606 F.2d 800 (8th Cir. 1979), 78-1701, Goodman v. McDonnell Douglas Corp.

Docket Nº:78-1701.
Citation:606 F.2d 800
Party Name:William E. GOODMAN, Estel W. Dunn, Paul J. Hepperman, Stanley Walker, Ronald Caldwell, Ronald D. Williams, Wesley D. Lancaster, Michael T. Zoellner, Jimmy R. Hults, Michael W. Ashbaugh, Eugene K. Bartlett, Peter Bastas, Gary R. Bauer, Larry J. Beadle, Richard L. Beckemeyer, Danny E. Bell, Burlington I. Benson, Walter G. Blank, Roger F. Boenecke, Wa
Case Date:October 01, 1979
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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606 F.2d 800 (8th Cir. 1979)

William E. GOODMAN, Estel W. Dunn, Paul J. Hepperman,

Stanley Walker, Ronald Caldwell, Ronald D. Williams, Wesley

D. Lancaster, Michael T. Zoellner, Jimmy R. Hults, Michael

W. Ashbaugh, Eugene K. Bartlett, Peter Bastas, Gary R.

Bauer, Larry J. Beadle, Richard L. Beckemeyer, Danny E.

Bell, Burlington I. Benson, Walter G. Blank, Roger F.

Boenecke, Warren M. Bogel, Anthony J. Bonmarito, William

Box, Jr., Gary R. Burleson, Joe C. Bushong, Hans C. Carney,

Patrick M. Carroll, Michael J. Cooke, Meryl G. Counts,

William R. Daugherty, Melvin G. Davis, Ronald M. Eudy,

William D. Floyd, James H. Foutch, John M. Gerardi, Harry E.

Gibson, Jr., John H. Gilmore, Robert A. Glastetter, Dennis

L. Goeway, Ronald J. Haar, Raymond K. Herberger, Robert J.

Hoffman, Gregory G. Holdman, Ronald J. Houle, Jackie D.

Hurt, Dennis E. Iborg, Jerry W. Isenhart, Sammy W. Johnson,

Robert L. Jones, Steve Kassa, Jr., Walter E. Klemme, Ronald

V. Kujawa, Lawrence B. Lang, Gary L. Little, Charles W.

Lovelace, Ronald W. Maag, Francis M. Marietta, Leonard A.

Marsey, James A. McDonald, Leo G. Mesnier, Jr., Paul R.

Milligan, Darrell A. Morris, George C. Moseman, Jr., Donald

L. Mouser, Ivan C. Niehaus, Edward N. Noah, Jr., Larry G.

Owens, Kenneth E. Pace, Paul M. Phillips, Robert H. Pirtle,

William H. Porzel, Michael J. Potts, Bernard A. Richter,

Richard C. Root, Eric J. Rueder, Walter F. Schaub, Daniel

Schomber, Kenneth D. Sellers, Larry W. Smith, Michael G.

Spray, Larry L. Summers, William Swafford, Thomas L. Talley,

Steven V. Taylor, Buford R. Thompson, Lindell R. Thompson,

Issac Threats, Jr., Glenn R. Travers, Terry F. Vaughn,

Artemus Wallace, Jr., Johnny M. Ward, Charles L. Warren,

Robert M. Weaver, Curtis P. West, Leland R. Whitaker, Ronnie

W. Whitt, David E. Williams, Wayne E. Williams, and Jack J.

Wilson, Appellants,

v.

McDONNELL DOUGLAS CORPORATION, Appellee.

No. 78-1701.

United States Court of Appeals, Eighth Circuit

October 1, 1979

Submitted June 12, 1979.

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Michael J. Singer, Atty., App. Staff, Civ. Div., Dept. of Justice, Washington, D.C. (argued), Barbara Allen Babcock, Asst. Atty. Gen. and Robert E. Kopp, Washington, D.C., William H. Berger, Atty., U.S. Dept. of Labor, Atlanta, Ga., and Robert D. Kingsland, U.S. Atty., St. Louis, Mo., on brief, for appellants.

Thomas C. Walsh, Bryan Cave, McPheeters & McRoberts, St. Louis, Mo. (argued), Dennis C. Donnelly and Craig A. Newman, St. Louis, Mo., on brief, for appellee.

Before GIBSON, Chief Judge, and ROSS and HENLEY, Circuit Judges.

GIBSON, Chief Judge.

Appellants, ninety-eight veterans of the United States Armed Forces who are present or former employees of McDonnell Douglas Corporation, brought suit against McDonnell Douglas pursuant to 38 U.S.C. § 2021 Et seq. (Veterans' Reemployment Rights Act) to recover for alleged violation of their reemployment rights. On August

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25, 1978, the District Court 1 denied appellants' motion for partial summary judgment 2 and granted appellee's motion to dismiss on the basis of laches. 3 The veterans appeal from the order dismissing their complaint with prejudice. Title 28 U.S.C., section 1291, vests this court with jurisdiction.

Each veteran left permanent employment with McDonnell Douglas to enter active duty with the armed services, was honorably discharged, and thereafter resumed employment with McDonnell Douglas. In reinstating the veterans, McDonnell Douglas followed its established policy.

