Petition — American Motors Corp. v. Hanna

Uitic rpreme Court, U.S

83 - 1670 ‘FILED

APR 9 1984

TEVAS

No. CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1983

AMERICAN MOTORS CORPORATION,

Petitioner,

SAMUEL C. HANNA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

LAURENCE C. HAMMOND, JR.

(Counsel of Record)

FRED G. GROISS

ROBERT L. TITLEY

RALPH A. WEBER

Quarles & Brady

780 North Water Street

Milwaukee WI 53202

(414) 277-5000

QUESTION PRESENTED

WHETHER THE TOLLING OF BACKPAY LIABILITY AND

MITIGATION OF DAMAGES PRINCIPLES OF FORD

MOTOR CO. V. EEOC, 458 US. 219 (1982) (A TITLE VII

CASE), APPLY TO A CLAIM FOR BACKPAY UNDER THE

VIETNAM ERA VETERANS’ READJUSTMENT ASSIS-

TANCE ACT OF 1974, 38 U.S.C. §§ 2021-2026, WHEN THE

RETURNING SERVICEMAN INITIALLY ACCEPTS, BUT

LATER REJECTS, EMPLOYMENT IN HIS PRE-SERVICE

POSITION WITHOUT PRE-SERVICE SENORITY.

TABLE OF CONTENTS

Page

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a ssssuvinconccoceee 2

Reasons for Granting the WTit.................:..cccccceeseeseeees 5

I. THE DECISION BELOW CONFLICTS

WITH A DECISION OF THIS COURT

AND DISREGARDS THIS COURTS IN-

STRUCTION TO SIMPLIFY EMPLOY-

a 5

Il. THE COURT OF APPEALS’ FAILURE

TO CONSIDER ADEQUATELY FORD

MOTOR, AS DEMONSTRATED BY ITS

INCONSISTENT TREATMENT OF TITLE

VII PRECEDENTS, CALLS FOR AN

EXERCISE OF THIS COURT'S SUPER-

EE EEE ES x

Ill. THIS COURT SHOULD REQUIRE THE

COURT BELOW TO RECONSIDER ITS

REFUSAL TO APPLY FORD MOTOR.......... 9

TABLE OF AUTHORITIES

Cases

Dickerson v. Deluxe Check Printers, Inc.

rg ee, TL Ae: ce

Ford Motor Co. v. EEOC

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Franks ». Bowman Transportation Co.

Se ae FOR ncctsscecnnecttiitllianscnersetnissnssnstenens

Statute

Vietnam Era Veterans’ Readjustment Assistance

Act of 1974

gp oe RSE ehe Peter nen

Be ae Rs anmstitdiciciccentilicncossarethnsasetaldiccsctien’

Miscellaneous

P. Brest, Processes of Constitutional

pp SE ar ern T

R. Stern & E. Gressman, Supreme Court

Po a re aoe aes

Wechsler, Toward Neutral Principles of Consti-

tutional Law, 73 Harv. L. Rev. 1 (1959)...

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1983

AMERICAN MOTORS CORPORATION,

Petitioner,

SAMUEL C. HANNA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner American Motors Corporation (*AMC”)'petitions

this Court to review the judgment of the United States Court of

Appeals for the Seventh Circuit, entered in this action.on January

9, 1984.

OPINIONS BELOW

The opinion of the court of appeals is reported at 724 F.2d

1300 (7th Cir. 1984), and is reproduced in the Appendix to this

Petition at A-2.

The memorandum decision and order of the District Court

for the Eastern District of Wisconsin, dated October 27, 1982, is

‘AMC states pursuant to Rule 28.! that it has no parent company and no

subsidiary or affiliate whose stock is publicly traded.

reported at 113 L.R.R.M. (B.N.A.) 2945 (E.D. Wis. 1982), and is

reproduced in the Appendix at A-27.

A prior opinion of the court of appeals, dated January 5, 1981,

is unpublished and is reproduced in the Appendix at A-34. Another

prior opinion of the court of appeals ir this action, dated June 23,

1977, is reported at 557 F.2d 118 (7th Cir. 1977), and is repro-

duced in the Appendix at A-43.

Prior opinions of the district court in this action, dated

February 6, 1979 and May 19, 1976, are unpublished and repro-

duced in the Appendix at A-4] and A-51, respectively.

JURISDICTION

The Court of Appeals for the Seventh Circuit issued its deci-

sion and entered judgment on January 9, 1984. The court of ap-

peals entered an order denying AMC's Motion for Leave to File

an Untimely Rehearing Petition on March 5, 1984. This Petition

is filed within ninety days of January 9, 1984.

This Court has jurisdiction under 28 U.S.C. § 1254(1) to grant

a writ of certiorari to review the court of appeals’ decision and

judgment.

STATUTE INVOLVED

This action was brought under the Vietnam Era Veterans’

Readjustment Assistance Act of 1974, 38 U.S.C. § 2022 (1976),

which is reproduced in the Appendix at A-1.

STATEMENT OF THE CASE

A. Procedural Background

This case involves a claim by a veteran seeking job reinstate-

ment and backpay. Respondent Samuel C. Hanna began this ac-

tion in 1975 under the Vietnam Era Veterans’ Readjustment

Assistance Act of 1974 (“Veterans’ Act”), 38 U.S.C. § 2022, which

also grants the district court jurisdiction to hear the case.

This litigation proceeded in two stages. In the first stage, the

issue was whether Hanna met the criteria for reemployment rights

under the Veterans’ Act. The district court granted AMC’s mo-

tion for summary judgment on the grounds that Hanna had no

reemployment rights under the Veterans’ Act because he had been

a temporary employee not covered by the Veterans’ Act. See 38

US.C. § 2021(a). The court of appeals reversed, holding that Hanna

was entitled to be treated as a permanent employee, ordering that

Hanna be reinstated with seniority from the date of his pre-service

hire, and remanding for trial on the issue of backpay liability.

In the second stage of the litigation,’ the district court awarded

Hanna backpay, rejecting AMC’s argument that Ford Motor Co.

v. EEOC, 458 US. 219 (1982), applied to reduce Hanna’s damages

since Hanna had initially accepted and later rejected AMC’s offer

of a job without pre-service seniority. The district court, however,

reduced the amount of the award by 70% for 2 period when Han-

na had attended school full time, because his “full time schooling

interfered with his duty to mitigate his damages.” (App. at A-32.)

Hanna appealed and AMC cross-appealed from the backpay

determination. The court of appeals affirmed on AMC’s cross-

appeal, holding that Ford Motor Co. v. EEOC did not apply to

this Veterans’ Act case. On Hanna’s appeal, the court of appeals

reversed, holding that the backpay damages should not have been

reduced.

AMC challenges only the holding regarding Ford Motor Co.

v. EEOC.

B. Facts

Hanna was first hired by AMC on September 14, 1970. He

attached bolts, bumper guards, and brake hoses to automobiles as

they moved along an assembly line. He earned approximately $3.75

per hour.

"Following the remand, the dis‘rict court dismissed Hanna's action under

Fed. R. Civ. P. 41(b) for failure to comply with the court's pretrial orders. Hanna

appealed and the court of appeals reversed in an unpublished order. App. at A-41,

A-34.

4.

Under the applicable collective bargaining agreement, a new

worker remained on probationary status until he completed 60 days

of work, which must be done within one year. Hanna worked for

AMC until December 18, 1970, at which time he was laid off as

part of a genera! reduction in work force. At the time of his layoff,

Hanna had worked only 56 days and was therefore still a proba-

tionary employee. By September 16, 1971, AMC had not recalled

Hanna to work and therefore notified him that his employment

was terminated because he had not completed the probationary

period within the one year requirement.

Hanna was inducted into the military on March 10, 1971,

while he was still on layoff status.

After Hanna’s discharge from the armed forces on February

22, 1973, he sought reemployment with AMC. AMC thought

Hanna had no statutory right to reemployment because he had

not completed his 60 days of probationary work as required by

the collective bargaining agreement and therefore had not held a

position “other than a temporary position.” See Veterans’ Act, 38

U.S.C. § 2021(a).? Although AMC told Hanna that he had no

reemployment rights, AMC offered to employ Hanna as a “new

hire.”

Hanna accepted AMC's offer and began working on March

22, 1973. His job was similar to the one he had in 1970 and in-

volved attaching parts to automobiles on an assembly line. His

hourly wage was higher in 1973 than it had been in 1970.

One month later, however, on April 23, 1973, Hanna com-

plained that AMC was violating his Veterans’ Act rights by refus-

ing to treat him as a “returning” employee. When AMC repeated

‘In stage one of the litigation, the court of appeals held that AMC should

have credited Hanna with four days on which he had been absent due to pre-

induction physicals. With the additional four days, Hanna would have completed

his 60 days of probationary employment, would have had seniority measured

from his date of hire, and would have reemployment rights under the Veterans’

Act. The court of appeals ordered Hanna reinstated and remanded for determina-

tion of the backpay award. App. at A-43.

its position that Hanna did not come within the statutory criteria

for reemployment with seniority, Hanna walked out of the plant

with the intention of quitting and was terminated by AMC.

This action was commenced on January 16, 1975, by the

United States Attorney on Hanna's behalf.

C. Opinions Below

AMC argued in both the district court and the court of ap-

peals that Ford Motor Co. v. EEOC should apply to toll AMC’s

backpay liability from the time AMC reemployed Hanna in March

1973, even though AMC’s job offer did not include pre-service

seniority. The district court summarily rejected AMC’s Ford Motor

argument. (App. at A-31.)

On appeal, the Court of Appeals for the Seventh Circuit

likewise summarily rejected AMC’s argument. The court of ap-

peals distinguished Ford Motor Co. v. EEOCbecause it was a Title

VII case, not a Veterans’ Act case, and because to apply Ford Motor

Co. v. EEOC “would not only demean the veteran’s service to his

country, but would also promote unlawful activity ....” (App. at

A-25.)

REASONS FOR GRANTING THE WRIT

I, THE DECISION BELOW CONFLICTS WITH A DECI-

SION OF THIS COURT AND DISREGARDS THIS

COURT’S INSTRUCTION TO SIMPLIFY EMPLOY.

MENT LITIGATION.

This Court’s recent simplification of employment litigation

should not be abrogated by subordinate court decisions. Ford Motor

Co. v. EEOC, 458 U.S. 219 (1982), encourages employers volun-

tarily to hire job discrimination claimants and greatly simplifies

employment litigation by removing the complex mitigation of

damages issue from the case once a job offer is made.

The court of appeals inexplicably restricted Ford Motor

because it was a Title VII case, holding that it has no application

rs

to analogous facts under a different employment rights statute. This

Court should act now before other courts similarly and needlessly

complicate employment litigation.

Ford Motor held that an employer’s backpay liability is tolled

as of the date he unconditionally offers the Title VII claimant the

job he originally sought but was denied. This rule benefits the clai-

mant by getting him to work, benefits the employer by limiting

his backpay liability, and simplifies the adjudication of Title VII

litigation by eliminating the mitigation issue.

Even though the benefits of the Ford Motor rule are unques-

tioned, and even though all the justifications for the rule are ap-

plicable in the instant case, the court of appeals summarily refused

to apply Ford Motor. The court of appeals gave the enigmatic

reasoning that application of Ford Motor to a case arising under

the Veteran’s Act would not only “demean the veteran's service

to his country,” but would also “promote unlawful activity.” (App.

at A-25.)

The Ford Motor rule would no more demean a veteran's ser-

vice than it would insult the race of a Title VII claimant. It would

no more promote unlawful activity under the Veteran’s Act than

it would promote violations of Title VII. The court of appeals does

not distinguish Ford Motor — it rejects it.

Moreover, the course of this litigation proves the need for the

Ford Motor rule. This dispute began in 1973 when Hanna refused

AMC's unconditional job offer because it did not include full

seniority.‘ Four years passed before Hanna received court-ordered

reinstatement, and the mitigation issue was still to be resolved.

Litigating the mitigation issue consumed considerable resources dur-

ing pretrial discovery, trial to the district court, and another full

appeal to the court of appeals, which made its final decision on

January 9, 1984 — nearly eleven years after this dispute began.

‘Initially, the district court upheld AMC's position that respondent had no

recall rights and no reemployment rights under the Veterans’ Act. App. at A-51.

Had the rule adopted in Ford Motor been applied from the

outset of this case, Hanna either would have accepted the job of-

fer in 1973, or would have waived backpay rights thereafter. In

either event, Hanna’s dispute with AMC would then have been

narrowed to his seniority rights — a far simpler problem involv-

ing a question of law. The dispute might have been resolved more

than six years ago, at the first of three court of appeals’ decisions.

Applying Ford Motor beyond mere Title VII context is fur-

ther dictated by the fact that Title VII, the Veteran’s Act, and other

employment rights statutes derive their rules on backpay rights and

mitigation of damages from the same common law source and

should be interpreted harmoniously. When this Court described

the requirement that a claimant mitigate his damages,’ it referenced

not only common law, but also law developed under the National

Labor Relations Act. See 458 US. at 231 n. 15. Further, in another

"The Court recognized that the Title VII claimant had a statutory duty to

mitigate damages. “This duty, routed in an ancient principle of law, requires the

claimant to use reasonable diligence in finding other suitable employment.

Although the unemployed or underemployed claimant need not go into another

line of work, accept a demotion, or take a demeaning position, he forfeits his

right to backpay if he refuses a job substantially equivalent to the one he was

denied. Consequently, an employer charged with unlawful discrimination often

can toll the accrual of backpay liability by unconditionally offering the claimant

the job he sought, and thereby providing him with an opportunity to minimize

damages.

“An employer's unconditional offer of the job originally sought to an

unemployed or underemployed claimant, moreover, need not be supplemented

by an offer of retroactive seniority to be effective, lest a defendant's offer be irra-

tionally disfavored relative to other employers’ offers of substantially similar jobs.

