Coffy v. Republic Steel Corp., 447 U.S. 191 (1980)

Coffy v. Republic Steel Corp.

No. 79-81

Argued February 27, 1980
Decided June 10, 1980
447 U.S. 191

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

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

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

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

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

590 F.2d 334, reversed and remanded. MARSHALL, J., delivered the opinion for a unanimous Court.