Case Name: LEON v. DETROIT HARVESTER COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1961-06-29
Citations: 363 Mich. 366
Docket Number: Docket No. 30, Calendar No. 47,573
Parties: LEON v. DETROIT HARVESTER COMPANY.
Judges: Smith, Black, Edwards, and Kavanagh, JJ., concurred with Souris, J.
Reporter: Michigan Reports
Volume: 363
Pages: 366–379

Head Matter:
LEON v. DETROIT HARVESTER COMPANY.
1. Labor Relations — Collective Bargaining Agreement — Extensions — Vacation Pat.
Recovery, if any, for vacation pay under extension of collective bargaining agreement would be limited to the period during which the extension was in effect.
2. Same — Construction of Extension of Bargaining Agreement— Vacation Pay.
Vacation pay provisions of extension of collective bargaining agreement are construed as requiring payment of pro rata benefits upon expiration of extended agreement, in determining intent of parties to the agreement so as to give effect to all provisions of the extension agreement as of the time the extensions were made.
Dethmers, C. J., and Carr and Kelly, JJ., dissenting.
Appehl from Wayne; Murphy (Thomas J.), J.
Submitted January 12, 1961.
(Docket No. 30, Calendar No. 47,573.)
Decided June 29, 1961.
References for Points in Headnotes
[1, 2] 31 Am Jur, Labor §§ 104, 111.
Construction and effect of vacation pay clause in collective labor agreement. 30 ALR2d 351.
Construction and effect of termination and automatic renewal provisions in collective bargaining agreements. 17 ALR2d 754.
Action by Philip Leon, in his own right and as assignee of 49 others, against Detroit Harvester ■Company, a Michigan corporation, their former employer, for vacation pay agreed in union contract and by reason of extensions thereof. Judgment for defendant. Plaintiff appeals.
Reversed and remanded.
Philip A. Gillis, for plaintiff.
Crawford, Sweeny, Dodd & Kerr, for defendant.

Opinion:
Souris, J.
Plaintiff and 49 others, for whom he sues as assignee, were employed by defendant company. The labor union which represented them had .a collective bargaining agreement with defendant which covered the periods from September 29, 1952, to September 29,1953, and from that date to September 29, 1954. Before the latter date negotiations commenced between the contracting parties for a new agreement and just prior to the expiration date it was extended by mutual agreement first, for a 30-day period, then for varying periods from time to time during continuing negotiations until it was allowed to expire on March 13, 1955. Thereafter, plaintiff and his assignors continued to work for defendant but without a collective bargaining agreement. It was stipulated at the trial that defendant's operations were unprofitable and that, for that reason, by the end of May, 1955, it had ceased operations and had discharged plaintiff and all of his assignors.
Suit was brought to recover unpaid vacation pay benefits claimed due under the expired collective bargaining agreement which provided, in part, as follows :
"Article 7 — Annual Vacation
"Sec. 1. Employees who on July 1st have been in the employ of the company for 1 year, and less than 3 years, and who, during the preceding 12' months, have worked not less than 75% of the available working time, shall receive 1 week's vacation,, with pay. Employees who on said date have been in the employ of the company for 3 years, but less-than 5 years, and who, during the preceding 12' months have worked not less than 75% of the available working time, shall receive 50 hours' vacation, with pay. Employees who on said date have been in the employ of the company for 5 years or more, and who during the preceding 12 months have worked not less than 75% of the available working time, shall receive 2 weeks' vacation, with pay.
"(A) Employees who on said date have been in the employ of the company 15 years or more, and who, during the preceding 12 months have worked not less than 75% of the available working time, shall receive 3 weeks' vacation, with pay.
"Sec. 2. Vacation pay shall be computed by multiplying the employee's regular straight time hourly earnings by the number of hours the plant is regularly scheduled to operate, not exceeding 48 hours per week.
"Sec. 3. The vacation period for all hourly rated employees shall be from June 1st to September 15th. In computing eligibility for vacation hereunder, any employee whose anniversary date of hiring falls within the dates of the vacation period shall be deemed to be eligible for the maximum period as provided for in section 1 above, irrespective of actual date of such employee's vacation."
