Coffy v. Republic Steel Corp

• Decision Date: 10 June 1980
• Docket Number: No. 79-81,79-81
• Citation: 447 U.S. 191,65 L.Ed.2d 53,100 S.Ct. 2100
• Parties: Thomas E. COFFY, Petitioner, v. REPUBLIC STEEL CORP
• Court: U.S. Supreme Court

447 U.S. 191

100 S.Ct. 2100

65 L.Ed.2d 53

Thomas E. COFFY, Petitioner,

v REPUBLIC STEEL CORP.

No. 79-81.

Argued Feb. 27, 1980.

Decided June 10, 1980.

Syllabus

The Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Act) provides that any person who leaves a permanent job to enter the military, satisfactorily completes military service, and applies for re-employment within 90 days of being discharged from the military must be reinstated to the former job "without loss of seniority," 38 U.S.C. § 2021(b)(1). Upon being honorably discharged from military service, petitioner made timely application for reinstatement with respondent, his former employer. Because respondent was then in the process of laying off employees, petitioner was reinstated in layoff status. While laid off, he received weekly payments under the supplemental unemployment benefits (SUB) plan created by the applicable steel industry collective-bargaining agreement. Under the plan, an employee is entitled to receive SUB payments only if he has completed two years of continuous service prior to being laid off, and the amount of the weekly benefit is determined by his hourly wage rate, the number of his dependents, the amount of state unemployment compensation he is receiving, and the level of funding remaining in the plan. The length of time during which an employee receives SUB payments is determined by the number of credit units he has accumulated before being laid off, with one-half credit being accrued for each week in which he worked "any" hours, or was paid for "any" hours not worked (such as for vacation or jury duty), or lost "any" hours because he was performing certain union duties or was on disability leave. The plan also provides that if an employee enters the Armed Services, only the credit units credited to him at the time of his entry into the service shall be credited to him upon reinstatement as an employee with unbroken continuous service, except as may otherwise be required by law. Petitioner received SUB payments for only 25 weeks, whereas if he had been employed by respondent during his period of military service, he would have been entitled to 52 weeks of payments. Alleging that respondent violated his statutory re-employment rights by refusing to consider his military service time in computing the amount of SUB payments to which he was entitled, petitioner, represented by the Department of Justice pursuant to the Act, filed an action in Federal District Court, which ultimately held that SUB payments were not a perquisite of seniority entitled to statutory protection. The Court of Appeals affirmed.

Held : SUB payments provided pursuant to the steel industry collective-bargaining agreement are perquisites of seniority to which a returning veteran is entitled under the Act. Pp. 195-206.

(a) Under the Act, which is to be liberally construed for the returning veteran's benefit, the veteran steps back on the seniority escalator at the precise point he would have occupied had he kept his position with his employer continuously during the period of military service. Cf. Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 66 S.Ct. 1105, 90 L.Ed. 1230. In determining whether a particular benefit qualifies as a perquisite of seniority under the Act, first, there must be a reasonable certainty that the benefit would have accrued if the employee had not gone into the military service, and, second, the "real nature" of the benefit must be "a reward for length of service," rather than "a form of short-term compensation for services rendered." Alabama Power Co. v. Davis, 431 U.S. 581, 589, 97 S.Ct. 2002, 2007, 52 L.Ed.2d 595. Pp. 195-198.

(b) The SUB plan satisfies the reasonable-certainty prong of the Alabama Power test, since if petitioner had remained continuously employed by respondent instead of entering the military, he would have accumulated credits from the date he was hired until the date he was laid off. The plan also satisfies the second prong of the test, because supplemental unemployment benefits are not a form of deferred short-term compensation, but are a reward for length of service closely analogous to traditional forms of seniority. The purpose and function of SUB plans is to provide economic security during periods of layoff to employees who have been in the service of the employer for a significant period, and the specific provisions of the steel industry SUB plan support this general purpose of SUB programs. Pp. 199-206.

6th Cir., 590 F.2d 334, reversed and remanded.

Alan I. Horowitz, Asst. Sol. Gen., Washington, D.C., for petitioner, pro hac vice, by special leave of Court.

Michael A. Nims, Cleveland, Ohio, for respondent.

Mr. Justice MARSHALL delivered the opinion of the Court.

The Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. § 2021 et seq., provides that any person who leaves a permanent job to enter the military, satisfactorily completes military service, and applies for re-employment within 90 days of being discharged from the military must be reinstated to the former job without loss of seniority. This case presents the question whether supplemental unemployment benefits provided pursuant to the steel industry collective-bargaining agreement are perquisites of seniority to which a returning veteran is entitled under the statute.

I

Petitioner Thomas Coffy was employed by respondent Republic Steel Corp. (Republic) from April 30, 1968, until September 17, 1968, and again from January 24, 1969, until September 9, 1969, when he entered military service. He served in the military until he was honorably discharged on August 16, 1971. He made timely application for reinstatement on September 14, 1971. Because Republic was then in the process of laying off employees and Coffy would already have been laid off if he had remained continuously employed during his period of military service, he was reinstated in lay-off status. Coffy was recalled to work on July 1, 1972.

While Coffy was laid off, he received weekly payments under the supplemental unemployment benefits (SUB) plan created by the collective-bargaining agreement between the major steel companies, including Republic, and the United Steelworkers of America (Steelworkers). Coffy received SUB payments for 25 weeks.¹ If he had been employed by Republic during his period of military service, he would have been entitled to 52 weeks of SUB payments. Coffy, represented by the Department of Justice pursuant to 38 U.S.C. § 2022, filed this action in the United States District Court for the Northern District of Ohio, alleging that Republic violated his statutory re-employment rights by refusing to consider his military service time in computing the amount of SUB payments to which he was entitled.²

The District Court, relying on Foster v. Dravo Corp., 420 U.S. 92, 95 S.Ct. 879, 43 L.Ed.2d 44 (1975), entered judgment for respondent. The court held that the plan was "a bona fide effort to relate qualification for weekly benefits . . . to work actually performed," App. to Pet. for Cert. 24a, and therefore the benefits were not a perquisite of seniority. While the case was pending on petitioner's appeal to the United States Court of Appeals for the Sixth Circuit, we held in Alabama Power Co. v. Davis, 431 U.S. 581, 97 S.Ct. 2002, 52 L.Ed.2d 595 (1977), that pension benefits are perquisites of seniority protected under the statute. The Court of Appeals sua sponte vacated the District Court's judgment and remanded for reconsideration in light of Alabama Power.

On remand, the District Court adhered to its decision that SUB credits are not seniority rights entitled to statutory protection. 461 F.Supp. 344 (1978). The Court of Appeals affirmed on the opinion of the District Court. 590 F.2d 334 (1978). We granted certiorari, 444 U.S. 924, 100 S.Ct. 261, 62 L.Ed.2d 180 (1979), to resolve a conflict among the Circuits concerning this important question in the interpretation of the statute.³ We now reverse.

II

The Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Act), 38 U.S.C. § 2021 et seq., requires that returning veterans be reinstated to the jobs they left for military service "or to a position of like seniority, status, and pay." § 2021(a)(B)(i).⁴ The Act further provides that the veteran be reinstated "without loss of seniority." § 2021(b)(1). We interpreted the predecessor of § 2021 ⁵ to mean that the returning veteran "does not step back on the seniority escalator at the point he stepped off. He steps back on at the precise point he would have occupied had he kept his position continuously during the war." Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284-285, 66 S.Ct. 1105, 1111, 90 L.Ed. 1230 (1946). Congress incorporated this principle into the present statute by providing that any person reinstated under the Act should be given "such status in the person's employment as the person would have enjoyed if such person had continued in such employment continuously" during the period of military service. § 2021(b)(2). The statute is to be liberally construed for the benefit of the returning veteran. Fishgold v. Sullivan Drydock & Repair Corp., supra, at 285, 66 S.Ct., at 1111.

We have several times had occasion to consider whether a particular type of benefit is a perquisite of seniority. Accardi v. Pennsylvania R. Co., 383 U.S. 225, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966), involved a claim for severance pay. The amount of the payment depended on the employee's length of "compensated service." Id., at 228, 86 S.Ct., at 770. We rejected the employer's argument that the payment was not based on seniority, but on total service to the company. Rather, we held, the "real nature" of the payments was compensation for the loss of the job. Id., at 230, 86 S.Ct., at 772. Because "the cost to an employee of losing his job is not measured by how much work he did in the past . . . but by the rights and benefits he...