The claimant, after all, plainly would be required to minimize his damages by

accepting another employer's offer even though it failed to grant the benefits of

seniority not yet earned. Of course, if the claimant fulfills the requirement that

he minimize damages by accepting the defendant's unconditional offer. he re-

mains entitled to full compensation if he wins his case. The court may graiii him

backpay accrual prior to the effective date of the offer, retroactive seniority, and

compensation for any losses suffered as a result of his lesser seniority before the

court's judgment.

“In short, the unemployed or underemployed claimant's statutory obliga-

tion to minimize damages requires him to accept an unconditional offer of the

job originally sought, even without retroactive seniority... .” Ford Motor, 458

US. at 231-234 (footnotes omitted).

Title VII case, this court relied on two cases arising under earlier

versions of the Veteran’s Act as authority for granting retroactive

seniority. See Franks v. Bowman Transportation Co., 424 U.S. 747,

778 (1976).°

The court of appeals’ decision threatens the advance begun

in Ford Motor. This Court should act now to reaffirm the need

to simplify employment litigation. If the Court lets this opportuni-

ty slip away, other lower courts will similarly misread Ford Motor

and employment litigation will be needlessly complicated and

prolonged.

Il. THE COURT OF APPEALS’ FAILURE TO CONSIDER

ADEQUATELY FORD MOTOR, AS DEMONSTRATED

BY ITS INCONSISTENT TREATMENT OF TITLE VII

PRECEDENTS, CALLS FOR AN EXERCISE OF THIS

COURT’S SUPERVISORY POWER

It is a first principle of appellate decision making that a court

must give reasoned justifications for the result it reaches. See

Wechsler, Toward Neutral Principles of Constitutional Law, 73

Harv. L. Rev. 1, 15 (1959) (“the main constituent of the judicial

process is precisely that it must be genuinely principled, resting with

respect to every step that is involved in reaching judgment on

analysis and reasons quite transcending the immediate result that

is achieved.”). Indeed, it is this principle which distinguishes our

legal system from one that simply relies on judges’ intuitions. See

P. Brest, Processes of Constitutional Decisionmaking 1089 (1975)

(quoting a hypothetical dialogue in which a judge explains a case's

result as follows: “The justification for this decision rests upon the

fact that I have intuited this result to be the best possible one for

this case.”)

The court below, however, did not adhere to the principle of

reasoned justification when it decided not to follow Ford Motor

Co. v. EEOC. Instead, it just asserted that Ford Motor was a Title

‘In Age Discrimination in Employment Act cases, too, the courts have relied

on race and sex discrimination and unfair labor practice cases as models for deal-

ing with the tolling of backpay periods through job offers. See, e.g.. Dickerson

v. Deluxe Check Printers, Inc., 703 F.2d 276, 281-83 (8th Cir. 1983).

f ~

”Arag

VII case, not a Veterans’ Act case, and that applying Ford Motor

to a Veterans Act case would “demean the veteran's service to his

country” and would “promote unlawful activity.” The court of ap-

peals did not at all consider the reasoning of this Court in Ford

Motor, nor did it explain why that reasoning was not as equally

applicable to a returning veteran as to a Title VII claimant.

The court of appeals’ refusal to apply Ford Motor on the basis

that it was a Title VII case is all the more confusing because the

court of appeals expressly adopted Title VII standards in another

part of its opinion, pointing to “the factual similarity of an employ-

ment discrimination case and a case arising under the Vietnam

Veterans’ Readjustinent Act....” (App. at A-14.)

This Court should grant certiorari in this case to reaffirm ap-

pellate courts’ responsibility tu justify, and not merely announce,

their results.

Ill. THIS COURT SHOULD REQUIRE THE COURT BE.

LOW TO RECONSIDER ITS REFUSAL TO APPLY

FORD MOTOR

If this Court should decline to grant in this forum full argu-

ment and briefing of the conflict between Ford Motor and the opin-

ion below, then it should nevertheless vacate the judgment and

remand the case for further consideration by the court of appeals.

Since this Court can decide only a limited number of cases,

it must rely on the lower courts to consider carefully these cases

and apply them. The cavalier treatment of this Court's ruling in

Ford Motor merits some response. An order vacating and remand-

ing either for determination in accord with Ford Motor or for recon-

sideration of Ford Motor would be an appropriate exercise of this

Court’s supervisory authority.

A common occasion for orders vacating and remanding arises

when this Court has decided a relevant case after the court below

had acted. See R. Stern & E. Gressman, Supreme Court Practice

362-63 (Sth ed. 1978). In such a situation, the lower court takes

a second look at the case, this time with the added guidance of

the intervening Supreme Court ruling.

-10-

The same principle should apply where, as here, the lower court

had a Supreme Court ruling available to it that should have guided

its decision but did not. Given the limited attention the court below

paid to Ford Motor, it was as if this Court had not even spoken

on the backpay tolling issue.

Therefore, if this Court should not select this case for full argu-

ment and briefing, it should nevertheless exercise its supervisory

authority and remand either for determination in accord with Ford

Motor or for reconsideration of Ford Motor.

CONCLUSION

Ford Motor established a rule of law that will simplify and

shorten employment litigation. Complicated and protracted litiga-

tion serves no one’s interest, certainly not the job claimant's.

This Court should grant the writ of certiorari so that the rule

of Ford Motor and its effort to simplify litigation are not ignored

by the lower courts.

Respectfully submitted,

LAURENCE C. HAMMOND. JR.

(Coursel of Record)

FRED G. GROISS

ROBERT L. TITLEY

RALPH A. WEBER

Quarles & Brady

780 North Water Street

Milwaukee WI 53202

(414) 277-5000

Attorneys for Petitioner

American Motors Corporation

Dated: April 8, 1984

APPENDIX

A-l

§ 2022. ENFORCEMENT PROCEDURES

If any employer, who is a private employer or a State or political

subdivision thereof, fails or refuses to comply with the provisions

of section 2021 (a), (b)(1), or (o\(3), or section 2024, the district court

of the United States for any district in which such private employer

maintains a place of business, or in which such State or political

subdivision thereof exercises authority or carries out its functions,

shall have the power, upon the filing of a motion, petition, or other

appropriate pleading by the person entitled to the benefits of such

provisions, specifically to require such employer to comply with

such provisions and to compensate such person for any loss of wages

or benefits suffered by reason of such employer's unlawful action.

Any such compensation shall be in addition to and shall not be

deemed to diminish any of the benefits provided for in such provi-

sions. The court shall order speedy hearing in ary such case and

shall advance it on the calendar. Upon application to the United

States attorney or comparable official! for any district in which such

private employer maintains a place of business, or in which such

State or political subdivision thereof exercises authority or carries

out its functions, by any person claiming to be entitled to the

benefits provided for in such provisions, such United States attorney

or official, if reasonably satisfied that the person so applying is en-

titled to such benefits, shall appea* and act as attorney for such

person in the amicable adjustment of the claim or in the filing of

any motion, petition, or other appropriate pleading and the prose-

cution thereof specifically to require such employer to comply with

such provisions. No fees or court costs shall be taxed against any

person who may apply for such benefits. In any such action only

the employer shall be deemed a necessary party respondent. No

State statute of limitations shall apply to any proceedings under

this chapter.

A-2

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

NOS. 82-2931 & 82-2980

SAMUEL C. HANNA,

Plaintiff-A ppellant,

Cross-A ppellee,

v.

AMERICAN MOTORS CORPORATION,

Defendant-A ppellee,

Cross-A ppellant.

Appeal from the United States District Court for the

Eastern District of Wisconsin

No. 75 C 27 — Terence T. Evans, Judge.

ARGUED JUNE 2, 1983 — DECIDED JANUARY 9, 1984

Before BAUER and COFFEY, Circuit Judges, and

CELEBREZZE, Senior Circuit Judge.*

COFFEY, Circuit Judge. Appellant, cross-appellee, Samuel

Hanna, appeals the judgment of the United States District Court

for the Eastern District of Wisconsin, awarding him lost wages in

the amount of $1,100.74 for the period between December 18,

1970, and February 28, 1971, lost wages in the amount of $8,671.50

*The Honorable Anthony J. Celebrezze, Senior Circuit Judge of the United States

Court of Appeals for the Sixth Circuit. is sitting by designation.

A-3

for the period between April 24, 1973, and November 14, 1977,

and interest in the amount of $408.00. Cross-appellant, American

Motors Corp., appeals the district court’s ruling that Ford Motor

Co. v. EEOC, 458 US. 219 (1982), is inapplicable to this case which

arises under the Vietnam Era Veterans’ Readjustment Assistance

Act of 1974 (prior to 1982 amendment), 38 U.S.C. § 2021 ef seg.

(1976). We reverse the judgment of the district court as to the award

of $8,671.50, and award appellant $28,905.00, plus prejudgment

interest in the amount of $15,347.56, for the period between April

24, 1973, and November 14, 1977. In addition, we award the ap-

pellant prejudgment interest in the amount of $487.97 on the

$1,100.74 in lost wages awarded by the district court for the period

between December 18, 1970, and February 28, 1971.

This court has considered appellant Samuel Hanna’s complaint

against American Motors Corporation (“AMC”) on two prior oc-

casions.' We initially set out the underlying facts in Hanna v.

American Motors Corp., 557 F.2d 118 (7th Cir. 1977\*Hanna I”),

thus, for the purpose of this appeal we will only summarily review

the facts pertinent to this decision.

On September 14, 1970, Hanna commenced work as an

assemblyman at AMC’s Kenosha, Wisconsin plant. Hanna earned

“approximately $3.75 an hour” attaching bolts, bumper guards,

'The case orginiated in January 1975, when the Department of Justice, on

behalf of Hanna, filed suit in the United States District Court for the Eastern

District of Wisconsin, claiming that AMC had violated Hanna’s rights under the

Vietnam Era Veterans’ Readjustment Assistance Act of 1974, 38 U.S.C. § 2021

et seq. (1976). In May 1976, the district court granted AMC's motion for sum-

mary judgment and dismissed the case. In June 1977, this court held that AMC

had, in fact, violated 38 U.S.C. § 2021 et seq. (1976), thus reversing the district

court's judgment and remanding the case. See Hanna v. American Motors Corp.,

$57 F.2d 118 (7th Cir. 1977). In February 1979, the district court dismissed the

case pursuant to Fed. R. Civ. P. 41(b) for failure to prosecute. In January 1981,

this court, in an unpublished order, reversed the district court's dismissal and

remanded the case for determination of damages. In October 1982, Hanna, ac-

ting through private counsel, proceeded to trial on the issue of damages in the

United States District Court for the Eastern District of Wisconsin.

A4

and brake hoses to automobiles as they moved along an assembly

line. On September 17, 1970, and December 3, 4, and 7, 1970, Han-

na absented himself from work in order to undergo a mandatory

military service preinduction physical examination. On all four of

these days work was available for Hanna at the AMC plant in

Kenosha. On December 18, 1970, AMC reduced its labor force

and “laid off” Hanna, who up until that date had worked fifty-six

days. Pursuant to the collective bargaining agreement between

AMC and the United Auto Workers Union (“UAW”), of which

Hanna was a member, if Hanna had worked sixty days, he would

have completed his probationary period and would have been

awarded seniority from September 14, 1970. the date of his original

hiring. In addition, if Hanna had attained seniority status on or

before December 18, 1970, he would not have been “laid off” un-

til February 28, 1971.

On March 10, 1971, Hanna was inducted into the Armed

Forces and while in military service he received a letter from AMC

Stating | hat because he had failed to complete his sixty-day proba-

tionary period within one year, as provided for in the VAW-AMC

collective bargaining agreement, his employment at AMC had been

terminated. Following almost two years of military service, includ-

ing a nine-month stay in Vietnam, Hanna received an honorabie

discharge from the Armed Forces on February 22, 1973.

Upon returning to Kenosha, Wisconsin, Hanna contacted

AMC about being reinstated to his previous job but was told by

company officials that he had no reemployment rights. On March

22, 1973, AMC agreed to employ Hanna as a “new hire” perfor-

ming “similar work” on the assembly line. On April 23, 1973, Hanna

complained to AMC officials that they were violating his veteran's

reemployment rights by refusing to accord him seniority from the

date of his original hiring on September i4, 1970. Due to AMC’s

refusal to grant seniority, Hanna left AMC the following day and

was terminated by the company.

Hanna sought the assistance of his union, contacting UAW

board members in an attempt to obtain reinstatement with seniority

A-5

at AMC, but his efforts “didn’t develop into anything.” ? Hanna

next contacted the Department of Labor who, in turn, transferred

the matter to the Department of Justice, who filed suit, on behalf

of Hanna, against AMC claiming that the company had violated

Hanna's rights under the Vietnam Era Veterans’ Readjustment

Assistance Act of 1974 (prior to 1982 amendment), 38 U.S.C. §

2021 et seq. (1976) (“Vietnam Veterans’ Readjustment Act”). The

district court granted AMC’s motion for summary judgment and

dismissed the case. The Government appealed and this court ruled

that:

“But for the pre-induction physicals, plaintiff would

have collected his salary until February 28, 1971, and

would have been reinstated upon return from active duty

with a September 14, 1970, date with all attendant rights

under the collective bargaining agreement. Thus under

the Act plaintiff is entitled to reinstatement with a

September 14, 1970, seniority date and to collect lost

wages from December 18, 1970, until at least February

28, 1971, his proper lay off date.? 38 U.S.C. § 2022,

United States ex rel. Adams v. General Motors Corp.,

[525 F.2d 161 (6th Cir. 1975). Plaintiff did not waive

his rights under the Act by his April 24, 1973, refusal

to continue in the inferior status accorded him by the

defendant. O'Mara v. Petersen Sand & Gravel Co., 498

F.2d 896 (7th Cir. 1974).

Accordingly the district court’s judgment is reversed

and remanded for further proceedings consistent

herewith.

?He will also be entitled to recover lost wages from

April 24, 1973, when he left defendant’s employ, to date

unless on remand defendant can show that plaintiff aban-

doned his willingness to continue in its employ under

the conditions mandated by the Act when he enrolled

?The record fails to indicate what action, if any, was taken by UAW board

members after they were contacted by Hanna.

