Petition for Writ of Certiorari — Accardi v. Pennsylvania Railroad

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CITATIONS

Cases:

Alvado v. General Motors Co., 229 F. 2d 408,

certiorari denied, 351 U.S. 983___..-_----- 10

Baltimore & Ohio. R. Co., etc. v. United Rail-

road Wkrs., 176 F. Supp. 53, affirmed in part

and reversed in part, 271 F. 2d 87, vacated

and remanded, 364 U.S. 278________------ 5

Borges v. Art Steel Co., 246 F. 2d 735- ~~ -_-- 10

Brooks v. Missouri Pacific R. Co., 376 U.S. 182- 9,

10, 14

Diehl v. Lehigh Valley R. Co., 348 U.S. 960_.. 9,10

Dwyer v. Crosby Co., 167 F. 2d 567__------- 10

Fishgold v. Sullivan Drydock & Repair Cor-

i rr i. dcctenewensoenes e)

Hire v. E. I. DuPont de Nemours & Co., 324 F.

ER NIE SR SAESES Tock "ane ng = ee Co 12

McKinney v. Missouri-Kansas-Texas R. Co.,

ee Se eae 10

Menizel v. Diamond, 167 F. 2d 299____-_---- 11

Moe v. Eastern Air Lines, 246 F. 2d 215__--- 10

Seattle Star v. Randolph, 168 F. 2d 274_----- 14

777-704— 651 (1)

Cases—Continued Page

Siaskiewicz v. General Electric Co., 166 F. 2d

Tilton v. Missouri Pacific R. Co., 376 U.S. 169-

9,

10, 14

Statutes:

Selective Training and Service Act of 1940,

Sec. 8, 54 Stat. 885, 890, as amended, 50

U.S.C. App. (1946 ed.) 308_1, 2, 3, 4, 6, 7, 11, 12, 14

Selective Service Act of 1948, Sec. 9, 62 Stat.

615 (renamed the ‘Universal Military

Training and Service Act’ by the Act of

June 19, 1951, 65 Stat. 75), 50 U.S.C. App.

Me cibadabitciwescek<achn don caa 4, 7,8, 11, 12

Miscellaneous:

I Pia oie vn ecg hb es cledion 12

SO Us ee Wee. oss Be Soke Se 13

GB Cotem, et. BEV. oss bk a

Gu the Supreme Gourt of the United States

OctoseR TERM, 1965

No.

PasQuaLE J. ACCARDI, ET AL., PETITIONERS

Vv.

THE PENNSYLVANIA RaILRoAD COMPANY

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

The Solicitor General, on behalf of Pasquale J.

Aceardi, Jacob Grubesick, Alfred J. Seevers, Anthony

J. Varsallo, Abraham 8. Hoffman, and Frank D.

Pryor,’ prays that a writ of certiorari issue to review

the judgment of the United States Court of Appeals

for the Second Circuit entered in this case on January

25, 1965.

OPINIONS BELOW

The opinion of the United States District Court

for the Southern District of New York is reported at

229 F. Supp. 193. _The opinion of the court of appeals

(App., infra, p. 17) is reported at 341 F. 2d 72.

?The Department of Justice represents these veterans pur-

suant to Section 8(e) of the Selective Training and Service Act

of 1940, 54 Stat. 885, 891, 50 U.S..C. App. (1946 ed.) 308(e).

(1)

2

JURISDICTION

The judgment of the court of appeals (App., infra,

p. 22) was entered on January 25, 1965. By order of

Mr. Justice Harlan the time for filing a petition for

a writ of certiorari was extended to and including

June 21, 1965. The jurisdiction of this Court is in-

voked under 28 U.S.C. 1254(1).

QUESTIGN PRESENTED

Employees whose jobs with the respondent railroad

were abolished in 1960 were paid separation allow-

ances based upon the number of months in which they

had worked at least one day for the respondent. The

question presented is whether, by virtue of Section 8

of the Selective Training & Service Act of 1940 (now

Section 9 of the Universal Military Training & Serv-

ice Act of 1951, 50 U.S.C. App. 459), the separation

allowances paid to employees whose employment was

interrupted by military service should be computed as

if they had been continuously employed by respondent

during their absence in the Armed Forces.

