ACCARDI v. PENNSYLVANIA R. CO.

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Argument of Richard A. Posner

Justice Hugo L. Black: Number 280, Pasquale J. Accardi and others against the Pennsylvania Railroad Company.

Mr. Posner.

Unknown Speaker: May it please the Court.

I should like to move the admission of Richard A. Posner of the New York Bar for purposes of arguing this case on the petitioner's behalf.

Justice Hugo L. Black: Motion is granted.

Mr. Richard A. Posner: Mr. Justice Black, may it please the Court.

This is an action by six veterans of World War II against their former employer, the Pennsylvania Railroad to enforce claims based on the Section 8, the Selective Training and Service Act of 1940.

The Act provides for the representation of such claimants by the Department of Justice.

Petitioners prevailed in the District Court.

But the Court of Appeals for the Second Circuit reversed cases here on certiorari.

The facts were stipulated and may be briefly summarized.

Petitioners were hired in 1941 and 1942 as firemen on tugboats operated by the Railroad in New York Harbor.

Shortly after being hired, they left to enter military service in World War II and after serving for about three years, were honorably discharged.

The railroad as required in Section 8 (b) of the Act, restored petitioners to their old jobs as firemen.

In 1959, the job of firemen or as sometimes called oilier on all for the railroads diesel tugboats in New York Harbor was abolished on the ground that diesel tugboats don't need a fireman.

And this action of the railroad precipitated a major strike.

The strike was settled by an agreement between the railroad and the union representing its employees which provided among other things for separation allowances.

That is severance pay to be given those employees like petitioners whose jobs were abolished.

Now, the amount of these separation allowances was measured by the number of months of the employees compensated service for the railroad.

Compensated service, being a term defined in this fashion, a month of compensated service was any month in which the employee had worked at least one day for the railroad.

And a year of compensated service was 12 such months or a major portion thereof, seven months.

These petitioners, these veterans, of course, had not been able to work one day of month during their three years in military service in World War II.

And the railroad decided that their period of military service should not be counted as compensated service for purpose of computing the amount of the separation allowances to which they were entitled.

And the result was that each of these petitioners received some $1200 less in separation allowances than he would have received had his military service been counted or in other words had his civilian employment with the railroad never been interrupted by military service.

Justice John M. Harlan: Wasn't there another option that the court could put bargaining agreement gave these people?

Mr. Richard A. Posner: Well, employees –-

Justice John M. Harlan: Stay on and they have 20 years to stay on that the job?

Mr. Richard A. Posner: Employees who had 20 years seniority, seniority being measured from first being hired by the railroad were given an election.

Petitioner Accardi was the only one of the six veterans who qualified who have the 20 years.

He is the only one could elect and he elected instead to take these -- to take his separation allowance.

Now, Section 8 (c) of the Selective Training and Service Act requires that any veteran who is restored to his former civilian employment, as Section 8 (b) requires and as was done here, shall be restored without loss of seniority.

And the only issue in this case is whether these petitioners were denied seniority in being refused separation allowances in an amount equal to what they would have received had their military service, had their civilian employment not been interrupted.

This issue in turn ends on how two questions were answered.

The first is whether the measure of the separation allowances, what the contract between the union and the railroad calls length of compensated service was seniority in the statuary sense.

And the second question is, if so, are these allowances accorded on the basis of seniority the kind of benefits which the Act means to protect for the veteran?

And the first of these questions requires us to examine the concept of seniority as it's used in the Act.

And I think we can usefully approach this by asking why Congress should have selected seniority as a standard of the veterans' reemployment rights.

It's clear I think what the basic impulse behind these veterans legislation is.

It's the feeling that veterans should not be penalized in their civilian employment careers, by reason of having been called into the armed services in an hour of the country's great need.

On the other hand, if this thought, this desire for equality were carried to its logical extreme, the results would be rather disruptive and impractical.

Because if one really wants to fully equalize the employments status of a veteran and of a nonveteran, that would mean, for example, compiling the employer to make up the difference in pay scales between the armed forces and the civilian employment.

Or it might require compelling an employer to attribute to a veteran a skill or qualification that he might have received had he not been inducted into the armed forces but that he didn't receive.

In other words, there are difficult questions in social policy involved in -- if one is to go so far as to require an employer to pay a veteran for work he didn't do or for a skill he didn't attain, although he would have.