A6

in the University of Wisconsin-Parkside in September,

1973 as a student seeking a degree. See Taylor v. Safeway

Stores, Inc., 524 F.2d 263, 267-268 (lth Cir. 1975).”

Hanna I, 557 F.2d at 122.

At the subsequent trial for damages, which is the subject of

this appeal, the evidence revealed that following his termination

date of April 24, 1973, Hanna visited the Kenosha Job Service of-

fice four times a month between June and September of 1973. A

Job Service representative gave Hanna “five to ten” referrals which

“didn’t pan out to anything.” On September 4, 1973, Hanna enrolled

as a full-time. day student at the University of Wisconsin-Parkside

(“UW-Parkside”) in Kenosha, Wisconsin and thus began receiv-

ing veterans benefits under the “G.I. bill.” UW-Parkside is “main-

ly a commuter school,” that is attended in significant part (31%)

by students over thirty years of age, “a number of” whom are

employed full time. During the fall semester of 1973, Hanna filed

“five to ten” applications with various employers and continued

to visit the Kenosha Job Service office.

Between January 1974 and the “summer” of 1974, Hanna did

not attend school but continued to follow up on referrals from the

Kenosha Job Service office, though “nothing panned out.” In the

“summer” of 1974, through a friend’s suggestion, Hanna landed

a seasonal job as a general laborer, cutting grass and painting fences,

for the Wisconsin Natural Gas Company in Racine, Wisconsin.

Hanna continued at this job ior “about a month,” earning $598.00,

and then quit because he “felt that as a Vietnam veteran [he] should

be doing something more. . . .” Hanna testified that in September

of 1974, he returned to UW-Parkside as a full-time day student

because he “didn't have a job. . . and it was a means of getting

some money and income and plus learning something.” Between

September 1974 and June 1975, Hanna filed applications at two

factories in Waukegan, Illinois and one in Kenosha, Wisconsin.

During this period Hanna also continued to visit the Kenosha Job

Service office, and remained “ready, willing, and available to work

at American Motors Corporation,” or at any factory with com-

A-7

parable employment opportunities.’ Even though Hanna did not

file any application with “private employment services” during this

period, he did continue to read the want-ads of the Kenosha News

and drive his automobile to various factories in order to personal-

ly file job applications.

Hanna was unable to find employment during the “summer”

of 1975, and in September he again enrolled in UW-Parkside as

a full-time, day student. The testimony revealed that during the

fall semester of 1975, Hanna “continued to seek full-time employ-

ment,” but was unsuccessful in his efforts. Between February 1976

and January 1977, Hanna, while still attending school, filed addi-

tional employment applications at factories located in Waukegan,

Illinois, Zion, Illinois, and Kenosha, Wisconsin but was offered no

job. Hanna left school after the fall semester of 1976. In June 1977,

after having had an application on file with the Kenosha Job Ser-

vice for over four years, he obtained his first employment through

the Job Service office in the “CETA” program, building campsites

for the Kenosha City Parks Commission. Hanna worked at this

job for “about two months” earning $1,312.00, and terminated his

employment when the Government informed him of this court's

decision in Hanna I. Following the decision in Hanna / on June

23, 1977, the district court issued two reinstatement orders before

AMC complied and reinstated Hanna as an assemblyman, earn-

ing $4.25 an hour, on November 14, 1977. Hanna continued at

this job for seven months until he was again discharged by AMC.

At the trial for damages, Kenneth Neill, supervisor of the

Kenosha Job Service program, testified that his agency “counsel-

ed with a number of veterans” between April 24, 1973, and

November 14, 1977, because the agency was “mandated hy law

to serve and provide priority [to] veterans,” in order to help them

readjust to society and overcome any effects of the then referred

to “Vietnain Vet Syndrome.” Neill further testified that there were

The evidence revealed that at some time between April 24, 1973, and

November 14, 1977, Hanna worked for a single day at Morelli's Overseas Ex-

port Company, but left because the “loading and unloading of hundred pound

boxes” was “much too difficult.”

A:8

five other “transportation equipment” plants in the area surroun-

ding Kenosha but that AMC generally paid twenty to twenty-five

percent more than the other employers. Neill concluded that there

was “a high probability that a person [of general factory worker

skills] would not be able to find a job comparable,” to that of an

AMC employee and that the closest comparable employer was the

General Motors Corporation, some seventy miles away in Janesville,

Wisconsin. In addition, the unemployment rate in Kenosha County

ranged from 3.5 percent in 1973 to 8.5 percent in 1977, and the

unemployment rate for a minority, such as Hanna, was “usually

double” that of non-minorities. On cross-examination Neill initial-

ly stated that between April 24, 1973, and November 14, 1977,

an individual with skills commensurate with Hanna’s “could secure

employment . . . within a twenty-seven mile commuting area” of

Kenosha. Neill then qualified that statement on redirect examina-

tion and admitted that the probability of finding “comparable”

employment was “substantially lower” and, in fact, within the same

twenty-seven mile radius, there was “no comparable employment

to American Motors when all factors [were] concerned |sic].” (em-

phasis added). Based upon this testimony, the trial judge ruled, in

pertinent part:

“J further find that the plaintiff did not abandon

his willingness to return to work by becoming a student

at UW-Parkside in September of 1973. I believe his deci-

sion to return to school can more accurately be

characterized as pursuing an alternative that was better

than anything else Mr. Hanna had going for him at the

moment. Had he been offered a job at AMC with the

correct seniority date, I find that he would have either

quit school and returned to the job or would have restruc-

tured his school courses so that he could return to full

time employment while still remaining a student.

I do find, however, that Mr. Hanna's full time

schooling interfered with his duty to mitigate his

damages. Although he did secure some employment, it

was of a seasonal nature, consistent with the kind of job

that college students secure while continuing their

educations.

A-9

Furthermore, I find that work of a somewhat com-

parable nature to the unskilled labor performed by Mr.

Hanna at AMC was available in the Kenosha area in

which Mr. Hanna lived during the period in question.

Although it might have been difficult to find an unskill-

ed laborer’s job that paid as handsomely as did the one

at AMC, Mr. Hanna nevertheless should have more

diligently pursued work that was available, Thus, I find

that to a significant extent, AMC has demonstrated that

Mr. Hanna has failed to properly mitigate his damages.

I find no failure of a duty to mitigate between

December 18, 1970 and February 28, 1971. Thus, dur-

ing that period, I find that $1,100.74 is an appropriate

amount to be awarded to the plaintiff. As to the remain-

ing claim for $28,905.00, / find that a reduction should

be made for failure to mitigate, the most important ele-

ment of which was the plaintiffs enrollment for almost

three years as a full time college student. Although, as

I have said, I do not view his act as a waiver of his right

to seek reinstatement at AMC, | believe it significantly

cooled his ardor for job hunting. | believe a 70% reduc-

tion for failure to mitigate on this point is appropriate,

and thus I award the plaintiff $8,671.50 for post-April

1973 damages. On the December 18, 1970 to February

28, 1971 award of $1,100.74, I believe a further award

of post-judgment interest from June 23, 1977 (the date

of the decision in Hanna I) to date is appropriate. Because

of the closeness of the liability question and the good

faith of AMC in reasonably construing its collective

bargaining agreement with the UAW (in other words,

I do not in any way view this case as one where AMC

blatantly disregarded the rights of a veteran), I will not

award interest on the damages found to be due for the

period of time that followed April 24, 1973.” (emphasis

added).

On appeal, Hanna contends that:

A-10

A. The district court exceeded the directive of this court in Han-

na I.

B. The district court erred in finding that Hanna failed to mitigate

damages.

C. The district court erred in not awarding Hanna prejudgment

interest.

On cross-appeal, AMC contends that:

D. The United States Supreme Court’s decision in Ford Motor

Co. v. EEOC, 458 U.S. 219 (1982), precludes Hanna from

recovering lost wages for the period between April 24, 1973,

and November 14, 1977.

We shall consider these issues individually.

Il

A. HANNA I

The appellant intially contends that this court’s language in

footnote 2 of Hanna / required the district court, on remand, to

compensate Hanna with full lost wages from April 24, 1973, to

November 14, 1977, if AMC failed to show that Hanna “aban-

doned his willingness” to continue in AMC's employ when he enroll-

ed in UW-Parkside. In footnote 2 of Hanna | this court stated:

“(Hanna is] entitled to recover lost wages from April 24,

1973, when he left [AMC's] employ, to date unless on

remand [AMC] can show that [Hanna] abandoned his

willingness to continue in its employ under the condi-

tions mandated by the [Veterans’ Reemployment Rights]

Act when he enrolled in the Universi:y of Wisconsin-

Parkside in September 1973 as a student seeking a

degree.”

557 F.2d at 122 no. 2. The appellant reasons that he should have

been fully compensated for the wages lost during this period because

the district court explicitly found that Hanna “did not abandon

his willingness to return to work by becoming a student at UW-

Parkside in September of 1973.”

A-11

In construing this court’s language in footnote 2 of Hanna

J, it is important to note that we used the words “entitled to recover

lost wages” based upon our interpretation of 38 U.S.C. § 2022

(1976), which provides:

“If any employer, who is a private employer or a

State or political subdivision thereof, fails or refuses to

comply with the provisions of section 2021 (a), (b)(1), or

(b\3), or section 2024, the district court of the United

States for any district in which such private employer

maintains a place of business, or in which such State or

political subdivision thereof exercises authority or car-

ries out its functions, shall have the power, upon the the

filing of a motion, petition, or other appropriate pleading

by the person entitled to the benefits of such provisions,

specifically to require such employer to comply with such

provisions and to compensate such person for any loss

of wages or benefits suffered by reason of such

employer's unlawful action. Any such compensation

shall be in addition to and shall not be deemed to

diminish any of the benefits provided for in such provi-

sions. . . . ” (emphasis added).

In Hanna / this court determined that AMC had failed to comply

with 38 U.S.C. § 2021 (1976), and that pursuant to 38 U.S.C. §

2022 (1976), unless the trial court found that Hanna had aban-

doned his willingness to return to AMC’s employ, Hanna was en-

lutled to wages he lost as a result of AMC’s non-compliance.

Title 38 U.S.C. § 2022 (1976) also provides, however, that the

district court “shall have the power” to compensate an entitled

emplovee with lost wages. Contrary to the appellant’s position, the

Statute does not mandate the district court to compensate an en-

titled employee, rather it only affords the district court the power

to do so. In Levine v. Berman, 178 F.2d 440 (7th Cir. 1949)

(“Levine”), this court interpreted section 8 of the Selective Train-

ing and Service Act of 1940, 50 U.S.C. App. § 308 (1946), the

A-12

predecessor to 38 U.S.C. § 2021 ef seq.,* which provided in perti-

nent part:

“In case any private employer fails or refuses to comply

with the provisions of subsection (b) . . . the district court

of the United States . . . shall have power, upon the fil-

ing of a motion, petition, or other appropriate pleading

by the person entitled to the benefits of such provisions,

to specifically require such employer to comply with such

provisions, and, as an incident thereto, to compensate

such person for any loss of wages or benefits suffered

by reason of such employer's unlawful action.” (emphasis

added).

178 F.2d at 444. We held in Levine that the phrase “sh ii) ave

power,” in the context of a veterans’ reemployment statute, affords

the district court discretion to compensate an entitled employee.

Id. at 445. Accord O'Mara v. Petersen Sand & Gravel Co., 498

F.2d 896, 898 (7th Cir. 1974). In this instance, the district court

awarded Hanna lost wages but reduced the award based upon its

finding that Hanna failed to mitigate damages. The district court's

actions were within its discretionary power to award damages under

38 U.S.C. § 2022 (1976). See id. We next consider whether the

‘As this court stated in Hanna F

“The original statute establishing veterans’ reemployment rights

was the Selective Training and Service Act of 1940, 54 Stat. 885.

The name of the Act was changed in 1948 to the Selective Service

Act of 1948, 62 Stat. 604, and again in 1951 to Universal Military

Training and Service Act, 65 Stat. 75. In 1967 the Act was renain-

ed the Military Selective Service Act of 1967, 81 Stat. 100, and in

1971 the name was changed to Military Selective Service Act, 85

Stat. 348, and found at 50 U.S.C. App. § 459. The reemployment

provisions of the Military Selective Service Act were codified if 1974

with nonsubstantive wording changes in the Vietnam Veterans’

Readjustment Act of 1974, 88 Stat. 1578, 38 U.S.C. § 2021 er seg.

The reemployment provision of the various Acts are substantially

identical. Thus the judicial precedents developed under them are

largely interchangeable.”

557 F.2d at 119 n.1.

A-13

district court abused its discretionary power by finding that Han-

na failed to mitigate damages.

B. FAILURE TO MITIGATE

The appellant contends that AMC failed to meet its burden

of proof on the affirmative defense of mitigation, and thus, the

district court erred in finding that “to a significant extent, AMC

has demonstrated that Mr. Hanna has failed to properly mitigate

his damages.” To support this contention, the appellant notes that

AMC, without calling any of its own witnesses at the trial for

damages, simply introduced Hanna's UW-Parkside student

transcript and cross-examined Hanna's witnesses in an attempt to

prove that Hanna failed to mitigate damages.

This court has, in the past, recognized the duty of an employee,

who returns from military service and is wrongfully denied employ-

ment by his previous employer, to mitigate damages. In Levine we

interpreted section 8 of the Selective Training and Service Act of

1940, 50 U.S.C. App. § 308 (1946), the predecessor to 38 U.S.C.

§ 2021 et seq.,’ and stated, “[uJnder the general rule of damages,

where one is injured or damaged by the wrongful act of another,

he is bound to exercise reasonable care and diligence in mitigating

the resulting damage. . . .” 178 F.2d at 444 (citing Van Doren v.

Van Doren Laundry Service, 68 F. Supp. 938, 941 (D.C.NJ. 1946).