STATUTE INVOLVED

1. The pertinent provisions of Section 8 of the Se-

lective Training and Service Act of 1940, 54 Stat. 885,

890, as amended, 50 U.S.C. App. (1946 ed.) 308, are as

follows:

(a) Any person inducted into the land or

naval forces under this Act for training and

service, who, in the judgment of those in au-

thority over him, satisfactorily completes his

period of training and service * * * shall be

entitled to a certificate to that effect upon the

3.

completion of such period of training and

service * * °. * *# & ‘

(b) In the ease of any such person who, in

order to perform such training and service,

has left or leaves a position, other than a tem-

porary position, in the employ of any employer

and who (1) receives such certificate, (2) is

still qualified to perform the duties of such

position, and (3) makes application for reem-

ployment within ninety days after he is relieved

from such training and service or from hos-

pitalization continuing after discharge for a

period of not more than one year—

* * * * *

(B) if such position was in the employ of a

private employer, such employer shall restore

such person to such position or to a position

of like seniority, status, and pay unless the em-

ployer’s circumstances have so changed as to

make it impossible or unreasonable to do so;

+ * * * *

(c) Any person who is restored to a position

in accordance with the provisions of paragraph

(A) or (B) of subsection (b) shall be consid-

ered as having been on furlough or leave of

absence during his period of training and serv-

ice in the land or naval forces, shall be so re-

stored without loss of seniority, shall be en-

titled to participate in insurance or other bene-

fits offered by the employer pursuant to estab-

lished rules and practices relating to employees

on furlough or leave of absence in effect with

the employer at the time such person was in-

ducted into such forees, and shall not be dis-

charged from such position without cause with-

in one year after such restoration.

——__—.»

4

2. The provisions of Section 9(c)(1) of the Selec-

tive Service Act df 1948, 62 Stat. 615 (renamed the

‘**Universal Military Training and Service Act” by

the Act of June 19, 1951, 65 Stat. 75), 50 U.S.C. App.

459, are identical with those of Section 8(¢) of the

Selective Training and Service Act, but Section 9(¢)

(2) of the 1948 Act further provides:

It is hereby declared to be the sense of the Con-

gress that any person who is restored to a posi-

tion in accordance with the provisions of para-

graph (A) or (B) of subsection (b) should be

so restored in such manner as to give him such

status in his employment as he would have en-

joyed if he had continued in such employment

continuously from the time of his entering the

armed forces until the time of his restoration

to such employment.

STATEMENT

1. Background. This case involves the application

of the re-employment provisions of the Selective

Training and Service Act of 1940 (now the Universal

Military Training and Service Act, 50 U.S.C. App. ’

459) to veterans, who, after resuming their civilian

employment, were discharged when technological ad-

vances caused the elimination of their jobs. The facts

are not in dispute.

Petitioners entered the employ of the respondent

railroad in 1941 and 1942, when they signed on as

“oilers” or “firemen” on the steam-operated tugboats

then maintained by the railroad in New York Har-

bor. Each petitioner's civilian employment with the

railroad was interrupted by military service during

5

the Second World War. After approximately three

years of wartime service, petitioners were honorably

discharged from the Armed Forces and were restored

to their former positions with the railroad.

Following petitioners’ re-employment, the railroad

replaced almost all of its steam tugboats with diesel

vessels. While the former required the services of

two men in the engine room (an engineer and a fire-

man), in the railroad’s view the diesel vessels needed

only an engineer. In 1959, the railroad’s decision to

abolish the position of “fireman-oiler’’ on their diesel

tugs led to a serious strike,* which was settled by a

collective bargaining agreement dated December 2,

1960, between various railroad companies (including

respondent) and the unions representing unlicensed

engine-room personnel (including petitioners).

