
year after petitioners were restored to their employment, the Act
has no application to any rights created by the agreement. This
argument rested on that part of § 8(c) which provides that a
veteran who is restored to employment "shall not be discharged from
such position without cause within one year after such
restoration." The District Court rejected the contention as having
no merit. We agree with the District Court, and believe this
contention to be so wholly without merit that the case need not be
remanded to the Court of Appeals for its decision on the point. In
Oakley v. Louisville & N. R. Co., 338 U.
S. 278,
338 U. S. 284,
we said:
"[T]he expiration of the year did not terminate the veteran's
right to the seniority to which he was entitled by virtue of the
Act's treatment of him as though he had remained continuously in
his civilian employment; nor did it open the door to
discrimination
Page 383 U. S. 233
against him, as a veteran. . . . His seniority status . . .
continues beyond the first year of his reemployment. . . ."
What we said there governs this case. The District Court was
correct in rejecting this contention of the railroad.
In the Court of Appeals, the railroad also contended that the
District Court had improperly computed the interest owing on the
judgment awarded the plaintiffs. Because of its holding that
petitioners were entitled to no recovery at all, the Court of
Appeals declined to decide the question of interest. The record
before us does not present that question with sufficient clarity
for us to pass upon it.
We affirm the judgment of the District Court holding that
petitioners are entitled to recover from the railroad the
stipulated damages due them because they are entitled to credit for
the full amount of time served in the armed forces in calculating
their severance pay. But the cause is remanded to the Court of
Appeals for further consideration of the interest contention.
Reversed and remanded.
THE CHIEF JUSTICE took no part in the decision of this case.
[
Footnote 1]
54 Stat. 890, as amended, 50 U.S.C.App. § 308 (1946 ed.).
Section 8 of the 1940 Act is now § 9 of the Universal Military
Training and Service Act, 62 Stat. 614, as amended, 50 U.S.C.App. §
459 (1964 ed.).
[
Footnote 2]
The Department of Justice is representing petitioners in this
case pursuant to § 8(e) of the 1940 Act.
[
Footnote 3]
Senator Sheppard, in explaining an amendment which included the
"other benefits" provision, said:
"That amendment would make certain that all trainees would
receive the same insurance and other benefits as those who are on
furlough or leave of absence in private life. It seems to me to be
a good suggestion."
86 Cong.Rec. 10914. And Congressman May, the Chairman of the
House Committee on Military Affairs, had this colloquy with another
Congressman on the same question:
"Mr. MILLER. In reference to insurance, will that apply to group
insurance? Many industrial plants, of course, carry group
insurance. Under those contracts, they continue their participation
while a man is on vacation or on furlough. Would they continue
those policies in force?"
"Mr. MAY. This would continue them in force, and that is the
very purpose of the legislation."
86 Cong.Rec. 11702.