See also O'Mara v. Petersen Sand & Gravel Co., 498 F.2d at 897-98;

Helton v. Mercury Freight Lines, Inc., 444 F.2d 365, 368 (Sth Cir.

1971); Loeb v. Kivo, 169 F.2d 346, 350 (2nd Cir. 1948). More

recently, in Peel v. Florida Department of Transportation, 500 F.

Supp. 526 (N.D. Fla. 1980), the United States District Court for

the Northern District of Florida applied this “mitigation of damages”

principle standard to the Vietnam Veterans’ Readjustment Act.

See also Chaltry v. Ollie’s Idea, Inc., 546 F. Supp. 44, 52 (W.D.

Mich. 1982).

We further note that in the area of employment discrimina-

tion, when employees seek lost wages for the period of discrimina-

tion, this court requires the employee to initially establish the

’See footnote 4.

A-14

amount of damages. The burden then shifts to the employer to

prove, as an affirmative defense, that the employee failed to mitigate

those damages. As we stated in Sprogis v. United Airlines, Inc.,

517 F.2d 387 (7th Cir. 1975) (“Sprogis”), “once the plaintiff has

proven [his] case and established what [he] contends to be [his]

damages, the burden of going forward to mitigate the liability, or,

to rebut the damage claim, rests with the defendant.” 517 F.2d

at 392. In order to satisfy its burden of proof, the employer must

show that:

“(1) the plaintiff failed to exercise reasonable diligence

to mitigate his damages, and

(2) there was a reasonable likelihood that the plaintiff

might have found comparable work by exercising reason-

able diligence.” (emphasis added).

Syvock v. Milwaukee Boiler Mfg. Co., 665 F.2d 149, 159 (7th Cir.

1981). See also Jackson v. Shell Oil Corp., 702 F.2d 197, 202 (9th

Cir. 1983); EEOC v. Sandia Corp., 639 F.2d 600, 627 (10th Cir.

1980); Sias v. City Demonstration Agency, 588 F.2d 692, 696 (9th

Cir. 1978); Ballard v. El Dorado Tire Co., 512 F.2d 901, 906 (Sth

Cir. 1975); NLRB v. Nickey Chevrolet Sales, Inc., 493 F.2d 103,

107-08 (7th Cir.), cert. denied, 419 U.S. 834 (1974). Due to the

factual similarity of an employment discrimination case and a case

arising under the Vietnam Veterans’ Readjustment Act, we apply

the two-pronged mitigation test in this instance.‘ See, e.g., Peel v.

Florida Department of Transportation, 500 F. Supp. at 528.

According to the first prong of the test, once Hanna established

the amount of his damages, AMC was required to raise mitigation

as an affirmative defense and demonstrate that Hanna failed to

exercise “reasonable diligence” in obtaining comparable employ-

*In an employment discrimination case the employee seeks damages, in the

form of lost wages, for the period of discrimination, and the employer attempts

to show that the employee failed to mitigate chose damages. An analogous situa-

tion is present in this instance, Hanna seeks damages, in the form of lost wages,

for the period he was denied employment with seniority, and AMC attempts to

show that Hanna failec to mitigate those damages.

A-15

ment between April 24, 1973, and November 14, 1977. This court

stated in Sprogis that reasonable diligence in seeking comparable

employment includes “check[ing] want ads, register[ing] with

employment agencies, and discuss[ing] employment opportunities

with friends and acquaintances.” 517 F.2d at 392. Furthermore,

“liJn Sprogis we held that an employment discrimination plaintiffs

formal application for one job and her procurement of another,

temporary, position during a two-year period constituted ‘reasonable

diligence’ in attempting to find alternative employment. . . .” Orzel

v. City of Wauwatosa Fire Dept., 697 F.2d 743, 756 (7th Cir.),

cert. denied, 52 U.S.L.W. 3422 (U.S. Nov. 28, 1983) (No. 83-205)

(“ Orzel”). Similarly, in Orze/ we held that an assistant chief of the

Wauwatosa Fire Department, who, during a two-year period,

worked as a temporary census taker, applied for a job with the

United States Postal Service but was not hired, and placed his name

on file with the Wisconsin Job Service, did not fail to mitigate

damages. Orzel, 697 F.2d at 756-57.

In this instance, AMC failed to introduce a scintilla of evidence

to contradict or discredit Hanna’s testimony that he had placed

applications on file with various employees [sic], registered with

the employment office, discussed employment opportunities with

others, checked the want-ads, or secured temporary employment,

between April 24, 1973, and November 14, 1977. Instead, AMC

introduced Hanna’s UW-Parkside student transcript into evidence

and relied upon the rationale of Taylor v. Safeway Stores, Inc.,

524 F.2d 263, 268 (10th Cir. 1975) (* Taylor”), to claim that Han-

na’s enrollment as a full-time, day student at UW-Parkside con-

stituted a failure to mitigate damages. In Tay/orthe United States

Court of Appeals for the Tenth Circuit held that the district court

had not abused its discretion to award damages, under 42 U.S.C.

§ 2000e-5(g), by not including the time of an employee's school

attendance in the damage computation. The court reasoned that,

“(w]hen an employee opts to attend school, curtailing present ear-

ning capacity in order to reap greater fitture earnings, a back pay

award for the period while attending school also would be like

receiving a double benefit.” 524 F.2d at 268.

The record reveals that Hanna, who enrolled in a total of sixty-

six credit hours at UW-Parkside but earned only sixteen credit

A-16

hours, offered uncontradicted testimony that he obtained no

employment from the skills he learned at UW-Parkside and the

only reason he enrolled in school was because he “didn’t have a

job .. . and it was a means of getting some money and income

[from veterans’ benefits] and plus learning something.” Additionally,

the parties stipulated to the amount of veterans’ benefits Hanna

received under the “G.I. bill” while attending school, and subtracted

that amount, along with the money Hanna earned from the Wiscon-

sin Natural Gas Company and the Kenosha County Parks Com-

mission, from the total amount of lost wages due for the period

between April 24, 1973, and November 14, 1977.’ Accordingly,

Hanna will receive no double benefit for the period he attended

UW-Parkside because of the court approved stipulation that sub-

tracted all the veterans’ benefits he received ($7,016.00), while in

school, from the damage claim. Furthermore, the district court

found that:

“[Hanna] did not abandon his willingness to return

to work by becoming a student at UW-Parkside in

September of 1973... . [H]is decision to return to school

[was] more accurately . . . characterized as .. . an alter-

native that was better than anything else Mr. Hanna

had going for him at the moment.”

The court added that:

“Had [Hanna] been offered a job at AMC with the

correct seniority date, I find that he would have either

quit school and returned to the job or would have restruc-

tured his school courses so that he could return to full

time employment while still remaining a student.”

The evidence presented at the trial for damages revealed that

Hanna entered school not to “reap greater future earnings” but

"AMC and Hanna stipulated that Hanna received $7,016.00 in veterans’

benefits under the “G.I. bill” between April 24, 1973 and November 14, 1977.

In addition, Hanna earned $598.00 while employed by the Wisconsin Natural

Gas Company and $1,312.00 while employed by the Kenosha County Parks

Commission.

A-17

because he “didn’t have a job. . . and it was a means of getting

some money and income” from veterans’ benefits. Thus, we agree

with the district court that Hanna enrolled in school only because

that “alternative ... was better than any thing else [he] had going

for him at the moment.” Hanna’s uncontradicted testimony, that

while attending UW-Parkside he applied for and was at all times

ready, willing, and available to accept employment comparable to

that of AMC, and the district court’s finding that Hanna “did not

abandon his willingness to return to work by becoming a student

at UW-Parkside,” reveal that Hanna had not “curtailled] his pre-

sent earning capacity.” Accordingly, the rationale of Taylor, that

an award of lost wages for the period in which one attends school,

and thereby curtails his present earning capacity in order to reap

greater future earnings, constitutes a double benefit, certainly does

not apply to the facts in this instance. See, e.g., Washington v.

Kroger Co., 671 F.2d 1072, 1079 (8th Cir. 1982). In light of the

fact that Hanna’s testimony remained uncontradicted, the record

is void of any other proof on AMC’s behalf that Hanna “failed

to exercise reasonable diligence in mitigating his damages.”

Consequently, the district court's findings of fact that Hanna

“should have more diligently pursued work that was available” and

that Hanna’s enrolling at UW-Parkside “significantly cooled his

ardor for job hunting” find no support in the record. In addition,

these unsupported findings directly conflict with the district court’s

finding that:

“Had [Hanna] been offered a job at AMC with the

correct seniority date, I find that he would have either

quit school and returned to the job or would have restruc-

tured his school courses so that he could return to full!

time employment while still remaining a student.”

AMC offered no evidence to contradict the testimony of Hanna

or Kenneth Neill, supervisor of Kenosha Job Service, and the district

court found neither witnesses’ testimony incredible. Moreover, we

are unable to find any evidence in the record to contradict the

testimony of Hanna or Neill, or to contradict our acceptance of

their testimony as a verity. See, e.g., Royal Business Machines v.

Lorraine Corp., 633 F.2d 34, 47 (7th Cir. 1980); Apolskis v. Con-

cord Life Insurance Co., 445 F.2d 31, 34 (7th Cir. 1971).

A-18

At the trial for damages, Hanna established that he visited

the Kenosha Job Service office, personally placed applications on

file at factories in Waukegan, Illinois, Racine, Wisconsin, and

Kenosha, Wisconsin, read the want-ads of the Kenosha News,

discussed employment opportunities with friends, and worked at

least two jobs between April 24, 1973, and November 14, 1977.

These actions are more than sufficient to constitute “reasonable

diligence” on the part of Hanna. Accord Orzel, 697 F.2d at 756-57;

Sprogis, 517 F.2d at 392-93. In light of AMC’s failure to introduce

evidence to the contrary and in view of present case law, we hold

that the district court’s findings of fact that Hanna “should have

more diligently pursued work that was available” and that Han-

na’s enrolling in UW-Parkside “significantly cooled his ardor for

job hunting” are clearly erroneous.’

In addition, AMC utterly failed to establish that “there was a

reasonable likelihood [Hanna] might have found comparable work”

between April 24, 1973, and November 14, 1977. The only evidence

in the record on this point consists of Neill’s testimony that though

work was available for an unskilled laborer within a twenty-seven

mile commuting area of Kenosha, there was “no comparable

employment to American Motors when all factors [were] concerned

[sic].” (emphasis added). AMC offered no evidence to rebut this

testimony or to show that jobs existed which were comparable in

“pay, Status, and other factors to the position” at AMC.

Marshall v. Arlene Knitwear, Inc., 454 F. Supp. 715, 730 (E.D.N.Y.

1978). See also Ballard v. Eldorado Tire Co., 512 F.2d at 906. The

fact that Hanna left two jobs which were not comparable to AMC

‘In reviewing the district court's finding of fact we are bound by the finding

unless it is clearly erroneous. Fed. R. Civ. P. 52(a). Thus, unless we are left with

a “definite and firm conviction that a mistake has been committed,” United Siates

v. United States Gypsum Co., 333 U.S. 364, 395 (1948), we must accept the trial

court's findings. See /nwood Laboratories v. ves Laboratories, 456 U S. 844, 855

(1982). In this instance, AMC's failure to introduce any evidence, other than Han-

na’s UW-Parkside student transcript, on the issue of Hanna's “reasonable

diligence,” leaves us with a “definite and firm conviction” that the trial court

erred in finding that Hanna “should have more diligently pursued work that was

available” and that Hanna's enrolling in UW-Parkside. “significantly cooled his

ardor for job hunting.”

A-19

is of no consequence. A veteran who has been denied reemploy

ment in violation of the Vietnam Veterans’ Readjustmerit Act, has

no duty, under the principles of mitigation, to continue at a job

which is not comparable to his previous position. As we stated in

O'Mara v. Petersen Sand & Gravel Co., 498 F.2d at 897-98, a case

arising under the Military Service Act of 1971, 50 U.S.C. App.

§ 451 et seq. (Supp. I 1971), the predecessor to 38 U.S.C. § 2201,

et seq.,’ “(the plaintiff] did not improperly fail to mitigage damages

by quitting . . . as a laborer, a position inferior to the position as

scalemaster.” See also Hanna I, 557 F.2d at 122 (Hanna did not

waive his rights under the Act by his April 24, 1973, refusal to

continue in the inferior status afforded him by the defendant). Thus,

the district court’s finding of fact that “work of a somewhat com

parable nature to the unskilled labor performed by Mr. Hanna at

AMC was available in the Kenosha area in which Mr. Hanna lived

during the period in question,” is not supported by the record and,

therefore, is clearly erroneous.

In light of Hanna’s repeated and continuous efforts to secure

employment,” and the absence of any proof by AMC concerning

Hanna’s lack of reasonable diligence or the availability of com-

parable employment, we conclude that AMC failed to meet its

burden of proof on the issue of mitigation. See, e.g., NLRB v.

Nickey Chevrolet Sales, Inc., 493 F.2d at 108. Accordingly, we

hold the district court’s findings of fact that:

“[wjork of a somewhat comparable nature to the

unskilled labor performed by Mr. Hanna at AMC was

*See footnote 4.

“According to the United States Court of Appeals for the Tenth Circuit in

EEOC v. Sandia Corp., 639 F.2d 600 (10th Cir. 1980)

“Ja] claumant 1s required to make only reasonable exertions to mitigate

damages, and is not held to the highest standard of diligence. It does

not compe! him to be successful in mitigation. It requires only an

honest good faith effort.” 639 F.2d at 627 iquoting United States

v. Lee Way Motor Freight. inc. 625 F.24 918, 938 (Oth Cir. 1979).

A-20

available in the Kenosha area in which Mr. Hanna liv-

ed during the period in question[;]... Mr. Hanna. .

