Source: https://www.law.cornell.edu/supremecourt/text/447/191
Timestamp: 2015-11-27 13:20:03
Document Index: 89175715

Matched Legal Cases: ['§ 2021', '§ 2021', '§ 2021', '§ 2021', '§ 2', '§ 9', '§ 459', '§ 8', '§ 459']

Thomas E. COFFY, Petitioner, v. REPUBLIC STEEL CORP. | US Law | LII / Legal Information Institute
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447 U.S. 191 (100 S.Ct. 2100, 65 L.Ed.2d 53)
Thomas E. COFFY, Petitioner, v. REPUBLIC STEEL CORP.
[HTML] Syllabus The Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Act) provides that any person who leaves a permanent job to enter the military, satisfactorily completes military service, and applies for re-employment within 90 days of being discharged from the military must be reinstated to the former job "without loss of seniority," 38 U.S.C. 2021(b)(1). Upon being honorably discharged from military service, petitioner made timely application for reinstatement with respondent, his former employer. Because respondent was then in the process of laying off employees, petitioner was reinstated in layoff status. While laid off, he received weekly payments under the supplemental unemployment benefits (SUB) plan created by the applicable steel industry collective-bargaining agreement. Under the plan, an employee is entitled to receive SUB payments only if he has completed two years of continuous service prior to being laid off, and the amount of the weekly benefit is determined by his hourly wage rate, the number of his dependents, the amount of state unemployment compensation he is receiving, and the level of funding remaining in the plan. The length of time during which an employee receives SUB payments is determined by the number of credit units he has accumulated before being laid off, with one-half credit being accrued for each week in which he worked "any" hours, or was paid for "any" hours not worked (such as for vacation or jury duty), or lost "any" hours because he was performing certain union duties or was on disability leave. The plan also provides that if an employee enters the Armed Services, only the credit units credited to him at the time of his entry into the service shall be credited to him upon reinstatement as an employee with unbroken continuous service, except as may otherwise be required by law. Petitioner received SUB payments for only 25 weeks, whereas if he had been employed by respondent during his period of military service, he would have been entitled to 52 weeks of payments. Alleging that respondent violated his statutory re-employment rights by refusing to consider his military service time in computing the amount of SUB payments to which he was entitled, petitioner, represented by the Department of Justice pursuant to the Act, filed an action in Federal District Court, which ultimately held that SUB payments were not a perquisite of seniority entitled to statutory protection. The Court of Appeals affirmed.
While Coffy was laid off, he received weekly payments under the supplemental unemployment benefits (SUB) plan created by the collective-bargaining agreement between the major steel companies, including Republic, and the United Steelworkers of America (Steelworkers). Coffy received SUB payments for 25 weeks.
If he had been employed by Republic during his period of military service, he would have been entitled to 52 weeks of SUB payments. Coffy, represented by the Department of Justice pursuant to 38 U.S.C. 2022, filed this action in the United States District Court for the Northern District of Ohio, alleging that Republic violated his statutory re-employment rights by refusing to consider his military service time in computing the amount of SUB payments to which he was entitled.
On remand, the District Court adhered to its decision that SUB credits are not seniority rights entitled to statutory protection. 461 F.Supp. 344 (1978). The Court of Appeals affirmed on the opinion of the District Court. 590 F.2d 334 (1978). We granted certiorari, 444 U.S. 924, 100 S.Ct. 261, 62 L.Ed.2d 180 (1979), to resolve a conflict among the Circuits concerning this important question in the interpretation of the statute.
The Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Act), 38 U.S.C. 2021 et seq., requires that returning veterans be reinstated to the jobs they left for military service "or to a position of like seniority, status, and pay." § 2021(a)(B)(i).
The Act further provides that the veteran be reinstated "without loss of seniority." § 2021(b)(1). We interpreted the predecessor of § 2021
to mean that the returning 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 continuously during the war." Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284-285, 66 S.Ct. 1105, 1111, 90 L.Ed. 1230 (1946). Congress incorporated this principle into the present statute by providing that any person reinstated under the Act should be given "such status in the person's employment as the person would have enjoyed if such person had continued in such employment continuously" during the period of military service. § 2021(b)(2). The statute is to be liberally construed for the benefit of the returning veteran. Fishgold v. Sullivan Drydock & Repair Corp., supra, at 285, 66 S.Ct., at 1111.
We have several times had occasion to consider whether a particular type of benefit is a perquisite of seniority. Accardi v. Pennsylvania R. Co., 383 U.S. 225, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966), involved a claim for severance pay. The amount of the payment depended on the employee's length of "compensated service." Id., at 228, 86 S.Ct., at 770. We rejected the employer's argument that the payment was not based on seniority, but on total service to the company. Rather, we held, the "real nature" of the payments was compensation for the loss of the job. Id., at 230, 86 S.Ct., at 772. Because "the cost to an employee of losing his job is not measured by how much work he did in the past . . . but by the rights and benefits he forfeits by giving up his job"rights and benefits that are largely determined by senioritythe severance payment was "just as much a perquisite of seniority as the more traditional benefits such as work preference and order of lay-off and recall." Ibid.
