# Petition — American Motors Corp. v. Hanna

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1984
- **Citation:** 467 U.S. 1241

## Text

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
ES Ee Ee NO i
EE iii
EE l
a. sptvunsassncovessoos 2
a scstnsscensnsoncce 2
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
Ee ae Si IN erchickndsrnictdbcsccseheniescheccnisenasbiiaiiiies

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.

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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
u

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1541%3A1. Public record. Not legal advice.