. Should have more diligently pursued work that was

available[;] ... AMC has demonstrated that Mr. Han-

na has failed to properly mitigate his damages [; and]

[Hanna's] enrollment for almost three years as a full time

college student . . . significantly cooled his ardor for job

hunting|,]”

are not supported by the record and thus are clearly erroneous.

Based upon the evidence presented at the trial for damages, AMC

did not demonstrate that Hanna failed to mitigate his damages.

The district court's decision, therefore, to reduce the amount of

lost wages awarded Hanna for the period between April 24, 1973,

and November 14, 1977, due to Hanna’s apparent failure to mitigate

damages, rises to an abuse of discretion. Accordingly, we hold that

the appellant is to receive compensation for his wages lost during

the period between April 24, 1973, and November 14, 1977, less

the stipulated amount received as veterans’ benefits under the “G.I.

bill” and the stipulated amounts earned from employment with the

Wisconsin Natural Gas Co. and the Kenosha County Parks Com-

mission. In sum, Hanna is to receive $28,905.00 rather than the

$8,671.50 awarded by the district court, for the period of his

wrongful discharge from April 24, 1973, until November 14, 1977."

C. PREJUDGMENT INTEREST

The appellant next contends that he is entitled to the interest

which accured before June 23, 1977, the date of this court's deci-

sion in Hanna I, on the damages awarded by the district court for

the period between December 18, 1970, and February 28, 1971,

and to the interest which accrued before October 27, 1982, the

"Appellant is entitled to $37,831.00 in lost wages, less $8,926.00 for money

received as veterans’ benefits under the “G.1. bill” and money earned from his

employment with the Wisconsin Natural Gas Company and the Kenosha Coun-

ty Parks System.

A-2]

date of the district court’s decision, on the damages awarded for

the period between April 24, 1973, and November 14, 1977. Ap-

pellant initially refers to the district court’s ruling which provided,

in pertinent part:

“On the December 18, 1970 to February 28, 1971

award of $1,100.74, I believe a further award of post-

judgment interest from June 23, 1977 (the date of the

decision in Hanna J to date is appropriate. Because of

the closeness of the liability question and the good faith

of AMC in reasonably construing its collective bargain-

ing agreement with the UAW (in other words, I do not

in any way view this case as one where AMC blatantly

disregarded the rights of a veteran), I will not award in-

terest on the damages found to be due for the period

of time that followed April 24, 1973.”

Appellant asserts that “good faith is not a defense to prejudgment

interest,” in a case arising under the Vietnam Veterans’ Readjust-

ment Act, see Hembree v. Georgia Power Co., 637 F.2d 423, 429-30

(Sth Cir. 1981), thus, in this instance, the trial judge erred by refusing

to grant Hanna prejudgment interest on the damage award.

Though the award of prejudgment interest in an action under

the Vietnam Veterans’ Readjustment Act lies within the trial judge's

discretion, Hembree v. Georgia Power Co., 637 F.2d at 429; Cher-

noff v. Pandick Press, Inc., 440 F. Supp. 822, 827 (S.D.N.Y. 1977),

we note the United States Supreme Court's language in Fishgold

v. Sullivan, 328 U.S. 275 (1946) that:

“The Act was designed to protect the veteran in several

ways. He who was called to the colors was not to be

penalized on his return by reason of his absence from

his civilian job. He was, moreover, to gain by his ser-

vice for his country an advantage which the law withheld

from those who stayed behind.

A-22

This legislation is to be liberally construed for the benefit

of those who left private life to serve their country in

its hour of great need... . ”

328 U.S. at 284-85. See also Coffy v. Republic Steel Corp., 447

U.S. 191, 196 (1980); Alabama Power Co. v. Davis, 431 U.S. 581,

584-85 (1977); Dyer v. Hinky Dinky, Inc., 710 F.2d 1348, 1350

(8th Cir. 1983); Hanna J, 557 F.2d at 119-20. The purpose of the

Vietnam Veterans’ Readjustment Act “is that the veteran should

be made whole, and reimbursed for the measurable wage disad-

vantage or loss suffered through his incorrect reinstatement.” (em-

phasis added). Helton v. Mercury Freight Lines, Inc., 444 F.2d at

367. Finally,

“[iJnterest is a proper ingredient of the instant ‘make

whole’ remedy and should be granted. Prejudgment in-

terest is viewed as effectuating the purposes of the Act,

particularly that of encouraging reemployment of

veterans .. . at the earliest opportunity.”

Peel v. Florida Department of Transportation, 500 F. Supp. at 528

(and cases cited therein).

In accord with the policy of the Vietnam Veterans’ Readjust-

ment Act that “one called to the colors [is] not to be penalized upon

his return by reason of his absence from his civilian job,” Fishgold

v. Sullivan, 328 U.S. at 284, the trial judge’s discretion in award-

ing prejudgment interest must be guided by the principle of “mak-

ing whole” the returning veteran. Thus, the employer's denial of

employment to a returning veteran, based upon an apparent “good

faith” reliance on the Union bargaining agreement, is of no conse-

quence in a case arising under the Vietnam Veterans’ Readjust-

ment Act. For as the United States Supreme Court stated in

Fishgold, “no practice of employers or agreements between

employers and unions can cut down the service adjustment benefits

which Congress has secured the veteran under the Act.” (emphasis

added). 328 U.S. at 285. Furthermore, as this court stated in Han-

na I, with regard to Hanna's original “lay off”, “[iJt is irrelevant

that [AMC] may have laid [Hanna] off in good faith.” 557 F.2d

at 122.

A23

Applying that rationale to the facts of this instance, the district

court's reliance upon “the good faith of AMC” in order to deny

Hanna prejudgment interest, and thus prevent him from being

“made whole,” was improper. See Hembree v. Georgia Power Co.,

637 F.2d at 429-30; Coffy v. Republic Steel Corp., 91 Lab. Cas.

q 12,843 (N.D. Ohio 1981) (on remand from the United States

Supreme Court). In addition, the district court's reliance upon the

“closeness of the liability question” in order to deny Hanna pre-

judgment interest was also improper, in light of our holding that

the liability question is well-settled and AMC owes Hanna full wages

lost for the period between April 14, 1973, and November 24, 1977.

Thus, in furtherance of our duty to liberally construe the Act for

those “called to the colors” we hold that the district court's denial

of prejudgment interest, based upon AMC’s apparent “good faith”

and “closeness of the liability question” without any apparent regard

for the policy to “make whole” a returning veteran, rises to an abuse

of discretion. Accord Hembree v. Georgia Power Co., 637 F.2d

at 430. Contra, Chernoff v. Pandick Press, Inc., 440 F. Supp. at

827."

In order that Hanna be “made whole,” we award him pre-

judgment interest, at the rate of 7% per annum, on the $28,905.00

awarded in lost wages for the period between April 24, 1973 and

"The district court reasoned in Chernoff v. Pandick Press that, “[b}y receiv-

ing his lost wages as a lump sum, [plaintiff] will find himself in a much better

financial position than if he had been continuously employed by [defendant]. .

. . [Plantiff] will have been at fast fully ‘made whole’ even without an award

of [prejudgment] interest.” The district court failed to support this novel and unique

theory with any case law and we are unable to find any case law providing that

4 returning veteran who is denied prejudgment interest is “made whole,” within

the meaning of the Vietnam Veterans’ Readjustment Act, simply because he

received lost wages in a lump sum payment. In fact, according to the “legisia-

tion's overall purpose . . . the [returning] veteran should be made whole, and reim-

bursed for the loss suffered throug/: his incorrect reinstatement,” (emphasis add-

ed) Helton v. Mercury Freight Lines, Inc., 444 F.2d at 367, including the in-

terest that would have accrued on the lost wages unlawfully denied the veteran.

Accord Hembree v. Georgia Power Co., 637 F.2d at 430; Green v. Oktibbeha

County Hospital, 526 F. Supp. 49, 53 (N.D. Miss. 1981); Coffy v. Republic Steel

Corp., 91 Lab. Cas. 412,843 (N.D. Ohio 1981) (on remand from the United siates

Supreme Court); Peel v. Florida Department of Transportation, 500 F. Supp.

at 528.

A-24

November 14, 1977." We calculate the total amount of prejudg-

ment interest on this award to be $15,347.56."* In addition, we

award Hanna prejudgment interest, at the rate of 7% per annum,

on the $1,100.74 awarded by the district court for the period bet-

ween December 18, 1970, and February 28, 1971. We calculate

this interest, which accrued before this court’s decision in Hanna

I, to be $487.97."

D. FORD MOTOR CO. v. EEOC

Cross-appellant, AMC, contends that the United States

Supreme Court’s decision in Ford Motor Co. v. EEOC, 458 US.

219 (1982), precludes Hanna from recovering any lost wages for

the period between April 24, 1973, and November 14, 1977. AMC

"Pursuant to Fed. R. App. P. 37, “[i}f a judgment is modified or reversed

with a direction that a judgment for money be entered in the district court, the

mandate shall contain instructions with respect to allowance of interest.” In this

instance, we instruct the district court to apply an interest rate of 7% per an-

num, the statutory interest rate in Wisconsin for the majority of the time in ques-

tion. See Wis. Stats. § 814.04 (1977).

‘Due to the fact that this lawsuit originated in 1975, and has been before

this court on three separate occasions, we have calculated the prejudgment in-

terest award in order to facilitate and expedite payment of the same in the district

court.

According to the AMC wage schedule between April 24, 1973, and

November 14, 1977, after subtracting the amount of veterans’ benefits and the

wages earned from the Wisconsin Natural Gas Company and the Kenosha County

Parks System, Hanr.a would have received $3,911.81 in 1973, $5,798.00 in 1974,

$6,643.64 in 1975, $5,419.72 in 1976, and $7,133.38 in 1976. The prejudgment

interest accruing on this amount, between April 24, 1973, and the date of the

district court's decision on October 27, 1982, is $15,347.56.

"The district court has already awarded $408.00 in postjudgment (post- Hanna

7) interest on the $1,100.74 award for the period between December 18, 1970,

and February 28, 1971. To that award of interest, we now add prejudgment in-

terest, accruing between February 28, 1971, and June 23, 1977, (pre-Hanna /)

in the amount of $487.97.

A-25

reasons that when it reemployed Hanna on March 22, 1973, as

a “new hire,” following his honorable discharge from the Armed

Forces, AMC was relieved of any future duty to pay Hanna lost

wages. In Ford Motor Co. v. EEOC, the United States Supreme

Court held that when Ford refused to hire three qualified women

for a certain position, instead hired three qualified men, later of-

fered the same position to two of the women without seniority

retroactive from their original application, and was then found liable

for sex-basei employment discrimination in violation of 42 U.S.C.

§ 2000e-2(a), Ford was not required to compensate the women for

lost wages which accrued after Ford’s job offer without retroac-

tive seniority.

Following a careful reading of Ford Motor Co. v. EEOC, we

conclude that the Court’s holding is inapplicable to this case which

arises under the Vietnam Veterans’ Readjustment Act. Title 38

U.S.C. § 2021(b) requires that the veteran be “reemployed without

loss of seniority” and that the veteran be given “such status in .

. . employment as [he} would have en oyed if [he] had continued

in such employment continuously. . . . ” Additionally, the United

States Supreme Court has stated that a 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 Corp.,

328 US. at 284-85. If an employer adhered to the holding of Ford

Motor Co. v. EEOC and offered the returning veteran his previous

job but refused to grant the veteran proper seniority and status,

the employer would be in direct violation of 38 U.S.C. § 2021 (b).

Because the application of Ford Motor Co. v. EEOC to a case aris-

ing under the Vietnam Veterans’ Readjustment Act would not only

demean the veteran’s service to his country but would also pro-

mote unlawful activity, we agree with the district court and hold

that the decision in Ford Motor Co. v. EEOC is inapplicable in

this case. Accord Stevens v. Tennessee Valley Authority, 699 F.2d

314, 316 (6th Cir. 1983).

We reverse the judgment of the district court and award ap-

pellant $28,905.00 in lost wages, including prejudgment interest

A-26

in the amount of )15,347.56, for the period between April 24, 1973,

and November 14, 1977. In addition, we award appellant prejudg-

ment interest in the amount of $487.97 on the $1,100.74 in lost

wages awarded by the district court for the period between

December 18, 1970, and February 28, 1971. The district court is

ordered to enter judgment accordingly.

BAUER, Circuit Judge, concurring in part, dissenting in part.

I concur with the majority’s conclusion that, in the absence of any

contrary evidence from the defendant, the plaintiff's evidence

established that he exercised reasonable diligence in seeking com-

parable employment.

In my opinion, however, the majority has misconstrued the

prejudgment interest issue. The majority’s exclusive reliance on the

proposition that the district court’s discretion “must be guided by

the principle of ‘making whole’ the returning veteran,” is incor-

rect. Rather, absent an explicit statutory directive requiring an

award of prejudgment interest, in exercising its discretion the district

court may consider other factors, including “an assessment of the

equities” presented in the case. See, e.g., Lodges 743 & 1746, In-

ternational Association of Machinists v. United Aircraft Corp., 534

F.2d 422, 446 (2d Cir. 1975), cert. denied, 429 U.S. 825 (1976) (case

arising under labor laws). The district court’s consideration in this

case of the amount of the plaintiff's recovery relative to the

“closeness of the liability question” thus does not constitute an abuse

of discretion. Moreover, even if the “make whole” policy of the

Vietnam Veterans’ Readjustment Act precludes such a considera-

tion, nothing in the district court’s opinion indicates that the award

of $28,905.00 lost wages is insufficient to make the plaintiff whole,

as did the lost wages in Chernoff v. Pandick Press, Inc., 440 F.

Supp. 822, 827 (S.D.N.Y. 1977). It is the district court’s discretion

that should control the result in this case. Accordingly, I dissent

from that portion of the majority opinion.

A true Copy:

Teste:

Clerk of the United States Court

of Appeals for the Seventh Circuit

A-27

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WISCONSIN

SAMUEL C. HANNA,

Plaintiff,

Civil Action

v. No. 75-C-27

AMERICAN MOTORS

CORPORATION,

Defendant.