On the other hand, as Congress well knew, at least in those industries where collective bargaining with independent unions is the prevailing mode of regulating industrial relations, many of the perquisites of employment, promotions of various sorts, wage increases, vacation rights, retirement rights, order of lay-off and recall, are made to flow automatically from the length of the employee's service with the employer.

And these benefits or perquisites are not intended to compensate an employee for the work he's done or as an incentive better work in the future.

And if you require just these benefits, benefits which are accorded mechanically, automatically on a basis of time served to a veteran as if he had never been inducted, you don't have any of these disruptive effects on the employer's managerial discretion.

And we submit that in making seniority the statutory test to these veterans' employment rights, Congress meant to protect for the veteran this entire range of benefits which are conferred on the basis of how long you've been on the job.

And don't have any implication of the reward for the value the employee's contribution or for the skill of his work.

And if this is the proper test, then clearly, the veterans in this case were improperly denied separate -- the full separation allowances to which they were entitled because the measure used in this agreement defined the amount of separation allowances.

What the parties called length of compensated service was in all practical respects a measure based on time of the employee in the railroads employ and it had nothing to do with attempting to compensate employees for their particular contributions to the railroad's business or for the skills they had attained or anything of that sort.

Justice John M. Harlan: If the collective bargaining agreement was giving them a lump sum which is less and what they would've earned have they been working during -- that they would have received a period of service, you wouldn't quarrel with that?

Mr. Richard A. Posner: No.

There is no requirement that -- if I understand your question correctly that the employer pay any amount in lieu of wages for the period when the veteran was in the service.

He didn't work for the employer he is not entitled to any wages.

Now, these separation allowances are not a -- they're not an end of employment bonus or additional wage compensation, they're a method of a tiding over the employee in readjusting to another job to his lost of this job.

Justice Hugo L. Black: They're to compensate the lost wages, aren't they?

Mr. Richard A. Posner: They are to compensate for lost future wages.

Justice Hugo L. Black: Is that's for the future?

Mr. Richard A. Posner: Yes, they are in essence an exchange for giving up your job rights for what you're going to do in the future.

And they were provided here on a basis simply, in all practical sense, simply on how long you happen to have been around the job.

An employee who started work the same day as these veterans in 1941 or 1942 and who worked, he may have worked very sporadically over 20 years but nevertheless managed to put in at least one day a month, he would be entitled to a far larger separation allowance than a veteran who worked steadily.

All of the 17 years he was on the job but of course during the three years of his military service couldn't render this nominal service of one day a month.

And this kind of inequity, this arbitrary, a distinction and treatment between veterans and nonveterans, we think, is just the kind of inequity that the statute was meant to prevent.

Because from the employer standpoint, he can treat the veteran and the nonveteran alike in terms of these separation allowances without being involved in problems of paying compensation for work that that wasn't done.

I might say that on this first point, the court below was in agreement with the Government's position, although the respondent has taken vigorous issue with it.

The court agreed that these separation allowances were measured by seniority by length of service within the meaning of the statutory term.

What troubled the court was, some additional language in Section 8 (c) which in the court's view carve out a set of benefits as to which the veteran and doesn't have the right to be treated the same as his co-workers who were not inducted.

This language which is set out on page 3 our brief is the first and third clauses of 8 (c), where it says that any person who is restored to a position as required by the Act shall be considered as having been on furlough or leave of absence during his period of training and service and shall be entitled to participate in insurance or other benefits offered by the employer pursuant to the established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such a person was inducted into the armed forces.

Now, what the court below felt was that there is a -- there is this category of insurance or other benefits which the court felt included these separation allowances as to which you treat the restored veteran, as if he had been on a leave of absence rather than as if he had been working during his period in service.

Now, we read this language in 8 (c), these leave of absence benefits created in the statute, rather differently.

This language on which the court relied was added, as we explain more fully in our brief, as an amendment to the basic bill which had created these veteran reemployment rights based on seniority.

And the purpose of this additional language was not to curtail or qualify those rights, carve out an exception for some seniority rights, but to create additional rights, and specifically as the legislative history indicates, the intent was to protect the continued participation by inducted employees in group insurance plans which employers set up with their employees.

Now, under these group insurance plans, the plan would continue in effect, continue to protect an employee even if happen to be laid off or take a leave of absence.

And what Congress desired was that when a man was called into the armed forces he should be treated no worse in terms to these insurance programs than his co-workers who might be on leave of absence.

Justice William J. Brennan: Well, does that mean Mr. Posner that other benefits takes a connotation of insurance, things like insurance?