Although the declaration is not entirely clear on the point, the pretrial statement limited plaintiff's claims to vacation pay benefits on a pro rata basis-for the period immediately preceding March 13,1955, the expiration date of the agreement. In his brief' on appeal, however, plaintiff claims he is entitled to benefits computed as of the date he and each of his assignors respectively terminated their employment with defendant. The circuit judge who tried the case on stipulated facts entered a judgment of no cause of action and did not squarely determine the scope of plaintiff's claims for relief. On appeal plaintiff asserts as 1 basis for recovery that if the contract is construed to require employment hy defendant on July 1st as a condition precedent to qualification for vacation pay benefits, the condition should be deemed waived to permit payment on a pro rata basis, at the very least, because he and his assignors were prevented by their discharge hy defendant, through no fault of their own, from compliance with the condition.
This argument overlooks the fact that at the time of discharge the collective bargaining agreement was no longer in effect. In the absence of any proof of an agreement, express or implied, hy defendant to pay its employees vacation pay benefits during the terminal period from March 13, 1955, to the dates of their discharge, there is no basis upon which plaintiff can claim such benefits for that period. We conclude that plaintiff's claims must stand or fall upon the collective bargaining agreement for the period immediately preceding March 13, 1955, the date of the agreement's expiration.
Plaintiff contends in his brief that the language of section 1 of the agreement is ambiguous and, therefore, justifies construction to permit qualification for vacation pay benefits even in the absence of employment on July 1st. Whatever merit there may he in plaintiff's contention of contractual ambiguity, his argument applies only to the collective bargaining agreement upon its execution and during the 2; full 1-year periods it was in effect. But, on September 29, 1954, the parties thereto extended the agreement for 30 days, and again subsequently for varying periods of time until it was allowed to expire on March 13, 1955. We are not here concerned with what the parties intended in September of 1953. We- are concerned with what the parties contemplated with reference to vacation pay benefits when the contract was extended in September of 1954 until October 29,1954. It is, of course, as of the extension dates we must construe the language to determine the intention of the parties. Klever v. Klever, 333 Mich 179, and Sobezak v. Kotwicki, 347 Mich 242. The vacation pay provisions of the contract, considered as of the dates of extensions, have no meaning whatever unless they are construed to require payment of pro rata benefits upon expiration of the extended agreement. That the parties so intended logically follows analysis of the provisions of the contract as of the dates of its extensions.
On September 29, 1954, when it was mutually extended for 1 month, both parties knew that article 7 quoted above could never be fully implemented for any of the defendant's employees because the extension was scheduled to expire before the next June 1st, the first date any employee could claim full vacation pay benefits under section 3. In construing this contract as of the various dates of its extensions, we must give effect to all of its provisions if it is possible to do so. Galperin v. Michelson, 301 Mich 491; Duval v. Aetna Casualty & Surety Co., 304 Mich 397; City of Detroit v. A. W. Kutsche & Co., 309 Mich 700; Singer v. Goff, 334 Mich 163; Burton v. Travelers Insurance Co., 341 Mich 30; Associated Truck Lines, Inc., v. Baer, 346 Mich 106. It does no violence to the language of article 7 to construe it, as we do, to réquire payment of pro rata vacation pay benefits earned by defendant's employees up to the dates of expiration of the various extension agreements culminating with the final extension which expired on March 13, 1955. Not to construe the extension agreements in that fashion would require us to say that the parties attributed no rational meaning to the words of article 7.
Our ruling in this case is not inconsistent with our ruling or our reasoning in Treloar v. Steggeman, 333 Mich 166. In that case, this Court held the contractual language specifically required an employee to be on the company's seniority list on a specified future date as a condition precedent to qualification for compensation in lieu of vacation. The future date specified in the contract, on the date of its execution, was clearly within the contemplation of the parties a date which would occur within the normal term of the contract. The fact that the contract was terminated legally prior thereto cannot alter the meaning of the language as intended by the parties when the contract was made. In the case at har, our concern is likewise with the parties' intention, but that must be determined as of the time of extension, not as of the time the contract was first made.
We have been referred to a substantial number of authorities in other jurisdictions which seem to be in irreconcilable conflict (many of which are assembled in 30 ALR2d 351). Differences in contractual language used makes citation of these cases as authority extremely risky unless caution and discrimination are exercised. No case has been cited to us, and we have found none, which involves construction of a similar contractual provision as part of a short term extension agreement.
Judgment reversed and cause remanded for further proceedings in accordance with this opinion. Costs to plaintiff.
Smith, Black, Edwards, and Kavanagh, JJ., concurred with Souris, J.