Leib v. Georgia-Pacific Corp.
| Decision Date | 05 February 1991 |
| Docket Number | No. 89-2939,GEORGIA-PACIFIC,89-2939 |
| Citation | 925 F.2d 240 |
| Parties | 136 L.R.R.M. (BNA) 2509, 59 USLW 2560, 118 Lab.Cas. P 10,533 Brian S. LEIB, Appellant, v.CORPORATION, Appellee. Eighth Circuit |
| Court | U.S. Court of Appeals — Eighth Circuit |
Robert M. Loeb, Washington, D.C., for appellant.
David A. Rhem, Grand Rapids, Mich., for appellee.
Before JOHN R. GIBSON, Circuit Judge, HEANEY, Senior Circuit Judge, and LARSON, * Senior District Judge.
Brian Leib appeals from the district court's summary dismissal of his action under the Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. Secs. 2021 et seq. The district court granted Georgia-Pacific Corporation's motion for summary judgment, holding as a matter of law that Georgia-Pacific was not a "successor in interest" under the Act and hence was not required to restore Leib to the position he held prior to his enlistment and honorable discharge from the United States Air Force. See id. at Sec. 2021(a)(B)(i). We reverse and remand for further proceedings.
In July, 1984, Georgia-Pacific purchased a corrugated container/folding carton manufacturing plant in Dubuque, Iowa from St. Regis. As a result of the sale, Georgia-Pacific assumed ownership of all real property, buildings, timber leases, equipment, furniture, tools, supplies, raw materials, work in process, inventory, customer and supplier lists, patents, trademarks, copyrights, and trade secrets used in connection with the Dubuque plant. Georgia-Pacific also acquired from St. Regis a list of all plant employees and obtained the right to assume St. Regis' collective bargaining agreement with its employees. Upon completion of the sale, Georgia-Pacific hired a majority of the former St. Regis employees, recognized the labor union which had been representing the St. Regis employees, and credited the employees' seniority with St. Regis for vacation and pension vesting purposes. Georgia-Pacific operates the Dubuque plant today by making the same product under the same conditions using the same equipment and facilities as St. Regis formerly did.
Prior to joining the Air Force in December, 1983, Brian Leib was a press helper at the St. Regis plant. Leib was serving in the military when Georgia-Pacific commenced operations in Dubuque. While in the military, Leib received a W-2 form in a Georgia-Pacific envelope. Upon his honorable discharge in December, 1987, Leib sought reemployment with Georgia-Pacific as a returning veteran. Georgia-Pacific refused to recognize Leib's rights as a veteran, claiming it had purchased only the assets of St. Regis, and hence was not obligated as a "successor in interest" under the veterans' reemployment rights statute, 38 U.S.C. Secs. 2021-2026.
The government initiated this action on Leib's behalf, 1 arguing that Georgia-Pacific should be regarded as St. Regis' successor in interest for purposes of rehiring returning veterans who were former St. Regis employees. The government maintains that the court should examine the totality of the circumstances, including Georgia-Pacific's operation of the same business at the same location with the same equipment and almost all of the same employees, in determining the successorship question. In granting Georgia-Pacific's summary judgment motion, the district court held that the only relevant factor was whether there was continuity in the identity of ownership and control between Georgia-Pacific and St. Regis. Because there was no common ownership, the court concluded Georgia-Pacific was not a successor in interest under the veterans' reemployment statute. We are presented on appeal with the issue of the proper legal standard for determining when a company is a "successor in interest" under the veterans' reemployment rights statute.
Statutory reemployment rights for veterans date from the nation's first peacetime draft law, enacted in 1940. Section 8 of the Selective Training and Service Act of 1940 provided that a veteran returning from active duty was entitled to be reinstated to the civilian position the veteran had left or one of like seniority, status, and pay. See 38 U.S.C. Sec. 2021(a). 2 The 1940 legislation was an effort by Congress "to offer [veterans] as much protection with respect to reemployment and retention of employment benefits as is within reasonable bounds." 86 Cong.Rec. 10095 (1940) (remarks of Sen. Sheppard) (cited in Carter v. United States, 407 F.2d 1238, 1243 (D.C.Cir.1968)).
