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Akers v. General Motors Corp.

decided: August 2, 1974.

FORREST T. AKERS, WILLIAM J. COOPER AND MICHAEL R. FURST, PLAINTIFFS-APPELLEES
v.
GENERAL MOTORS CORPORATION, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 72-C-157 CALE J. HOLDER, Judge.

Kiley, Senior Circuit Judge, Sprecher, Circuit Judge, and Jameson, Senior District Judge.*fn* Jameson, Senior District Judge (concurring).

Author: Kiley

KILEY, Senior Circuit Judge.

The United States Attorney and Solicitor of Labor filed suit in the district court under § 9 of the Military Selective Service and Training Act of 1967 (Act),*fn1 on behalf of plaintiffs, three returning veterans. The suit sought to compel plaintiffs' employer, General Motors Corporation (GM), to award them credit units allegedly accured during their military service under GM's Supplemental Unemployment Benefit Plan (SUB). Plaintiffs claimed that they were entitled to include those credit units in determining eligibility for and duration of SUB benefits due them during periods of layoff after reinstatement. Both GM and plaintiffs filed motions for summary judgment. The district court granted plaintiffs' motion. We affirm.

Plaintiffs Akers, Cooper and Furst were employed by GM during June and August 1968, until they entered the armed forces. Akers and Cooper were actually working for GM when they were called to active duty; Furst was in a layoff status. After their separation from the armed forces, each plaintiff filed a timely application with GM for reinstatement pursuant to § 9 of the Act, and was reinstated. GM immediately placed Akers and Furst in a layoff status,*fn2 and Cooper returned to active employment but was placed in a layoff status about two months later.

GM and plaintiffs' Union*fn3 had established SUB in their collective bargaining agreement, to provide weekly benefit payments supplementing state unemployment compensation. Under SUB, the length of time an employee in a layoff status receives benefits is based on the number of "credit units" he has accrued. These units are consumed during layoff periods as weekly benefits supplementing unemployment benefits. Hoffman v. Bethlehem Steel Corporation, 477 F.2d 860 (3rd Cir. 1973). Credit units are accrued "for each Work Week for which an Employee receives any pay from the Company" and for work weeks "for which he does not receive pay from the Company but for which he receives a [so-called] Leveling Week Benefit."*fn4 So that whether an employee actually works or not, one-half credit unit accrues to his benefit each week.*fn5 No employee under SUB may accrue to his credit at any one time more than 52 units.

The collective bargaining agreement expressly provided that an employee was not entitled to any SUB benefits while in military service, but would be entitled, on reinstatement to work, to be given the credits he accrued before entering service.*fn6 However, it further provided that "seniority will accumulate during the period" in which he is to be given a leave of absence to enter the service.*fn7

When GM, after reinstating plaintiffs, placed them in layoff status, it did not take into account SUB credit units accrued by the veterans during their respective periods of military service in computing the amount and duration of their SUB benefits. This suit in behalf of plaintiffs followed, claiming that GM thereby violated § 9 of the Act. The district court decided in favor of plaintiffs on the ground that SUB benefits were a "perquisite of seniority," and that under § 9 plaintiffs were accordingly entitled to the credit units.

The issue: Are returning veterans under the SUB plan here entitled to be given credit units during the period of their military service as part of the obligation owed them by GM under § 9(b) (B) (i) to restore them upon reinstatement to positions of "like seniority, status, and pay."*fn8

If SUB benefits are a "perquisite of seniority," the language of para. 112 of the Agreement and of § 9 of the Act clearly support the district court's decision.*fn9 Assuming arguendo plaintiffs are entitled to the benefits under § 9, the collective bargaining agreement to the contrary must give way. Hoffman v. Bethlehem Steel Corporation, supra, at 863.

Had plaintiffs not entered the military service, they would have been entitled under the collective bargaining agreement to accrue credit units at the rate of one-half credit for any week they received "any pay," and for weeks in which they received no pay (for example, in layoff status) they would receive a leveling week benefit while awaiting unemployment compensation.*fn10 We do not understand how GM can argue that "while on layoff" plaintiffs would not have accrued credit units in view of the clear language of Article III, Sec. 2(a) of the Supplemental Agreement. While in service, plaintiffs could not have lost "seniority" benefits; that would offend the Congressional purpose of § 9. Under the "escalator" rule announced in Fishgold v. Sullivan Drydock & Repair Corp., et al., 328 U.S. 275, 90 L. Ed. 1230, 66 S. Ct. 1105 (1946), plaintiffs here, having stepped off the escalator when entering service, as returning veterans stepped back on at the place they would have occupied had they not gotten off the escalator.

GM argues that plaintiffs are not entitled to the credits because while in service they were not then actively employed and that mere continuation of the employment relationship does not give them the right to the credits. There is no merit in this argument. They lost no seniority while in military service and under SUB were not required to perform actual work in order to receive benefits. See Accardi v. Pennsylvania R. Co., 383 U.S. 225, 15 L. Ed. 2d 717, 86 S. Ct. 768 (1966).

We think plaintiffs' situations are analogous to those of the employees in Accardi. There, plaintiffs had been denied credit for years of "compensated service," while serving three years in military service, in determining the amount of severance pay based on the length of service with the railroad. The bargaining agreement defined a month of compensated service as any month in which an employee worked "one or more days." The Second Circuit had held that the severance pay was not includable within "seniority, status, and pay." The Supreme Court unanimously reversed. The Court thought that a different result, validating the definition of "compensated service" in the agreement, would lead to the "bizarre result" that no distinction would be made between a man who worked "one day a month for seven months" and one who worked every day of the year. p. 230. The Court, in consideration of the "real nature" of the severance payments, held that the failure to credit Accardi with "compensated service" for the period of his military service was a loss of seniority in violation of § 8(b) (B), the predecessor to § 9(b) (B).*fn11

Under GM's contention here, an employee in a layoff status and doing no actual work is entitled, under the bargaining agreement, to accrue leveling week benefit credits; yet a veteran, also doing no actual work, is precluded by the Agreement from the same credits and benefits. See Foster v. Dravo Corporation, 490 F.2d 55, 59 (3rd Cir. 1973). Under GM's contention, when the returning veteran steps back on the escalator after his military service, he loses what the non-veteran has gained. We reject the contention because clearly, under SUB, credit units accrue as time passes, whether an employee does or does not work. We think the contention if sustained would discriminate against the ...


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