No prior collective bargaining agreement covering

these employees contained provisions dealing with the

abolition of an entire class of employee. The agree-

ment in question makes no reference to, and contains

no provisions expressly dealing with, the rights of

veterans entitled to the benefit of the re-employment

provisions of the Act.

2. The controversy. As of December 31, 1960, each

petitioner lacked, by a matter of months, twenty years’

seniority with the railroad. Under the terms of the

December 2 agreement, such employees were dismissed

with a monetary separation allowance based upon the

* The background of this dispute is detailed in Baltimore &

Ohio R. Co., ete. vy. United Railroad Wkrs., 176 F. Supp. 58

(S.D.N.Y.), affirmed in part and reversed in part, 271 F. 2d

87 (C.A, 2), vacated and remanded, 364 U.S, 278.

6

number of months in which the employee had worked

at least one day for the railroad. In computing those

allowances, however, the railroad did not credit the

months petitioners spent in military service—on the

ground that during that period petitioners did not

“work one or more days” each month for the railroad.

It is stipulated that, as a result, each petitioner was

paid $1,242.60 less than the amount to which he would

have been entitled ‘“‘had [he] continued to render

compensated service to the [respondent] throughout

their respective periods of military service * * *.”’

Petitioners contended that the Selective Training

and Service Act of 1940 gave them the right to be

treated as having been continuously employed during

their time in military service for purposes of com-

puting their separation allowances. When the rail-

road declined to adjust their allowances accordingly,

they instituted this action in the district court.

3. The proceedings below. Both sides moved for

summary judgment. On April 28, 1964, the district

court rendered a decision in favor of the petitioners,

229 F. Supp. 193. The court ruled, in substance, that

(1) Section 8(b)(B) of the Act required veterans to

be restored to positions in their former civilian em-

ployment of ‘‘seniority, status, and pay’’ comparable

to those which they would have achieved had they

been continuously employed; (2) a ‘‘separation allow-

ance’’ falls within the concept of ‘‘seniority, status,

and pay’’; and (3) had petitioners been continuously

employed in their civilian jobs they would have been

entitled to separation allowances in the amounts they

claimed.

7

“With some doubts,’ the court of appeals reversed.

It recognized that “[i]f the separation allowances

granted to plaintiffs in 1960 come within the statutory

concepts of ‘seniority, status, and pay,’ plaintiffs are

entitled to be treated as if they had kept their posi-

tions continuously during World War II.” But the

court concluded that these allowances fall rather with-

in the class of “insurance or other benefits,’’ covered

by Section 8(¢) of the 1940 Act, That section, now

Section 9(¢)(1) of the Universal Military Training

and Service Act of 1951, provides that a veteran re-

stored to his former position:

* * * shall be entitled to participate in insur-

ance or other benefits offered by the employer

pursuant to established rules and practices re-

lating to employees on furlough or leave of

absence in effect with the employer at the time

such person was inducted into such forces * * *.

Since time spent on furlough or leave of absence was

not counted in determining an employee’s separation

allowance, the Second Circuit reasoned that military-

service time was also excludable.

REASONS FOR GRANTING THE WRIT

Under the relevant collective bargaining agreement,

petitioners are entitled to increased separation allow-

ances if, as they contend, the federal statute requires

that veterans be treated for that purpose as if they

were continuously employed during the period of their

military service. Petitioners are admittedly entitled

to nothing more if they are to be treated as having

been on “leave of absence” or “furlough.’”’ The issue

777-704—65——2

8

is one of substantial importance in the operation of

the protective provisions of the Universal Military

Training and Service Act of 1951. The ruling below,

we believe, is inconsistent with this Court’s decisions,

and there is a direct conflict among the circuits.