Most recently, in Alabama Power Co. v. Davis, 431 U.S. 581, 97 S.Ct. 2002, 52 L.Ed.2d 595 (1977), we held that pension benefits were perquisites of seniority for purposes of the Act. Although the amount of the payment was directly dependent on the years of accredited service, the true nature of the benefits was "a reward for length of service," id., at 593, 97 S.Ct., at 2009. The lengthy period required for vesting, the use of payment formulas based on earnings at the time of retirement, and "the function of pension plans in the employment system"namely, to provide financial security to employees, assure a stable work force, and increase efficiencyall led to the conclusion that pension payments "are predominantly rewards for continuous employment with the same employer." Id., at 594, 97 S.Ct., at 2010. In Alabama Power, we summarized the principles that have emerged from the cases and concluded that they establish a two-pronged test for determining whether a benefit is a perquisite of seniority under the Act. First, there must be a reasonable certainty that the benefit would have accrued if the employee had not gone into the military service. Id., at 589, 97 S.Ct., at 2007. Second, the nature of the benefit must be "a reward for length of service," rather than a form of "short-term compensation for services rendered." Ibid.
A maximum of 52 credit units may be accrued by an employee at any one time. An employee is entitled to receive SUB payments only if he has completed two years of continuous service prior to being laid off. An employee who meets this threshold requirement may receive one week of supplemental unemployment benefits for each credit unit he has accumulated.
We turn now to the specific provisions of the steel industry SUB plan to determine whether they support or contradict our understanding of the general purpose of SUB programs. The District Court held that the availability of SUB payments was so closely related to hours actually worked as to demonstrate that the plan was a " 'bona fide effort to compensate for work actually performed.' " 461 F.Supp., at 346. That conclusion is at odds with the literal terms of the plan, which provide that SUB credits are earned for all weeks in which an employee has any hours in one of the three categories specified in § 2.0. This provision was the result of a 1962 modification of the original 1956 plan, which had directly correlated hours worked with credits earned by providing that 1/10 credit would be earned for every eight hours worked, up to a maximum of 1/2 unit per week. The District Court recognized that the present plan did not expressly relate entitlement to benefits to hours worked, but found this fact to be of no significance because " 'circumstances existing in the steel industry, as revealed by the uncontradicted evidence in this case, demonstrate that, in practice, the minimum workweek is 32 hours. . . . The plan must be construed in light of actual conditions in the steel industry. The possibility of an employee working only one hour during any week does not exist.' " Id., at 347.
Qualified employees who work some hours, but fewer than 32, receive benefits under the short-week provisions of the plan; those who do not work at all receive weekly benefits. The union's success in effectively achieving a guaranteed 32-hour week through the mechanism of the short-week benefit does not logically alter the nature of the weekly benefit negotiated as part of the same plan.
Even if eligibility for SUB payments were closely related to hours worked, that fact would not, by itself, render them compensation rather than seniority rights. We emphasized in Alabama Power that it is the nature of the benefit, not the formula by which it is calculated, that is the crucial factor, for "even the most traditional kinds of seniority privileges could be as easily tied to a work requirement as to the more usual criterion of time as an employee." 431 U.S., at 592, 97 S.Ct., at 2008. As we have explained, the specific provisions of the steel industry plan support, rather than contradict, our conclusion that SUB payments are in the nature of a reward for length of service.
The District Court concluded that SUB payments could not be perquisites of seniority for the further reason that the benefits are not proportionate to the length of service. Under the plan, an employee must have a minimum of two years' seniority to be eligible for SUB payments, no employee may accumulate more than 52 units of SUB credits, and the amount of the benefit does not increase with the length of service as would a pension benefit. Thus an employee who has worked continuously for two years will have met the threshold requirement and will also have accumulated 52 units of credit;
6 A benefit need not be meticulously proportioned to longevity of service to constitute a perquisite of seniority, however, as long as it performs a function akin to traditional forms of seniority. In fact, the very factors the District Court cited to show that SUB's are not forms of seniority benefits are equally relevant to demonstrate that they are not compensation for services rendered. An employee receives no benefits if he has worked for fewer than two years when he is laid off or if he voluntarily terminates his employment. Such a threshold requirement is more characteristic of seniority provisions than of compensation; in fact, other seniority benefits of the collective-bargaining agreement between Republic and the Steelworkers are also available only to employees with two years' seniority.
The complaint alleged a violation of § 9 of the Military Selective Service Act of 1967, 50 U.S.C. App. § 459 (1970 ed.). The provisions of that statute relating to veterans' re-employment rights were re-enacted without substantive change in Title IV of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. 2021 et seq.
Title 38 U.S.C. 2021 provides in relevant part:
"(B) if such position was in the employ of a . . . private employer, such person shall
The Selective Training and Service Act of 1940, ch. 720, § 8(b), 54 Stat. 890, later re-enacted as the Military Selective Service Act of 1967, 50 U.S.C. App. § 459 (1970 ed.), and subsequently re-enacted as 38 U.S.C. 2021 et seq. See n. 2, supra.