Beckley v. Lipe-Rollway Corp., 77-CV-46.

• Decision Date: 15 March 1978
• Docket Number: No. 77-CV-46.,77-CV-46.
• Citation: 448 F. Supp. 563
• Parties: Joseph BECKLEY, Plaintiff, v. LIPE-ROLLWAY CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of New York

448 F. Supp. 563

Joseph BECKLEY, Plaintiff, v. LIPE-ROLLWAY CORPORATION, Defendant.

No. 77-CV-46.

United States District Court, N. D. New York.

March 15, 1978.

Paul V. French, U. S. Atty., Syracuse, N. Y., for plaintiff; Joseph R. Mathews, Asst. U. S. Atty., Syracuse, N. Y., William H. Berger, U. S. Dept. of Labor, Washington, D. C., of counsel.

Hancock, Estabrook, Ryan, Shove & Hust, Syracuse, N. Y., for defendant; James P. Burns, III, Syracuse, N. Y., of counsel.

MEMORANDUM-DECISION AND ORDER

MUNSON, District Judge.

This action is brought by a veteran who contends that defendant's refusal to credit the period of his military service toward the vesting of his rights in defendant's pension plan and toward the computation of pension payments under said plan violates 38 U.S.C. § 2021 et seq. (hereinafter referred to as the Act).¹ The case is now before the Court on plaintiff's motion for summary judgment.

Plaintiff was employed by defendant as a machine operator from September 14, 1966, to December 7, 1967, when he left his position to enter military service. After serving in the armed forces from December 15, 1967, to December 12, 1969, he received an honorable discharge and then applied for reemployment with defendant. On December 28, 1969, plaintiff was reinstated by defendant as a machine operator and has continued to work for defendant until the present time.

Defendant's "Pension Plan for Hourly Unit Employees" covers all permanent employees of defendant who are in an hourly unit. Under this plan, an employee's vesting rights and the computation of benefits to which he is entitled are determined by the amount of the employee's "credited service." Credited service is based upon the straight time hours for which the employee receives pay from defendant. An employee receives one year of credited service if he works 1750 or more hours during a single calendar year. If an employee works less than 1750 hours in a calendar year, he receives 1/10 year credit for every 175 hours worked. An employee who is temporarily absent from work because of occupational injury or disease is credited with the number of hours he would have been scheduled to work during such absence. On the other hand, an employee who is absent from his job because of military service does not receive any credited service for the time he is in the armed forces. Under the normal retirement provisions of the plan, an employee who has completed 10 or more years of credited service can retire and receive a pension at age 65. An employee who retires on or after February 15, 1974, receives monthly retirement benefits of $5.50 for each year of credited service.²

In enacting 38 U.S.C. § 2021 et seq., Congress intended to protect veterans returning to civilian jobs from being disadvantaged for having served in the armed forces. Foster v. Dravo Corporation, 420 U.S. 92, 93, 95 S.Ct. 879, 43 L.Ed.2d 44 (1975). The Act provides that an honorably discharged veteran, who applies for reemployment within 90 days after being discharged and who is still qualified to perform the duties of his former job, must be reinstated by his employer to his former position or "to a position of like seniority, status, and pay," and the Act further states that such employee shall be restored "without loss of seniority." 38 U.S.C. §§ 2021(a), (b)(1). In effect, the returning veteran's seniority in his civilian job is determined as if he had been continuously employed, at such job during the time he spent in the armed forces. 38 U.S.C. § 2021(b)(2); Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 284-85, 66 S.Ct. 1105, 90 L.Ed. 1230 (1946).

In Alabama Power Co. v. Davis, 431 U.S. 581, 97 S.Ct. 2002, 52 L.Ed.2d 595 (1977), the Supreme Court recently considered whether pension rights are rights of seniority guaranteed protection under the Act. The Court indicated that, in order to determine if a benefit is a right of seniority within the meaning of the Act, both the relative certainty of the benefit's accrual and the nature of the benefit itself have to be considered. The Court stated,

If the benefit would have accrued, with reasonable certainty, had the veteran been continuously employed by the private employer, and if it is in the nature of a reward for length of service, it is a `perquisite of seniority.' If, on the other hand, the veteran's right to the benefit at the time he entered the military was subject to a significant contingency, or if the benefit is in the nature of short term compensation for services rendered, it is not an aspect of seniority within the coverage of § 9.

431 U.S. at 589, 97 S.Ct. at 2007.

Under the Alabama Power pension plan, the amount of an employee's retirement benefits was determined by multiplying the employee's years of "accredited service" by an earnings factor. An employee received accredited service for service rendered to the company as a full-time, regular employee and for periods of authorized leave of absence with pay. Employees on leave of absence without regular pay and employees absent from their jobs because of military service did not receive any accredited service. An employee acquired vested rights under the plan after completing 20 years of service or after completing 15 years of service if the employee had attained the age of 50.

The Supreme Court in Alabama Power indicated that it was reasonably certain that, if Davis had remained continuously in his civilian job, he would have obtained accredited service for the time that he was in the military. While unpredictable occurrences might have intervened, the Court stated that Congress did not intend possibilities of this sort to defeat a veteran's seniority rights. 431 U.S. at 591-92, 97 S.Ct. 2002. The Court then focused upon the true nature of pension payments. It rejected the company's argument that, because accredited service was defined in terms of full-time service to the company, the pension payments should be viewed as compensation for service rendered. The Court stated that the true nature of pension payments was a reward for length of service. In the Court's opinion, the most important factor supporting this conclusion was the lengthy period required before pension rights would vest in an employee. 431 U.S. at 592-93, 97 S.Ct. 2002. The Court further noted that its conclusion was supported by the function played by pension plans in the employment system in that "a pension plan assures employees that by devoting a large portion of their working years to a single employer, they will achieve some financial security in their years of retirement." 431 U.S. at 594, 97 S.Ct. at 2010. Therefore, the Court held that Alabama Power was required to pay Davis the pension which he would have been entitled to receive if he had not served in the armed forces.

Defendant argues that the facts in the present case are sufficiently different from those in Alabama Power so as to justify a different result in this case. Defendant points out that the district court in Alabama Power found that the amount of work an employee actually performed for the company was not taken into account in computing pension benefits, 383 F.Supp. 880, 887 (N.D.Ala.1974), whereas the amount of time an employee works for the defendant in this case is used in computing the amount of and eligibility for pension benefits. An employee working for Alabama Power received accredited service for service rendered to the company while an employee working for the present defendant receives credited service for the number of hours...