Mr. Richard A. Posner: Well, I think Congress had in mind, group insurance plans.

I think the language is broad enough to embrace any benefit which employers extend to their furloughed employees.

It seems to me, if -- another example doesn't come to mind but whatever benefits at the time these people were called into the service, the railroad had in effect four furloughed employees, would continue to accrue in favor of these inducted men.

They wouldn't lose the benefit of this merely by being inducted, and if -- so that what we're talking about here is benefits of the pre-restoration stage in the employee's career.

While he's in the service, he's entitled to these 8 (c) leave of absence benefits.

When he's restored to his civilian employment, he then becomes entitled to all benefits perquisites of seniority which may accrue.

Here, these separation allowances were first created in 1960 long after these veterans returned from the service and were available to employees in the service of the company.

Justice William J. Brennan: Well, I suppose for example a furloughed employee you suggest were entitled vacation pay, were there some such arrangement as that while they were in service, they'd get vacation pay?

Mr. Richard A. Posner: I can't imagine that -- I suppose it's possible, it seems to me, very unlikely that employers would provide vacation pay for workers who were laid off --

Justice William J. Brennan: My difficulty is knowing what other benefits, insurance you suggest.

This means keeping alive their participation on a group insurance program.

Mr. Richard A. Posner: Yes.

Justice Abe Fortas: Suppose --

Justice William J. Brennan: I think that's easier, but don't quite see what other benefits --

Justice Abe Fortas: Suppose it was profit sharing and the company's plan provided that an employee even though he's on a leave for the whole year of part of the year is entitled to share pro rata and the distribution of profits according to the whenever a formulas provided.

I suppose Mr. Justice Brennan's question would present the issue of whether a returning veteran would then claim that distribution of his few share of the profits?

Mr. Richard A. Posner: Well, I think he would, again the example -- it strikes me as unlikely that the employer would make this kind of provision for employees who weren't actually rendering service.

But if the employer decides that furloughed employees are entitled to a continuing share in the profits, it seems entirely fair and inconsonance with the benevolent purposes of this legislation that a person involuntarily furlough because he was called into armed forces should be entitled to the same profit sharing or other benefits as a man, an employee, who likewise is not actually rendering service because he's on furlough.

And even if there is some plausibility to the instruction placed on this insurance or other benefits clause by the Court of Appeals, it seems to us -- the result, it seems to us, anomalous and wholly inconsistent with the objectives of this legislation.

If what was at stake here was not severance pay at all but a one set now or wage increase, there's no question but that veterans assuming the wage increase was key to seniority, veterans would be entitled to be treated as if they'd never been inducted.

What is in fact at stake here is something far greater than a once in an hour wage increase.

These separation allowances, in some cases, are the equivalent of a full year's wages.

And not only are they substantial in character, but realistically what these wages are, are a quid pro quo for the surrender of seniority rights and benefits.

The clearest case is petitioner Accardi's.

Because of his 20 years seniority he had a right, a right based on seniority to continue in the employ of the railroads.

And he surrendered this right to seniority in exchange for this lump sum payment.

And if the seniority -- the 20 years seniority which he gave up was a right protected by the Act, so also we think should be the lump sum which took the place of that seniority right.

Justice William J. Brennan: Well, may I ask Mr. Posner let's see in -- actually what happened here?

Accardi did get some severance pay, did he?

Mr. Richard A. Posner: Yes, he got 17 years.

Justice William J. Brennan: 17 years --

Mr. Richard A. Posner: Worth of --

Justice William J. Brennan: -- and that's not giving him any credit for his time at service, is that it?

Mr. Richard A. Posner: That's correct.

Justice William J. Brennan: And if that by credit he would get 20 years on the basis of 20 years.

Mr. Richard A. Posner: Yes.

Justice William J. Brennan: How much difference would it make in dollars?

Mr. Richard A. Posner: $1200.

Justice William J. Brennan: $1200?

Mr. Richard A. Posner: And on the basis of 20 years of compensated service, the employee was entitled to 50 weeks pay which is almost to full year's wages.

Justice Byron R. White: Well, Mr. Posner could the employer in -- have said I'm going to give this separation pay based only to those people who have worked 3/4 of the days during the month?

Mr. Richard A. Posner: No.

I don't think that would change the case at all although our case underlines the arbitrariness of the result but --

Justice Byron R. White: And the employer would just disentitle to limit separation pay to those who had worked, actually worked?