The court of appeals recognized that, under this

Court’s decisions, returning veterans are entitled to

have their time in the service treated as continuous

employment—rather than as time on leave of absence

or furlough—for purposes of determining seniority

and the benefits of “status’’ and “pay’’ which flow

from seniority. Here, there is no question that peti-

tioners’ co-employees have received full credit, for pur-

poses of separation allowances, for any month in

which they worked at their civilian jobs for as little

as one day. Nonetheless, the court below has con-

cluded that petitioners may not receive comparable

benefits based upon the period that their employment

by the railroad was precluded by military service. It

has reached this result by drawing a distinction be-

tween basic benefits (as to which the veteran is to be

treated as if he were continuously employed) and

‘‘fringe’’ benefits (as to which he is to be treated

as if he were on leave of absence).

We submit that no such distinction was contem-

plated by the federal statutes—that a veteran’s time

in military service must be considered for seniority

purposes regardless of the nature of the benefit flow-

ing from seniority. The ruling below is of sub-

stantial importance not only because technological ad-

vances have occasioned a serious and immediate prob-

lem as to the proper determination of separation

9

allowances but also because it will deprive veterans

of other ‘‘fringe’’ benefits keyed to seniority. .

1, The Second Circuit correctly acknowledged that

“if the separation allowances granted to [petitioners]

in 1960 come within the statutory concepts of ‘senior-

ity, status, and pay,’ [petitioners] are entitled to be

treated as if they had kept their positions continously

during World War II.”’ 341 F. 2d at 74. Only iwa

terms ago, this Court held in Tilton v. Missouri Pa-

cific R. Co., 376 U.S. 169, and Brooks v. Missouri

Pacific R. Co., 376 U.S. 182, that for purposes of de-

termining seniority status and the benefits which flow

from it, veterans are to be treated as if they were

continuously employed during the period of their ab-

sence. In so holding, the Court reaffirmed its prior

decision in Diehl v. Lehigh Valley R. Co., 348 U.S.

960, where it had reversed a Third Circuit decision

holding that the veterans’ seniority rights were

limited to those which would be enjoyed by a non-

veteran who had been on furlough or leave of absence

during the time the veteran was in military service.

“The principle underlying this legislation is that he

who is ‘called to the colors [is] not to be penalized on

his return by reason of his absence from his civilian

job.’”? Tilton v. Missourt Pacific R. Co., 376 U.S.

at 170-171, quoting from Fishgold v. Sullivan Dry-

dock & Repatr Corporation, 328 U.S. 275, 284.

Thus, as the court below noted, if petitioners’ posi-

tion on the seniority roster, or right to an advanced

position or rate of pay, depended upon the number of

months in which they had worked one day, they would

be entitled to be treated as if each had been continu-

10

ously employed. during his period of military service.

Where such benefits are dependent solely upon the

time an employee is present on the job (and not upon

the increased proficiency which comes from experi-

ence and training on the job), the veteran is to be

accorded the benefits enjoyed by one continuously em-

ployed. This is the holding of Tilton, Brooks, and

Diehl, supra, as to position on the seniority roster; of

McKinney v. Missouri-Kansas-Texas R. Co., 357 US.

265, as to the right to advanced position; and of Moe

v. Eastern Air Lines, 246 F. 2d 215 (C.A. 5), and

Borges v. Art Steel Co., 246 F. 2d 735 (C.A. 2), as

to rate of pay.

We know of no basis for distinguishing among the

various advantages that may flow from seniority

alone, whether they relate to pay, position, vacation

rights, job security or separation allowances. To be

sure, if the veteran’s right to any of these advantages

is dependent upon something more than seniority—

i.e., if the claimed benefits are the consideration for

work a veteran has not performed, or for experience

he has not acquired—the veteran cannot claim them.

But where the veteran’s right to any of these benefits

depends solely upon length of service, the veteran is

entitled to be treated as if he had been continuously

employed during the military service.’ In particular,

’This distinction is at the heart of several decisions of the

Second Circuit denying veterans particular vacation benefits,

although that Circuit has at times talked as if vacation rights

were wholly outside the statutorily protected benefits o “senior-

ity, status, and pay.” Siaskiewicz v. General Electric Co., 166 F.