MEMORANDUM DECISION and ORDER

This case, filed over seven and one-half years ago, was reas-

signed to me by the Clerk of this Court following the entry of a

disqualification order by Judge Robert W. Warren of this district

on February 23, 1982. Although it had not reached trial, the case

was the subject of two decisions by the United States Court of Ap-

peals. See Hanna v. American Motors Corp., 557 F.2d 118 (7th

Cir. 1977) and Hanna y. American Motors, an unpublished deci-

sion of the United States Court of Appeals for the Seventh Circuit

dated January 5, 1981.

Following the second remand, which reversed an order dismiss-

ing the case for lack of prosecution, Judge Warren assessed costs

against the plaintiff in the amount of $522.07. In his order of April

16, 1981, Judge Warren stated that the matter would not proceed

further until the costs were paid.

For some reason, unascertainable from the record, the costs

were not paid until 10 months later when, on February 17, 1982,

plaintiff's counsel mailed a check in the appropriate amount to the

attorney for the defendant. Thereafter, Judge Warren entered his

disqualification order and the case was reassigned to me.

A-28

Following the reassignment, I discussed the case with counsel

for both sides, and attempts were made to reach a settlement. No

settlement resulted from the discussions and the case was tried to

the court on October 25, 1982. At the conclusion of the trial, I

stated I would take the matter under advisement and issue a writ-

ten decision within one week. The following constitutes my deci-

sion and order on the merits of the case.

The plaintiff Samuel C. Hanna commenced work as an

assemblyman at the defendant American Motors Corporation’s

(AMC) Kenosha, Wisconsin plant on Sepiember 14, 1970. A col-

lective bargaining agreement in effect at the time between AMC

and the United Auto Workers (UAW) required Mr. Hanna, as a

new employee, to serve a 60-day probationary period before ob-

taining permanent status and a seniority date. After working 60

days, an employee was given permanent status and a seniority date

that related back to the time when the employee started working

at the company.

On September 17, 1970, AMC permitted the defendant to ab-

sent himself from work in order to take a mandatory military ser-

vice pre-induction physical examination. Work was available for

Mr. Hanna on the day that he took off. On December 2, 1970,

Mr. Hanna was absent from work for reasons not explained in the

record. However, on the following three workdays he was required

to report to the Armed Forces Induction Center in Milwaukee,

Wisconsin, for additional pre-induction physical examinations in-

volving lengthy urinalysis. Mr. Hanna’s presence at these examina-

tions was mandatory under the then-applicable Selective Service

law. Work was available for Mr. Hanna at the Kenosha plant on

all the days that he did not report.

Mr. Hanna returned to work on December 8th and worked

until December I8th, when he was laid off due to a reduction in

work force. At the time of the layoff, Mr. Hanna had actually

worked 56 days. If the four military service physical examination

days had been counted towards the completion of his probationary

period, Mr. Hanna would have worked 60 days and thus would

have attained permanent employee status with a Septemver | 4,

1970 seniority date. He also would not have been laid off on

A-29

December 18, 1970 but would have worked until the next layoff

on February 28, 1971.

On March 10, 1971, Mr. Hanna was inducted into the armed

forces. He did not work at AMC from December 18, 1970 until

his induction. On September 10, 1971, while Mr. Hanna was still

in the service, AMC wrote to him stating that his employment was

terminated because he failed to complete a 60-day probationary

period within one year of his starting work for the company. AMC

stated that its conclusion was based on its understanding of the

collective bargaining agreement with the UAW.

Mr. Hanna was honorably discharged from the service on

February 22, 1973. During his tour of duty, Mr. Hanna spent nine

months in Vietnam.

On March 22, 1973, after his military discharge, Hanna was

reemployed by AMC as a “new employee.” AMC took the posi-

tion that Hanna had no veterans reemployment rights under the

Veterans Readjustment Act because he was terminated before he

became a permanent employee. Shortly after being reemployed by

AMC, Mr. Hanna complained that the company was violating his

veterans reemployment rights by refusing to accord him seniority

based on the date of his original hire, September 14, 1970. Ap-

parently not satisfied with the response of AMC, Mr. Hanna left

work on April 24, 1973 with the intention of quitting. He was ter-

minated on that date by the company.

Because AMC refused to reinstate Mr. Hanna with a

September 14, 1970 seniority date, the government filed this suit

on his behalf in 1975’. In the suit, he sought reinstatement, establish-

ment of a September 14, 1970 seniority date, and back pay and

lost pension benefits.

Following the filing of the suit, both sides moved for sum-

mary judgment on the question of liability. The district court

'The suit was instituted by the Department of Justice under 38 U.S.C. § 2022.

Sometime between Harina | and Hanna II, private counsel took over the case

on Mr. Hanna's behalf.

A-30

granted AMC’s motion, buying its argument that the plaintiff only

occupied a temporary position with AMC prior to his induction.

Therefore, the court found that Hanna was not protected by the

Veterans Readjustment Act. The United States Court of Appeals

for the Seventh Circuit, in its first decision in this case, reversed

and found that the plaintiff was covered by the Act.

The Court of Appeals held that Hanna was not a “temporary”

employee on December 18, 1970 when his layoff occurred. Rather,

he should have been designated as a permanent non-probationary

employee. As such, he should have been able to work until the

February 28, 1970 layoff which would have caught him even if

he was a properly classified employee.

The Court of Appeals also held that Mr. Hanna was entitled

to reinstatement with a September 14, 1970 seniority date, and

that he was entitled to collect damages from December 18, 1970

until at least February 28, 1971. The trial on October 25, 1982

concerned the amount of damages that should be awarded.

In a nutshell, the plaintiff contends that he should be awarded

$1,100.74, the wages he lost between December 18, 1970 and

February 28, 1971, and $37,831.00, the wages he lost between April

24, 1973 (the date he left AMC due to the seniority date dispute)

and November 14, 1977? (the date he was reinstated at AMC with

a September 14, 1970 seniority date following the Court of Ap-

peals decision in Hanna I on June 23, 1977). To this total of

$38,931.00, the plaintiff would add an unspecified amount for lost

pension rights and subtract a total of $8,926.00° received during

the period in question as a stipulated offset.

?Mr. Hanna was fired by AMC in May of 1978 and takes no issue here with

the manner in which he was terminated.

$598.00 from a 1974 summer job with the Gas Company in Racine,

$1,312.00 from a 1977 job with the Kenosha County Park Commission and

$7,016.00 in veterans benefits received between September of 1] 973 and December

of 1976 while Hanna was a full time college student.

A-31

I reject any claim for pension benefits in this case. The un-

disputed evidence presented at the trial clearly establishes that ten

years of credited service, including 1,700 hours of work per year

are necessary before a pension vests. Although the pension dollars

are difficult to determine until an employee retires, the plaintiff

has failed to convince me that he would have worked for AMC

the requisite period of time necessary for his pension to vest. This

conclusion is buttressed by the fact that Mr. Hanna was fired in

May of 1978 and would have had no pension rights at that time

even if he would have been employed without interruption from

September 14, 1970. Thus, I find that plaintiff's claim is limited

to a net amount, after offsets, of $30,005.00.

In attacking the plaintiffs claim, the defendant makes a

number of arguments, the major one being that the plaintiff has

failed to mitigate his damages. Closely related to this contention

is AMC’s claim thai the plaintiff, by becoming a full time college

student in September of 1973, abandoned his willingness to con-

tinue in AMC’s employ. Thus, AMC argues, Hanna forfeited any

right to back pay after September of 1973. In addition, in reliance

on Ford Motor Co. v. EEOC, 102 S.Ct. 3057 (1982), AMC argues

that Mr. Hanna was not justified in quitting his job on April 24,

1973 over the seniority date dispute and thus he should not be per-

mitted to recover damages after that date.

The Veterans Readjustment Act, 38 U.S.C. § 201, et seq. and

its predecessors stressed the importance of returning a job-qualified

veteran to his former position with “like seniority, status and pay.”

In a situation such as Mr. Hanna found himself in, seniority was

extremely important. It went to the heart of the security Hanna

could have in the future permanency of his job. Thus, I find that

he did not waive his right to further back pay by quitting his job

on April 24, 1973 when the seniority dispute was not resolved cor-

rectly in his favor. On this point, I find the Ford Motor Co. v.

EEOC case cited by the defendant, which dealt with a sex

discrimination claim, to be inapplicable.

I further find that the plaintiff did not abandon his willingness

to return to work by becoming a student at UW-Parkside in

September of 1973. I believe his decision to return to school can

A-32

more accurately be characterized as pursuing an alternative that

was better than anything else Mr. Hanna had going for him at the

moment. Had he been offered a job at AMC with the correct

seniority date, I find that he would have either quit school and

returned to the job or would have restructured his school courses

so that he could return to full time employment while still remain-

ing a student.

I do find, however, that Mr. Hanna’s full time schooling in-

terfered with his duty to mitigate his damages. Although he did

secure some employment, it was of a seasonal nature, consistent

with the kind of job that college students secure while continuing

their educations.

Furthermore, | find that work of a somewhat comparable

nature to *he unskilled labor performed by Mr. Hanna at AMC

was available in the Kenosha area in which Mr. Hanna lived dur-

ing the period in question. Although it might have been difficult

to find an unskilled laborer’s job that paid as handsomely as did

the one at AMC, Mr. Hanna nevertheless should have more

diligently pursued work that was available. Thus, I find that to

a Significant extent, AMC has demonstrated that Mr. Hanna has

failed to properly mitigate his damages.

I find no failure of a duty to mitigate between December 18,

1970 and February 28, 1971. Thus, during that period, I find that

$1,100.74 is an appropriate amount to be awarded to the plaintiff.

As to the remaining claim for $28,905.00, I find that a reduction

should be made for failure to mitigate, the most important element

of which was the plaintiffs enrollment for almost three years as

a full time college student. Although, as I have said, I do not view

his act as a waiver of his right to seek reinstatement at AMC, I

believe it significantly cooled his ardor for job hunting. I believe

a 70% reduction for failure to mitigate on this point is appropriate,

and thus I award the plaintiff $8,671.50 for post-April 1973

damages. On the December 18, 1970 to February 28, 1971 award

of $1,100.74, I believe a further award of post-judgment interest

from June 23, 1977 (the date of the decision in Hanna I) to date

is appropriate. Because of the closeness of the liability question and

the good faith of AMC in reasonably construing its collective

A-33

bargaining agreement with the UAW (in other words, I do not in

any way view this case as one where AMC blatantly disregarded

the rights of a veteran), I will not award interest on the damages

found to be due for the period of time that followed April 24, 1973.

Thus, the total award to the plaintiff will be $9,772.24 plus

interest of $408.00, for a total of $10,180.24 plus costs. Judgment

shall be entered accordingly.

SO ORDERED at Milwaukee, Wisconsin, this [27] day of

October, 1982.

BY THE COURT:

/si)_ [Terence Evans]

TERENCE T. EVANS

UNITED STATES DISTRICT JUDGE

A-34

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

Argued: December 16, 1980

January 5 ,19 81.

Before

Hon. _ THOMAS E. FAIRCHILD, Chief Judge

Hon. _ ROBERT A. SPRECHER, Circuit Judge

Hon. _ HARLINGTON WOOD, JR.., Circuit Judge _

SAMUEL C. HANNA,

Appeal from the United

States District Court

for the Eastern District

Plaintiff-Appellant,

)

)

)

)

)

)

)

)

)

)

No. 79-1303 VS. of Wisconsin

AMERICAN MOTORS

CORPORATION, No. 75-C-27

Robert W. Warren. Judge.

Defendant-Appellee.

ORDER

I

Plaintiff-appellant, Samuel C. Hanna, appeals from the in-

voluntary dismissal of his suit pursuant to Fed. R. Civ. P. 41(b).

The suit is against American Motors Corporation (AMC) and was

Originally instituted on Hanna’s behalf by the Department of Justice

on January 16, 1975, under the reemployment provisions of the

Vietnam Veterans Readjustment Act (38 U.S.C. §2024(d) and (e)).

The relief sought included job reinstatement with proper seniority

Status and pay, as well as lost wages.

A-35

In 1977, the case was before this court on an earlier appeal

from the district court’s summary judgment granted in favor of

AMC. The court reversed the district court’s judgment, holding

that Hanna was entitled under the Act to reinstatement and lost

wages. It remanded the case to the district court for a determina-

tion of the amount of lost wages owed. Hanna v. American Motors

Corporation, 557 F.2d 118, 122 (7th Cir. 1977).

On remand, the district court originally scheduled a final

pretrial conference for July 14, 1978. Both parties subsequently

moved that this conference be continued to August 1], 1978. The

court’s summary of the August Ist conference indicates that, at

that time, the parties were encouraged to pursue settlement and

a discovery cut-off date of October 2, 1978, was entered. A new

final pretrial conference date was set for October 27, 1978. On

October 18, 1978, the Justice Department filed a motion to

withdraw as counsel for Hanna, citing as grounds therefor a possi-

ble conflict of interest. The district court granted the motion by

order entered the same day. On October 27, 1978, Hanna failed

to appear for the scheduled pretrial conference, and the conference

was again reset for December 20, 1978. By letter dated October

30, 1978, Judge Warren informed Hanna of the new date for the

final pretrial conference. He also enclosed in this letter a copy of

the court’s standing final pretrial order, and explained that it re-

quired the parties to prepare and file a joint final pretrial report

at least three days before the scheduled conference and that the

principal burden for the preparation of the report was on the plain-

tiff. The letter cautioned that the “[flailure of any party to comply

with this Court’s order could result in a dismissal of this action.”

On or about November 16, 1978, Attorney Robert Sfasciotti

informed the court that he had been retained as Hanna’s counsel.