McDonnell Douglas separates its employee operations into various job classifications. 4 Each job classification divides into three labor grades (3, 2, 1) and within each grade employees progress through a specific number of ten-week segments. After completing the progression through the ten-week segments, the employee enters a ten-week test period, after which he is evaluated to determine whether he is qualified for upgrading to the next grade. Because progression through the ten-week segments is automatic, McDonnell Douglas's employment policies provided that returning veterans should be reinstated at the top of the job grade and the classification in which they were employed at the time they left to enter military service, regardless of the number of ten-week segments within the grade that each veteran had completed prior to entering military service. Accordingly, upon reinstatement each veteran immediately entered the ten-week test period.

Following his reinstatement, at some point each veteran was found qualified to be upgraded to the next higher grade within his job classification, but was not in fact upgraded because the company had placed a freeze on upgrading to the next grade. McDonnell Douglas freezes upgrading whenever it determines that there is no current need for more employees in the higher grade or when a layoff is in effect in the higher job grade. Freezes have been utilized at McDonnell Douglas since the early 1950's and recognized in collective bargaining agreements since 1958. 5

The veterans contend that the company's failure to upgrade them immediately upon their qualification violated their statutory reemployment rights to be placed in the position they would have acquired by virtue of continued employment but for their absence in military service. See Tilton v. Missouri Pacific Railroad Co., 376 U.S. 169, 175, 181, 84 S.Ct. 595, 11 L.Ed.2d 590 (1964); Oakley v. Louisville & Nashville Railroad Co., 338 U.S. 278, 283, 70 S.Ct. 119, 94 L.Ed. 87 (1949); Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284-85, 66 S.Ct. 1105, 90 L.Ed. 1230 (1946); Barrett v. Grand Trunk Western Railroad Co., 581 F.2d 132, 136 (7th Cir. 1978), Cert. denied, 440 U.S. 946, 99 S.Ct. 1423, 59 L.Ed.2d 643 (1979). The freezes in upgrading were not in effect while appellants were engaged in military service, since skilled labor is in much shorter supply during a war economy than during the vagaries of a peacetime economy. Thus there would have been no delay in the veterans' upgrading had they received their qualification during the period of time they spent in military service.

McDonnell Douglas resists the veterans' interpretation of their rights on the basis

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that their advancement depended upon the company's discretionary choice regarding both whether the veteran was qualified for upgrading and whether a freeze in upgrading should be put into effect. It asserts that these discretionary choices would preclude the returning veterans from showing with reasonable certainty that, as a matter of foresight, they would have enjoyed advancement simply by virtue of continuing employment during the time in military service. See McKinney v. Missouri-Kansas-Texas Railroad Co., 357 U.S. 265, 272, 78 S.Ct. 1222, 2 L.Ed.2d 1305 (1958).

The veterans were reinstated at various times between 1968 and 1972 inclusive. 6 Certain appellants, disappointed by the delay in upgrading, complained to the Department of Labor (hereinafter sometimes referred to as the Department) within a few months after having been rated qualified for upgrading. 7 The Department responded to the veterans' complaints by indicating approval of McDonnell Douglas's treatment. This response was consonant with the Department's position that it had assumed in response to previous complaints from veterans returning to employment with McDonnell Douglas, some dating back at least as far as 1962. Since the Department reports its investigation of complaints to both the company which is the subject of the challenged practice and the complainant, both McDonnell Douglas and the veteran appellants were aware of the Department's position. 8

Unsatisfied by this response from the Department of Labor, certain veterans continued to pursue their claims by applying pressure through the union to effectuate a change in McDonnell Douglas's practice. These efforts realized fruition in January of 1972 when McDonnell Douglas's labor negotiator acceded to the union's request and amended the collective bargaining agreement effective May 15, 1972. 9

Thereafter, sometime in August or September of 1972, Department of Labor representatives informed McDonnell Douglas that because 120 or more veterans had recently complained to them they were reinvestigating its practice in regard to delay in upgrading. McDonnell Douglas made a written response to the Department in October of 1972. The Department informed the company in mid-1976 that it considered

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their practice illegal. 10 Negotiations between the Department and McDonnell Douglas ensued but did not produce agreement, and on June 20, 1977, the Labor Department forwarded the cases to the Department of Justice which, on September 29, 1977, filed suit on behalf of the veterans.

The sole issue on appeal is whether the District Court abused its discretion in dismissing the complaint with prejudice on the basis of the doctrine of laches. 11

The doctrine of laches is an equitable defense, and the United States Supreme Court in Gardner v. Panama Railroad Co., 342 U.S. 29, 30, 72 S.Ct. 12, 13, 96 L.Ed. 31 (1951), stated that "the existence of laches is a question primarily addressed to the discretion of the trial court." This does not mean, however, that the District Court's decision is unfettered by appropriate standards or shielded from thorough appellate review. Albermarle Paper Co. v. Moody, 422 U.S. 405, 416, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). The basic elements of laches are well established. For the application of the doctrine of laches to bar a lawsuit, the plaintiff must be guilty of unreasonable and inexcusable delay that has resulted in prejudice to the defendant. Gardner v. Panama...

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