9d 463 (C.A. 2); Dwyer v. Crosby Co., 167 F. 2d 567 (C.A.

2); Alvado v. General Motors Corporation, 229 F. 2d 408 (C.A.

—_

1]

no meaningful distinction can be drawn between. the

right to be paid separation allowances in the present

case and the right to wage-rate increases, similarly

based upon seniority, which were involved in Moe and

Borges. Both were strictly conditioned on length of

service; neither constituted payment for work actu-

ally done or for experience gained.

2. The court below apparently believed that a dif-

ferent conclusion was dictated by the language of Sec-

tion 8(c) of the 1940 Act (now Section 9(e)(1) of

the 1951 Act, 50 U.S.C. App. 459(c)(1)), which

provides:

(c) Any person who is restored to a posi-

tion in accordance with the provisions of para-

graph- (A) or (B) of subsection (b) shall be

considered as having been on furlough or leave

of absence during his period of training and

service in the land or naval forces, shall be so

restored without loss of senority, shall be en-

titled to participate in insurance or other bene-

fits offered by the employer pursuant to

established rules and practices relating to em-

ployees on furlough or leave of absence in

effect with the employer at the time such per-

son was inducted into such forces, and shall not

be discharged from such position without cause

within one year after such restoration.

The court viewed the statutory scheme as creating a

dichotomy between “insurance or other benefits” (as

2), certiorari denied, 351 U.S. 988. Where length of vacations is

strictly dependent on years of service, i.e., seniority, the Act

plainly permits a re-employed veteran to include his service

time in determining vacation rights. Mentzel v. Diamond, 167

F. 2d 299 (C.A. 3).

12

to which the returned veteran was to be treated only

as if he had been ‘‘on furlough or leave of absence”)

and the concept of ‘“‘seniority; status, and pay’’ (as to

which the veteran was entitled to enjoy all the benefits

of one who had been continuously employed). The

Second Circuit concluded “[w]ith some doubts * * *

that the separation allowances in the present case are

properly ‘other benefits’ rather than includible within

‘seniority, status, and pay,’”? because they were

neither “pay for work actually done,” nor “a regular

part of plaintiff’s earnings,” nor “a traditional per-

quisite of seniority.” App., infra, p. 21. The Sixth

Circuit has reached a directly contrary conclusion,

treating severance allowances as ‘“‘pay’’ for purposes

of 50 U.S.C. App. 459, the present re-enactment

of the statute here in issue. Hire v. FE. I. DuPont

de Nemours & Co., 324 F. 2d 546, 550.

In our view, the legisiative history shows that

Congress never intended any such division between

ordinary and extraordinary, or between basic and

incidental, benefits of seniority. The “insurance or

other benefits’? language of Section 8(c) serves a dis-

crete function. It was added to make certain that

veterans would enjoy, during thetr absence in military

service, all those benefits accorded to other employees

on leave of absence. It was not intended to limit a

veteran’s rights upon his return to civilian employ-

ment.

The original form of Section 8(¢) provided only

for the veteran’s rights on his return from military

service. It stated (86 Cong. Rec. 10790) :

| 13

Any person who is restored to a position in

accordance with paragraphs (A) or (B) of

subsection (b) shall be so restored without loss

of seniority, insurance participation or bene-

fits, or other benefits, and such person shall not

be discharged without cause within one year

after such restoration.

This. language was amended, without substantial de-

bate, for the apparent purpose of adding a guarantee

that any benefits accruing to employees absent on

other forms of leave should also be enjoyed by the

veteran while he was absent in military service. In

the words of the amendment, the veteran was to “be

entitled to participate in insurance or other benefits

offered by the employer pursuant to established rules

and practices relating to employees on furlough or

leave of absence in effect with the employer at the

time such person was inducted into [the military]

forces.”

Senator Sheppard, Chairman of the Senate Com-

mittee which reported the bill, explained (86 Cong.

Ree. 10914) :

That amendment would make certain that all

trainees would receive the same insurance and

other benefits as those who are on furlough or

leave of absence in private life. It seems to me

to be a good suggestion.