He was informed of the final pretrial conference date and given

a copy of the court's standing final pretrial order. Attorney Sfasciotti

Suusequently obtained two continuances of the final pretrial con-

ference, first to January 12, and then to January 26, 1979. Accord-

ing to an affidavit filed with plaintiff's notice of appeal, the

postponements were requested because of Attorney Sfasciotti’s in-

volvement in a criminal trial in another court during the week of

December 20th, and because of his inability to obtain the Justice

A-36

Department's file on his client’s case. Sfasciotti maintains that he

needed the government's file to prepare the pretrial report but was

unable to obtain it prior to January 26 as a result of inclement

weather, his own illness, tie government’s caseworker’s absence

on vacation and then, upon her return, her refusal to allow the

file out of her office.’

Despite his inability to review the government's file, Sfasciotti

did not request a further continuance of the final pretrial conference

set for January 26, 1979. Nor did he submit a pretrial report,

although such a report was submitted by AMC. When the con-

ference was called on January 26, 1979, neither Hanna nor his

counsel were present. AMC moved to dismiss pursuant to Rule

41(b) for failure to comply with an order of the court, and the district

court granted the motion. Attorney Sfasciotti arrived in court four-

teen minutes after the time set for the conference. He asked to ex-

plain the situation to the court but was refused a hearing even

though counsel for AMC was still available. Judgment was entered

dismissing the action with prejudice on February 7, 1979.

It is well-established that under Fed. R. Civ. P. 41(b), as well

as under the inherent power of the court, a complaint can be dis-

missed with prejudice for want of prosecution or for failure to com-

ply with a rule or order of the court.’ Link v. Wabash Ry. Co.,

370 U.S. 626 (1962). Moreover, dismissal under such circumstances

‘Although the case was instituted by the Department of Justice under 38

U.S.C. § 2022, it was prosecuted by an attorney from the Office of the Solicitor,

United States Department of Labor, out of a Chicago office.

*By directly appealing his Rule 41 (b) dismissal, Hanna failed to utilize what

is considered the better practice of first moving in the trial court under Rule 60(b)

to vacate the dismissal and then appealing from the denial of that motion, if

necessary. This is considered the better practice because it allows the trial court

an Opportunity to reconsider and correct its own mistakes. 5 Moore, Federal Prac-

tice $41.12 at 41-170 (1980); Beshear . Weinzapfel, 474 F.2d 127, 130 (7th Cir.

1973).

‘Often a failure to comply with an order of the court is viewed as a failure

to prosecute. See Link v. Wabash, supra; Beshear v. Weinzapfel, 474 F.2d 127

(7th Cir. 1973).

A-37

rests largely within the discretion of the trial court and, absent a

showing of abuse of that discretion, will not be overturned on ap-

peal. 5 Moore, Federal Practice 41.12 at 41-169 (1980). The power

to impose sanctions for a lack of prosecution or for a failure to

comply with a court order is intended to assist the trial court in

maintaining control over its own calendar and in preserving its in-

tegrity. Reviewing courts are understandably reluctant to interfere

with a lower court’s efforts to achieve either of these important

goals.

On the other hand, courts have also recognized that “dismissal

is a harsh sanction which should be resorted to only in extreme

cases.” Scarver v. Allen, 457 F.2d 308, 310 (7th Cir. 1972); Richman

v. General Motors Corporation, 437 F.2d 196, 199 (Ist Cir. 1971);

Davis v. Operation Amigo, Inc., 378 F.2d 101, 103 (10th Cir. 1967).

Moreno yv. Collins, 362 F.2d 176, 178 (7th Cir. 1966) (“It is, in-

deed, a high penalty for an innocent party to have her suit dismissed

because her associate counsel, in a distant city, did not check with

the Law Bulletin calendar at the very early stages of the case.”)

It is directly contrary to that policy of the law which favors the

hearing of a litigant’s claim upon the merits. Scarver v. Allen, supra.

Moreover, because the court has a broad panoply of lesser sanc-

tions available to it,‘ dismissal with prejudice should normally be

invoked only as a last resort. J. F. Edwards Const. Co. v. Anderson

Safeway, Etc., 542 F.2d 1318, 1324 (7th Cir. 1976); Richman v.

General Motors Corp., supra; Flaska v. Little River Marine Const.

Co., 389 F.2d 885, 888 (Sth Cir. 1968). This court has stated, with

regard to enforcement of a court’s pretrial order, “[t}he ultimate

sanction of dismissal should be utilized only in the face of conduct

so reprehensible that no other alternate sanction would protect the

integrity of the pre-trial procedures contemplated by Rule 16.” J.F.

Edwards Const. Co. v. Anderson Safeway, Etc., supra. Other courts

have similarly limited use of the sanction of dismissal to cases in

which there is a showing of extreme circumstances. As Judge

Wisdom stated in Durham v. Florida East Coast Ry. Co., 385 F.2d

366, 368 (Sth Cir. 1967):

‘E.g. contempt, fines, imposition of costs, conditional orders of dismissal,

etc. See generally Sanction at Pre-Trial Stages, 72 Yale LJ 819 (1963).

A-38

[t]he sanction of dismissal is the most severe sanction

that a court may apply, and its use must be tempered

by a careful exercise of judicial discretion. Durgin v.

Graham, 1967, 5 Cir., 372 F.2d 130, 131. The decided

cases, while noting that dismissal is a discretionary mat-

ter, have generally permitted it only in the face of a clear

record of delay or contumacious conduct by the plaintiff.

See also Reizakis v. Loy, 490 F.2d 1132, 1135 (4th Cir. 1974); Dove

v. Codesco, 569 F.2d 807, 810 (4th Cir. 1978).

Despite the severity of the sanction, AMC argues that dismissal

was warranted in this case whether failure to comply with the

court's order is considered by itself or in the context of the sur-

rounding circumstatices. It argues that Hanna's disobedience of the

district court's pretrial order was preceded by a course of unqualified

indifference to the court and that the disobedience itself amounted

to a deliberate and inexcusable disregard of the order.

In arguing that the circumstances preceding Hanna's disobe-

dience of the court's order support the district court's dismissal of

his suit, AMC seeks to place responsibility for the lengthy pro-

cedural history of this case primarily on Hanna’s shoulders. The

record does not support this contention. Much of the delay in the

case resulted from the erroneous entry of summary judgment

against Hanna, reversed by this court on appeal. On remand, a

status conference was held on February 15, 1978, at which time

the district court scheduled a final pretrial conference for July 14,

1978, and entered its standing pretrial order. Although this con-

ference was subsequently continued to August |, 1978, AMC can

hardly blame Hanna for this delay since both parties together re-

quested the continuance.

AMC does contend, however, that Hanna’s attendance of the

August |, 1978, conference without filing his pretrial report con-

stituted open disregard of the court's pretrial order. Even this claim

is not well-founded. At the time of the August conference, Hanna

was still represented by the Justice Department and the parties were

in the midst of discovery. Although the conference was designated

a final pretrial conference, it appears that neither the parties, nor

A-39

the court, regarded it as such. The court's summary of the con-

ference indicates that the parties were encouraged to continue to

pursue settlement and a discovery cut-off date was set for October

2, 1978. No mention was made of Hanna's failure to file a pretrial

report prior to the conference. Under these circumstances, we refuse

to view such failure as evidencing a disregard of the court’s stand-

ing pretrial order.

AMC also states that during this period Hanna refused to

answer interrogatories which it had propounded to him and instead

filed objections. Of course, this cannot be construed as evidence

of delay since this is precisely the procedure called for when a party

claims valid grounds for refusing to answer. Rule 33, Fed. R. Civ.

P. There is no indication in the record that Hanna's objections were

wholly without merit or raised merely for purposes of delay.

The first clear instance of Hanna's disobedience of an order

of the court was his failure to appear at the pretrial conference

set for October 27, 1978. This occurred less than ten days after

the district court granted the government's motion to withdraw

as counsel and before Hanna had reiained new counsel. While not

excusable, this conduct may be somewhat mitigated by these facts.

In any event, it does not constitute the kind of “unqualified indif-

ference to the court” claimed by AMC.

Still, it is undisputed that plaintiff did in fact disobey the district

court's order by failing to file a pretrial conference report and by

failing to appear on time at the final pretrial conference. When

viewed in the context of his failure to appear at the October 27th

conference, and the two continuances subsequently requested and

obtained from the court, it becomes a close question as to whether

the district court’s dismissal of the action constitutes an abuse of

discretion.

Nevertheless, we conclude that it does constitute an abuse of

discretion and that lesser sanctions should have been utilized. This

is Not a case with so little merit that the failure to arrive on time

for a scheduled pretrial conference can be viewed as indicative of

a lack of inclination on the purt of the plaintiff to try his case. See

Beshear v. Weinzapfel, 474 F.2d 127 (7th Cir. 1973). At the time

A-40

of the dismissal, Hanna had already pursued his claim once through

the appellate process and had essentially won on the question of

liability. All that remained to be determined on remand was what,

if any, damages he was entitled to recover. The fact that Hanna

retained private counsel after the Department of Justice withdrew

is further reflective of his continued intent to pursue his claim.

Of course, even meritorious claims are properly subject to

dismissal under Fed. R. Civ. P. 41(b), where a plaintiff fails to com-

ply with a valid court order. But a proper exercise of discretion

requires that the harshest of possible sanctions be utilized only when

lesser ones would most likely fail to protect the interests at stake.

In our view, this was not such a case.

Plaintiff's conduct, to be sure, is deserving of some penalty.

The failure to comply with an order of the court not only causes

unnecessary delay, but is an affront to the court's integrity. Such

conduct cannot be allowed to go unsanctioned. However, dismissal

of an obviously meritorious claim is simply too harsh under these

circumstances. We see no conduct so reprehensible that a liberal

allowance of costs for the delay caused by Hanna's failure to com-

ply with the court's order would not serve as an adequate remedy.

We therefore vacate the district court's order of dismissal and

reinstate plaintiff's action, contingent upon his payment of costs,

including attorney's fees, for the thwarted pretrial conference. Such

costs are to be assessed by the district court on remand. The par.

ties shall each bear their own costs on this appeal.

A-41

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WISCONSIN

SAMUEL C. HANNA,

Plaintiff,

VS. Case No. 75-C-27

AMERICAN MOTORS

CORPORATION,

Defendant.

ORDER

On January 26, 1979, a final pretrial conference was scheduled

in the above-captioned case. According to the Court’s standing final

pretrial order distributed to the parties some months ago, the final

pretrial report was to be submitted to the Court three days prior

to this scheduled conference. Although this was to be a joint report,

primary responsibility for the compilation and submission of said

report rests with the plaintiff.

Plaintiff failed to submit the final pretrial report to the Court

prior to the scheduled final pretrial conference and failed to ap-

pear on time for the scheduled conference. On motion of the de-

fendant, the Court dismissed the action.

In doing so, the Court noted that plaintiff failed to comply

with the Court’s final pretrial order and failed to make a timely

appearance at the final pretrial conference. In addition, the Court

recounted the current procedural history of this case. On October

27, 1978, a final pretrial conference was scheduled but plaintiff

failed to appear so another final pretrial conference was set for

December 20, 1978. On about November 16, 1978, Attorney

Robert Sfasciotti informed the Court that he had been retained

A-42

as plaintiff's counsel. The Court informed him of the final pretrial

conference date and sent him a copy of the Court's standing final

pretrial order.

On December 19, 1978, at the request of plaintiff's counsel,

the scheduled final pretrial conference was postponed until January

12, 1979. On January 10, 1979, this January 12 final pretrial con-

ference was rescheduled for January 26, 1979, again at the request

of plaintiff's counsel.

No request was made to reschedule the January 26, 1979 con-

ference nor was there any request to delay submission of the final

pretrial report.

At the final pretrial conference, the Court observed that no

final pretrial report had been filed, that plaintiff's counsel failed

to appear at the time scheduled and that this was the fourth time

a final pretrial conference had been scheduled in this action (the

third time since Mr. Sfasciotti was retained as plaintiff's counsel).

The Court granted defendant’s motion to dismiss the action.

Based on the foregoing, this Court hereby orders that this ac-

tion be and is hereby dismissed with prejudice pursuant to Rule

41(b) of the Federal Rules of Civil Procedure without costs to either

party. '

SO ORDERED this __[6th]__ day of ___ [February]

1979, at Milwaukee, Wisconsin.

Isi_ [Robert W. Warren]

UNITED STATES DISTRICT JUDGE

A-43

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 76-1727

SAMUEL C. HANNA,

Plaintiff-A ppellant,

A

AMERICAN MOTORS CORPORATION,

Defendant-A ppellee.

Appeal from the United States District Court for the

Eastern District of Wisconsin

No. 75-C-27 — Robert W. Warren, Judge

ARGUED JANUARY 17, 1977 — DECIDED JUNE 23, 1977

Before FAIRCHILD, Chief Judge, CASTLE, Senior Circuit

Judge, and CUMMINGS, Circuit Judge.

CUMMINGS, Circuit Judge. Plaintiff brought this suit to ob-

tain job reinstatement with proper “seniority, status and pay,” in

cluding lost wages, under the reemployment provisions of the Viet-

nam Veterans’ Readjustment Act (38 U.S.C. § 2024(d) and (e)).

Plaintiff is an honorably discharged veteran whose suit was in-

stituted by the Department of Justice under 38 U.S.C. § 2022. He

commenced work as an assemblyman at defendant American

Motors Corporation’s Kenosha, Wisconsin, plant on September 14,

1970. The applicable collective bargaining agreement required him,

as a new employee, to serve a 60-day probationary period before

obtaining seniority. Attainment of seniority after the 60-day period

was automatic and related back to the employee’s hiring date.

A-44

On September 17, 1970, defendant permitted plaintiff to ab-

sent himself from work in order to take a mandatory military ser-

vice pre-induction physical examination. Work was available for

the plaintiff that day if he had not been required to take the physical.

On September 21, his hourly wage was increased from $3.25 per

hour to $3.60 per hour at the request of his foreman.