Finding a civilian job upon completion of military service had been difficult for many returning World War I veterans, whose former jobs had been filled by others drawn into the labor force by wartime production needs. Carter, 407 F.2d at 1243. 3 The statutory right to reinstatement was intended both to bolster the morale of those serving their country and to facilitate their reentry into the "highly competitive world of job finding without the handicap of a long absence from work." Id. (citing Kay v. General Cable Corp., 59 F.Supp. 358, 360 (D.N.J.1945)).
That worry over losing a job might have substantial adverse impact on the morale of the armed services is plain. Indeed, the morale problem was viewed as the source of Congressional power to enact reemployment laws writing new terms into private labor contracts beyond the normal reach of Congress.
Carter, 407 F.2d at 1243 (footnote omitted). See Peel v. Florida Dep't of Transportation, 600 F.2d 1070, 1084 (5th Cir.1979). 4
Congress continued the peacetime draft after World War II in response to the "consistent dissipation in the strength of our armed forces ... as new enlistments have failed to keep pace with the separation from the services of those who were leaving upon the completion of wartime obligations to serve." S.Rep. No. 1268, 80th Cong., 2nd Sess. (1948), reprinted in 1948 U.S.Code Cong.Serv.1989. The Selective Service Act of 1948 expanded the reemployment portion of the law to include not only the returning veteran's former employer, but also any "successor in interest." Rix v. Turnbull-Novak, Inc., 245 F.2d 809, 811 (8th Cir.1957). Subsequent legislation has further expanded the reach of the statute by adding state and local government employers and by extending reemployment rights to reservists, employees returning from training duty, and those in the National Guard. See Monroe v. Standard Oil Co., 452 U.S. 549, 555, 101 S.Ct. 2510, 2514, 69 L.Ed.2d 226 (1981); Peel, 600 F.2d at 1073.
The statute Brian Leib invokes today thus provides as follows:
In the case of any person who is inducted into the Armed Forces of the United States ... for training and service and who leaves a position ... in the employ of any employer in order to perform such training and service, and (1) receives a certificate ... (relating to the satisfactory completion of military service), and (2) makes application for reemployment within ninety days after such person is relieved from such training and service ...
....
(B) if such position was in the employ of ... a private employer, such person shall--
(i) if still qualified to perform the duties of such position, be restored by such employer or the employer's successor in interest to such 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.
38 U.S.C. Sec. 2021(a).
Although the term "successor in interest" has been part of the statute since 1948, Congress has provided no definition of the phrase. This Court first considered its meaning in Rix v. Turnbull-Novak, Inc., 245 F.2d 809 (8th Cir.1957). Prior to serving in the military, plaintiff Rix was an inspector with the architectural firm J. Gordon Turnbull, Inc. at a salary of $500 per month. Upon Rix's honorable discharge, he was rehired by Turnbull as an assistant manager at a salary of $700 per month. Shortly after Rix had been rehired, the vice president in charge of the Kansas City office, Ed Novak, entered into an agreement to purchase the assets of J. Gordon Turnbull, Inc.'s Kansas City office. Novak transferred those assets, which included fixtures, all pending contracts, and the assumption of Turnbull, Inc.'s lease, to a corporation created to carry on the business, Turnbull-Novak, Inc. When Novak refused to continue to employ Rix as an assistant manager, Rix sued, claiming entitlement to this position under the veterans' reemployment rights statute.
There was no common ownership between J. Gordon Turnbull, Inc. and Turnbull-Novak Inc., however, and the district court initially granted summary judgment to Turnbull-Novak on the ground that it was not a "successor in interest" under the veterans' reemployment law. This Court reversed, stating that the issue of whether the defendant was a successor in interest "must be defined and decided upon a trial with findings of fact and conclusions of law." Rix, 245 F.2d at 812. While limiting the effect of its holding, 5 the Court recognized the government's argument that "[o]n its face the phrase 'successor in interest' would seem to include any form of transfer of the employer's business" and that:
"so long as the former employer's business is still in operation and the defendant now holds the interest, the veteran has reemployment rights against the present owner regardless of how he or it succeeded to the former owner's interest in the business."
On remand, the district court entered judgment in favor of the defendant, and the case was again appealed to this Court. The Court assumed on appeal that Turnbull-Novak was a successor in interest, and affirmed the judgment in its favor on the ground that plaintiff never sought reemployment to the same position he had left, but rather sought to perform work "of a distinctly different nature at a very substantial increase in pay," a position which was not protected by the veterans' reemployment statut...
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