Congressman May, Chairman of the House Committee

on Military Affairs, introduced the same amendment

in the House, where he explained (86 Cong. Ree.

11702) :

Mr. Miter. In reference to insurance, will

that apply to group insurance? Many in-

; a

14

dustrial plants, of course, carry group insur-

ance. Under those contracts they continue their

participation while a man is on vacation or

furlough. Would they continue those. policies

in force?

Mr. May. This would continue them in force

and that is the very purpose of the legislation.

In short, the veteran was to be treated as ‘‘on fur-

lough or leave of absence’’ only for the purpose of

assuring him the enjoyment of certain benefits accruing

during his absence—.e., the benefits offered by the

employer to other employees on furlough gr leave of

absence pursuant to provisions in effect at the time

the veteran was inducted. It is hardly necessary to

add that this Court has long since made it clear that

Section 8(c)’s direction that a veteran ‘‘be considered

as having been on furlough or leave of absence’’ does

not limit the veteran’s seniority rights, on his return

from service, to those which would be enjoyed by a

furloughed employee. Diehl v. Lehigh Valley R. Co.,

348 U.S. 960, reversing 211 F. 2d 95 (C.A. 3); Tilton

v. Missouri Pacific R. Co., supra; Brooks v. Missouri

Pacific R. Co., supra.‘

3. Technological displacement of employees has be-

come a major problem of the economy. The decision

below will adversely affect a substantial number of

veterans in industries where the steady advances of

automation are lowering manpower requirements.

* We recognize that, with regard to separation allowances, the

Ninth Circuit reached a contrary conclusion seventeen years ago

- in Seattle Star v. Randolph, 168 F. 2d 274. But that decision

preceded, and its rationale in no way veflects, the controlling

decisions of this Court which have been handed down in the

intervening years.

—

15

The present case bears significantly upon the sedpe

of the separation rights granted by federal statutes

to the extremely large number of employees who have

served in the military service since 1940, as well as

to the many men still being called into the military

service.

Indeed, this decision already has affected the ad-

ministration of the award made in the recent arbitra-

tion of the nationwide dispute relating to the size of

railroad crews. Under the terms of that award, many

“‘firemen’s’’ positions are abolished and a significant

number of persons will be discharged. The railroads

initially acquiesced in the view that the statute (as

applied to the award) required the military service of

veterans to be treated as “continuous employment”’

for purposes of computing their separation allow-

ances. Since the decision below was jianded down, at

least five major railroads have refused to continue

making settlements on this basis.

Moreover, the decision below has implications which

go beyond the matter of separation allowances. As

already observed, the court of appeals has created an

exception to the statutory protections recognized in

this Court’s decisions. Its holding is that a veteran

need only be treated as ‘continuously employed”’ for

the purposes of determining the “basic” rights of

‘‘seniority,” ‘‘status,’’ and ‘‘pay”; he need not be so

treated for the purpose of determining his right to

“fringe”’ benefits under collective bargaining agree-

ments. Thus, the decision will also inevitably affect

veterans’ claims to other benefits which are common

subjects under labor agreements and are normally

16

contingent on length of employment, e.g., layoff bene-

fits, pensions, vacation privileges, and the like.

CONCLUSION

For the foregoing reasons, it is respectfully sub-

mitted that the petition for a writ of certiorari should

be granted.

Respectfully submitted.

ARCHIBALD Cox,

Solicitor General.

JOHN W. DovG.as,

Assistant Attorney General.

ALAN S. ROSENTHAL,

Ricuarp 8S. SALzMAN,

Attorneys.

APPENDIX

UNITED STATES COURT OF APPEALS FOR THE SECOND

CIRCUIT

No. 153—September Term, 1964

(Argued November 12, 1964 Decided January 25,

1965)

Docket No. 29022

PasguaLeE J. Accarpi, Jacosn GRuBesick, ALFRED J.