On Wednesday, December 2, 1970, plaintiff was absent from

work for reasons not apparent from the record. However, on Thurs-

day, December 3, Friday, December 4, and Monday, December

7, 1970, he was required to report to the Armed Forces Induction

Center in Milwaukee, Wisconsin, for additional pre-induction

physical examinations involving lengthy urinalyses. Plaintiffs

presence at these examinations was mandatory under the Selec-

tive Service Act. Work would have been available for plaintiff at

the Kenosha plant on all four of those days had he reported. He

was put back to work on Tuesday, December 8, and worked until

December 18, when he was laid off due to a reduction in force.

This reduction included all assembly linemen who had not yet com-

pleted their 60-day probationary period. At that time, plaintiff had

actually worked 56 days. Therefore, if the four military service

physical examination days had been counted toward the comple-

tion of his probationary period, plaintiff would have attained a

seniority status with a September 14, 1970, seniority date and would

not have been laid off until February 28, 1971.

On March 10, 1971, plaintiff was inducted into the Armed

Forces before being recalled to active employment by defendant.

Six months later, on September 10, 1971, while he was still in

military service, defendant wrote plaintiff that his employment was

terminated because he had failed to complete the 60-day proba-

tionary period within one year of the date of his first employment,

pursuant to the collective bargaining agreement.

Plaintiff was honorably discharged from military service on

February 22, 1973, and was reemployed by defendant as a “new

hire” on March 22, 1973, well within the statutory 90-day period

for reemployment. 38 U.S.C. § 2021(a)(2). Defendant took the posi-

tion that plaintiff had no veteran's reemployment rights under the

Vietnam Veterans’ Readjustment Act because he had been ter-

A-45

minated before attaining seniority status and therefore was only

a temporary employee and outside the scope of the Act. On April

2, his hourly wage as a new hire was increased from $4.14 to $4.52

per hour at the request of his foreman.

On April 23, plaintiff complained to defendant that it was

violating his veteran’s reemployment rights by refusing to accord

him seniority based on the date of his original hire, September 14,

1970. Not receiving any satisfaction from defendant, plaintiff left

work on April 24, 1973, with the intention of quitting. He was

therefore terminated by defendant on that date although his abil-

ity, conduct and work performance were still considered as

“average” by defendant.

Because defendant refused to reinstate plaintiff with the

claimed seniority, the Government filed this suit on his behalf. Both

parties filed motions for summary judgment on the question of

liability. The district court granted defendant’s summary judgment

on the ground that plaintiff had only occupied a temporary posi-

tion and therefore was not covered by the Vietnam Veterans’ Read-

justment Act. This appeal followed. We reverse.

The statute in question’ provides that a job-qualified return-

ing veteran is entitled to be restored to his former position or “to

a position of like seniority, status and pay.” 38 U.S.C.

§ 2021(a)\(B)(i). A workman “called to the colors was not to be

penalized on his return by reason of his absence from his civilian

job.” The statute places the returning veteran on the seniority

'The original statute establishing veterans’ reemployment rights was the Selec-

tive Training and Service Act of 1940, 54 Stat. 885. The name of the Act was

changed in 1948 to the Selective Service Act of 1948, 62 Stat. 604, and again

in 1951 to the Universal Military Training and Service Act, 65 Stat. 75. In 1967

the Act was renamed the Military Selective Service Act of 1967, 81 Stat. 100,

and in 1971] the name was changed to the Military Selective Service Act, 85 Stat.

348, and found at 50 U.S.C. App. § 459. The reemployment provisions of the

Military Selective Service Act were codified in 1974 with non-substantive word-

ing changes in the Vietnam Veterans’ Readjustment Act of 1974, 88 Stat. 1578,

38 U.S.C. § 2021 ef seg. The reemployment provisions of the various Acts are

substantially identical. Thus the judicial precedents developed under them are

largely interchangeable.

pe

A-46

escalator “at the precise point he would have occupied had he kept

his position continuously during the war.” See Fishgold v. Sullivan

Corp., 328 U.S. 275, 284-285; 38 U.S.C. § 2021(b)(2). It accords

an employee a leave of absence for purposes of pre-induction Armed

Forces physical examinations, and therefore the employee must

be permitted to return to his position “with such seniority, status,

pay and vacation as such employee would have had if such

employee had not been absent for such purposes.” 38 U.S.C.

§ 2024(d) and (e). This protection is equal to that provided in-

dividuals embarking on active duty. Fortenberg v. Owen Bros. Pack-

ing Co., 267 F. Supp. 605 (S.D. Miss. 1966), affirmed, 378 F.2d

373 (Sth Cir. 1967). However, this statutory protection extends

only to an employee who absents himself from a position “other

than a temporary position.” 38 U.S.C. § 2021(aA) and (B) and

§ 2024(e).

Under Tilton v. Missouri Pacific R. Co., 376 U.S. 169, 181,

a returning veteran is entitled to count his military service time

toward a promotion if he demonstrates that as a matter of foresight

it was reasonably certain that advancement would have occurred

and that it did occur as a matter of hindsight. However, Tilton

lays down the condition that a “returning veteran cannot claim

a promotion that depends solely upon satisfactory completion of

a prerequisite period of employment training unless he first works

that period.” Jd. In Brickner v. Johnson Motors, 425 F.2d 75 (7th

Cir. 1970), we applied 7i/ton and overruled our previous decision

in Lesher v. P.R. Mallory & Co., Inc., 166 F.2d 983 (7th Cir. 1947),

in interpreting the phrase “other than a temporary position.” In

Brickner we established a two-part test for determining whether

a position is “other than temporary.” If the position itself is tem-

porary, the employee is excluded from the protection of the Act.

To satisfy the second criterion, we held

“an employee who has a probationary status previous

to leaving for military service must show that as a mat-

ter of foresight it was reasonably foreseeable that upon

completion of the probationary period the employee

would receive permanent status and as a matter of hind-

sight, it did in fact occur. The inquiry is not whether

the employee would complete the probationary period

A-47

but upon completion whether the employee would

receive permanent status.” (425 F.2d at 77) (Emphasis

supplied).

The collective bargaining agreement in Brickner provided automatic

permanent status at the completion of a 90-day probation period.

Since Brickner completed a new probationary period after his return

from service, this Court found that he held an “other than tem-

porary position.” Plaintiff was held entitled to seniority from his

original date of employment.

Our mandate is “to construe the separate provisions of the

Act as parts of an organic whole and give each as liberal a con-

struction for the benefit of the veteran as a harmonious interplay

of the separate provisions permits.” Fishgold v. Sullivan Corp., 328

US. 275, 285. Accord, Alabama Power Co. v. Davis, 45 LW 4588,

4589. The Act’s purpose is “to assure that these changes and ad-

vancements in status that would necessarily have occurred simply

by continued employment will not be denied the veteran because

of his absence in the military service.” Jd. n. 8. In this task, the

Supreme Court has rejected the idea that “the Act protects only

rights which are a mere function of time in grade and does not

entitle the veteran to be treated as if he had been actively employed

or trained during the period of military service.” Tilton, supra, 376

U.S. at 176. It is in the light of these principles that we apply

Brickner to this case.

Plaintiff's position with defendant was “other than temporary”

under the first Brickner test because the defendant concedes here

that the position of assemblyman is permanent (App. 80). The

foresight aspect of the second inquiry of Brickner is satisfied because,

except for the four days spent at the pre-induction physical examina-

tions, plaintiff would have acquired permanent status by December

18, 1970, when he was laid off, for permanent status was automatic

upon the completion of the probationary period. Collins v. Weirton

Steel Co., 398 F.2d 305, 309-310 (4th Cir. 1968). His advancement

to permanent status was not “subject to a significant contingency.”

Alabama Power, supra, 45 LW at 4590.

A-48

Under the hindsight test of Brickner, permanent status did oc-

cur in point of law (despite defendant’s protestations) by December

18 because work was available for him on the four physical ex-

amination days and his work was routinely found satisfactory before

layoff. Contrary to defendant’s argument, Brickner did not hold

that a veteran must have completed his probationary period before

acquiring any rights under the Act. Such a holding would have

in large measure rendered meaningless this Court’s decision to over-

rule the rule of Lesher v. P. R. Mallory & Co., Inc., 166 F.2d 983

(7th Cir. 1947), that a probationary employee per se occupies a

“temporary position.” Unlike the present case, Brickner had 57 days

left to serve in his probationary period when he entered miltary

service. Nothing in Brickner indicates that the plaintiff there had

been granted any days of leave of absence status due to military

reasons. Consequently, whether the four days plaintiff was required

to attend pre-induction physicals may be counted towards the com-

pletion of the probationary period, thereby fulfilling the strict hind-

sight test, is an open question in this Court.

The strict hindsight prong of the Brickner test has subsequently

been somewhat muted in Pomrening v. United Airlines, Inc., 448

F.2d 609, 613 (7th Cir. 1971):

“jt must appear, as a matter of hindsight, that [plaintiff]

would have probably completed his [probation] in the

normal course had it not been interrupted by his military

service.”

In Tilton where job-qualifying training was involved, the Act can-

not serve as a magic wand which gives a job to a returning veteran

which requires training for its successful performance unless he

first completed his training period. But when a probation rather

than a training program is involved, Brickner itself directs that the

“inquiry is not whether the employee would complete the proba-

tionary period but upon completion whether the employee would

receive permanent status.” 425 F.2d at 77; United States ex rel.

Adams v. General Motors Corp., 525 F.2d 161 (6th Cir. 1975).

Since plaintiff's ability, conduct and work performance were con-

cededly satisfactory, he actually would have received permanent

Status but for railitary service since the probationary period here

A-49

was not intended to develop skills or increase proficiency.” As a

probationary employee [Hanna] had every reason to expect that

his employment would be continuous and for the indefinite future”;

in short, “other than temporary.” Moe v. Eastern Air Lines, 246

F.2d 215, 219 (Sth Cir. 1957); Collins v. Weirton Steel Co., 398

F.2d 305, 309 n. 6 (4th Cir. 1968). Therefore, when laid off on

December 18, 1970, plaintiff was in “other than a temporary”

position.

In any event, application of a strict hindsight principle is un-

necessary where the employer refuses to rehire a veteran whose

probation is incomplete. Collins, supra, 398 F.2d at 309 n. 8. Here,

as shown above, if the company had credited the four days of

physicals, plaintiff would not have been laid off until over two

months later than he actually was. By refusing to let plaintiff work

through February 28, when the next most junior men were laid

off, defendant made it impossible for plaintiff to complete his pro-

bation within a year of the date of his first employment despite

his ability and willingness to do so. Completion of probation should

be excused where it is the fault of the employer and not the veteran

that the probation was not completed in accordance with the terms

of the collective bargaining agreement.

As seen, plaintiff should be viewed as having held an “other

than temporary position” as early as the layoff date of December

18, 1970. Therefore, under 38 U.S.C. § 2024(d) and ¢e), plaintiff

had to be credited with the four days he missed due to the pre-

induction physicals. Were plaintiff credited with the four days, he

would have been deemed non-probationary and would not have

been laid off until February 28, 1971. It is irrelevant that the defen-

dant may have laid him off in good faith Cf. O'Mara v. Petersen

Sand & Gravel Co., 488 F.2d 896, 898 (7th Cir. 1974). But for

the pre-induction physicals, plaintiff would have collected his salary

until February 28, 1971, and would have been reinstated upon

return from active duty with a September 14, 1970, date with all

attendant rights under the collective bargaining agreement. Thus

under the Act plaintiff is entitled to reinstatement with a September

14, 1970, seniority date and to collect lost wages from December

A-50

18, 1970, until at least February 28, 1971, his proper layoff date.’

38 U.S.C. § 2022; United States ex rel. Adams v. General Motors

Corp., supra. Plaintiff did not waive his rights under the Act by

his April 24, 1973, refusal to continue in the inferior status accorded

him by the defendant. O'Mara v. Petersen Sand & Gravel Co., 498

F.2d 896 (7th Cir. 1974).

Accordingly, the district court’s judgment is reversed and

remanded for further proceedings consistent herewith.

A true Copy:

Teste:

Clerk of the United States Court

of Appeals for the Seventh Circuit

*He will also be entitled to recover lost wages from April 24, 1973, when

he left defendant's employ, to date unless on remand defendant can show that

plaintiff abandoned his willingness to continue in its employ under the condi-

tions mandated by the Act when he enrolled in the University of Wisconsin-

Parkside in September 1973 as a student seeking a degree. See Taylor v. Safeway

Stores, Inc., 524 F.2d 263, 267-268 (10th Cir. 1975).

A-5]

UNITED STATES DISTRICT COURT

FOR THE

EASTERN DISTRICT OF WISCONSIN

SAMUEL C. HANNA,

Plaintiff,

VS. CIVIL ACTION

FILE NO. 75-C-27

AMERICAN MOTORS

CORPORATION,

Defendant.

ORDER

This case came before the Court on motion of plaintiff for

partial summary judgment, with briefs in support of and in opposi-

tion to such motion and with oral argument. During the course

of the oral argument defendant moved orally for summary judg.

ment as to the first count of the complaint. The Court, having

reviewed the briefs and considered the oral arguments, found as

to the first count of the complaint that there are no genuine issues

as to any material fact and that defendant is entitled to judgment

as a matter of law, pursuant to Rule 56 of the Federal Rules of

Civil Procedure. Upon being advised of such finding, plaintiff in-

dicated he would acquiesce in a motion to dismiss the second count

of the complaint, and defendant then made such motion. On the

basis of the foregoing.

IT IS ORDERED that plaintiff's motion for partial summary

judgment is denied, and

IT IS FURTHER ORDERED that defendant's oral motion

for summary judgment as to the first count of the complaint is

granted, and

A-52

IT IS FURTHER ORDERED that defendant's oral motion

to dismiss or in the alternative for summary judgment as to the

second count of the complaint is granted, and

IT IS THEREFORE ORDERED, ADJUDGED and

DECREED that the action is dismissed with prejudice in its entirety.

Dated: [May_ 19] , __19[76)}

/si)_ [Robert W. Warren]

Honorable Robert W. Warren

United States District Judge