SEEvVERS, ANTHONY J. VassaLLo, ABRAHAM S. Horr-

MAN, AND FRANK D. PRYOR, PLAINTIFFS-APPELLEES

v.

THE PENNSYLVANIA RarLroap CoMPANY, DEFENDANT-

APPELLANT

Before: Lumparp, Chief Judge, Swan and Warer-

MAN, Circuit Judges.

Appeal from judgment of the United States Dis-

trict Court for the Southern District of New York,

Metzner, J., 229 F. Supp. 193, granting claims by

veterans against their former employer for sums

allegedly due them under 50 U.S.C. App. § 308 (1946).

Reversed.

WATERMAN, Circuit Judge:

Plaintiffs, veterans of World War II, brought suit

in the United States District Court for the Southern

District of New York. They claimed that defendant,

(17)

18

their former employer, had denied them that portion

of a separation allowance, granted in 1960, to which

they were entitled under Section 8 of the Selective

Training and Service Act of 1940, 50 U.S.C. App.

§ 308 (1946). Upon cross motions for summary judg-

ment, Judge Metzner awarded the sums claimed by

plaintiffs. His opinion is reported at 229 F. Supp.

193.

Defendant has appealed, arguing that the provision

of Section 8 relied on by plaintiffs does not apply

either to separation allowances or to benefits granted

more than one year after an employee’s return to

work from military service. We reverse the district

court on the applicability of Section 8 to separation

allowances, and therefore we do not reach defendant's

alternative ground for reversal. Nor need we discuss

defendant’s additional contention on appeal that the

district court improperly computed the interest owing

on the judgment awarded to plaintiffs.

The relevant facts in this case are stipulated.

Plaintiffs first entered the employ of defendant in

1941 and 1942 as firemen on tugboats in New York

harbor. They left their jobs during World War IT

to serve in the armed forces, but at the close of the

war they were reinstated in their former positions.

Thereafter, they worked continuously as tugboat fire-

men for defendant until 1960. In Deeember of that

year, defendant and the union which represented

plaintiffs reached an agreement designed to settle a

bitter dispute over reduction of work forces in con-

Yr .

nection with the transition from steam-powered to

diesel-driven tugs. The contract abolished the job of

fireman on the diesel tugs but awarded the displaced

employees separation allowances that varied in

amount according to each employee's “‘length of com-

pensated service.’’ Plaintiffs were permanently

separated from defendant’s employ pursuant to the

contract, and, in computing their separation allow-

ances, defendant credited them only with time ae-

tually spent in its employ for which they received

wages.

This suit arises out of plaintiffs’ claim that defend-

ant should have included their vears in the armed

forces in ealeulating the separation allowances.

Plaintiffs do not contend that the phrase “e¢ompen-

sated service” was intended by defendant and_ the

union to encompass military service. Rather, they

argue that Section 8 of the Act requires that they be

credited with their years in the armed forces, regard-

less of the intent of the parties to the agreement.

Piaintiffs are correct in assuming that “no practice

of employers or agreements between employers and

unions can cut dewn the service adjustment benefits

which Congress has secured the veteran under the

Act.” Fishgold yv. Sullivan Drydock & Repair Corp.,

328 U.S. 275, 285 (1946). The ‘problem presented

by this case is that of whether the statute dictates

that military service should have been included in

‘compensated service,” irrespective of the intent of

union and employer in choosing that language.

Section 8(b)(B) of the Act requires that a private

employer restore a returning veteran “to [his for-

20

mer] position or to a position of like seniority, status,

and pay * * *”’ Section 8(c) further provides:

Any person who is restored to a position in

accordance with the provisiens of para-

graph * * * (B) of subsection (b) shall be

considered as having been on furlough or leave

of absence during his period of training and

service in the land or naval forces, shall be so

restored without loss of seniority, shall be en-

titled to participate in insurance or other bene-

fits offered by the employer pursuant to estab-

lished rules and practices relating to employees

on furlough or leave of absence in effect with

the employer at the time such person was in-

ducted into such forces, and shall not be dis-

charged from such position without cause

within one year after such restoration.

If the separation allowances granted to plaintiffs in

1960 come within the statutory concepts of ‘‘seniority,

status, and pay,’’ plaintiffs are entitled to be treated

as if they had kept their position continuously during

World War II. Fishgold v. Sullivan Drydocks &

Repair Corp., supra, at 284-85. On the other hand,

if the allowances constituted ‘‘insurance or other

benefits,”’ plaintiffs are not entitled to be credited with

their years in the armed forces, for with certain im-

material exceptions, the agreement between defendan‘

and the union did not treat time spent by employees

‘fon furlough or leave of absence’ as ‘‘compensated

service.”’

There are no decisions in this cireuit or in the Su-

preme Court determining whether separation allow-

ances are included within the categories of “seniority,

status, and pay’’ or of ‘‘insuranee or other benefits.”’

However, in Borges v. Art Steel Co., 246 F. 2d 735, 738

(2 Cir. 1957), we drew the line between the two cate-

gories as follows:

——————

21

While the problem of construction is difficult,

it seems most likely that the expression “‘insur.

no sense fringe benefits, but became a regular part of

the jobholder’s pay or status, swelling his pay check

every week he worked in the future * * *” Id. at

Elec. Co., 166 F. 24 463, 465-66 (2 Cir. 1948), we de--

cided that ‘‘since vacation rights are not pay unless

they are for work actually done, and since they are

not merely a perquisite of seniority, they must fall

under the heading of ‘other benefits,’ ”? Accord, Al-

vado v. General Motors Corp., 229 F. 24 408, 410-11

(2. Cir. 1956), cert. denied, 351 U.S. 983; Dwyer v.

Crosby Co., 167 F. 2d 567 (2 Cir. 1948).

With some doubts, we hold that the separation al-

lowances in the present case are properly ‘‘other

benefits” rather than ineludable within “seniority,

status, and pay.’’ Unlike the wage increases in

Borges, they did not become a regular part of plain-

tiffs’ earnings, and, like the vacation rights in Siaskie-

wicz, they were neither pay for work actually done

nor a traditional perquisite of seniority. On the con-

trary, they seemingly constituted only a miscellaneous

benefit, devised ad hoc after intensive collective bar-

gaining in order to serve a transitory purpose. We

are confirmed in this conclusion by the decisions of two

other Courts of Appeals. Hire v. FE. I. du Pont de

Nemours & Co., 324 F. 2d 546, 549-50 (6 Cir. 1963) ;

Seattle Star, Ine. y. Randolph, 168 F. 2d 274 (9 Cir.

22

1948). There are no appellate decisions to the

contrary.

Reversed.

UNITED STATES COURT OF APPEALS FOR THE SECOND

CIRCUIT

At a Stated ‘Term of the United States Court of

Appeals, in and for the Second Circuit, held at the

United States Courthouse in the City of New York,

on the twenty-fifth day of January one thousand nine

hundred and sixty-five.

Present: Hon. J. Edward Lumbard, Chief Judge;

Hon. Thomas W. Swan; Hon. Sterry R. Waterman,

Circuit Judges.

PasquaLE J. AccarDi, JACOB GRUBESICK, ALFRED J.

SEEVERS, ANTHONY J. VASSALLO, ABRAHAM S. Horr-

MAN, FRANK D. PRYOR, PLAINTIFFS-APPELLEES

Vv.

THE PENNSYLVANIA RAILROAD COMPANY,

DEFENDANT-APPELLANT

Appeal from the United States District Court for

the Southern District of New York.

This cause came on to be heard on the transcript

of record from the United States District Court for

the Southern District of New York, and was argued

by counsel.

ON CONSIDERATIQN WHEREOF, it is now hereby or-

dered, adjudged, and decreed that the judgment of

said District Court be and it hereby is reversed.

A. Dante, Fvusaro, Clerk.

U.S. GOVERNMENT PRINTING OFFICE: 1968