Mr. Richard A. Posner: If the separation pay is designed not to reward an employee for particular services or contribution to the company, but it is designed to follow automatically from length of service, then he must treat the --

Justice Byron R. White: You say disentitled to make it follow the length of work?

Mr. Richard A. Posner: That's correct.

That is the Tilton case which this Court decided unanimously in the veteran's favor just two terms ago.

The facts there were that in order to be entitled to promotion from apprenticeship to journeyman status that you had to spend 1000 days as an apprentice and you actually had to be on the job as an apprentice for those thousand days.

The veteran had served several hundred of these days before World War II and had been called into service and had returned and finished the balance of the thousand days.

And the Court said, that his seniority as a journeyman in his new position had to be backdated so that -- so as to treat him just as if he had completed this apprenticeship during his military service, and although actual service on the job was the requirement for the promotion, the veteran had to be treated as if he had rendered such service during the period of military service.

Argument of Edward F. Butler

Mr. Edward F. Butler: Mr. Justice Black, may it please the Court.

I think I should underline that the real issue here is whether or not there is anything in the provisions of the Selective Service Act, specifically provisions in the Section 8 (c) which should be read to override the plain provisions of a collective bargaining agreement that was freely negotiated and freely arrived at by the employer and the union representing the employees.

And I think, to see this issue in its proper setting it would be helpful if I make a somewhat in large statement of the facts gave a somewhat greater interpretation of the agreement than has thus far been placed before the Court.

As the Court has been informed, when these petitioners went in the military service back in 1943, there were no provisions in the collective bargaining agreement for separation pay.

Separation pay was a thing unheard of so far as the railroad was concerned in any of its collective bargaining agreements.

And that was so for many years after these veterans were restored, and when they were restored after their completion of their military service, they were restored with seniority date which in every way complied with the provisions of the Selective Training and Service Act of Section 8 (c).

That is included -- stipulated in the stipulation which is in the record before the Court.

Now, these petitioners had no antecedent rights to separation allowances.

We come now down to 15 years later, in the year 1959, and at that time a labor dispute arose between not only the Pennsylvania Railroad, but seven other railroads who operate railroad tugs in New York Harbor.

Between them and the employees who perform the duties of the job classification known as oilers on those tugs.

And this dispute precipitated a strike.

It was a strike that tied up the movement of the rail freight and the harbor of the City of New York for some time.

It eventually resulted in litigation which finally reached this Court.

And ultimately, after these many months of turmoil, the parties got together and they solved their differences.

This agreement that they made was a two-pronged agreement.

First, it provided that all employees in the oilers classification who had seniority of 20 years or more could stay on the job.

And in computing seniority, full credit was given to the time of the veterans in military service.

When it came to measuring the quantum of the separation allowance, here the parties bargained for a separation allowance based on a measuring run of length of compensated service and this length of compensated service by its definition excluded the period of time that these petitioners spent in military service.

And also, another very vital point, excluded the time of any other employees who were on furlough during the course of their employment for any other nonmilitary reason and there were many of those.

Justice Abe Fortas: You mean that there was an explicit exclusion of people in the category of these petitioners?

Mr. Edward F. Butler: I do not mean there was an explicit exclusion, sir.

I mean that the definition of the term length of compensated service and the mechanics which the agreement called forth to spell it out made it perfectly evident that people who had not been on the job and earning pay were not qualified for the period of time that that was so.

Justice William J. Brennan: Mr. Butler, does that definition appear on the record?

I see the agreement here --

Mr. Edward F. Butler: The agreement is in the record in full --

Justice William J. Brennan: Yes --

Mr. Edward F. Butler: Mr. Justice Brennan.

Justice William J. Brennan: -- I just wondered whether the -- you could refer me to the definition itself of compensated service.

Mr. Edward F. Butler: I don't believe there is any specific definition of compensated service as such.

Justice William J. Brennan: Oh I see.

Mr. Edward F. Butler: Except that in the note on page 10 underneath the column or tabulation, the agreement states, a month of compensated service is any month and which the employee worked one or more days.

So in that sense, there is an explicit definition that in order to qualify under the term 'compensated service' you have to work on the job.

Justice Byron R. White: Of course the Government's position, as I understood Mr. Posner, is that you can argue this case even though there was a specific and expressed attempt to exclude this category of the person.

The Government says that the employer just absolutely disentitled to exclude the kind of person that it involved here, one that was off in service.

Mr. Edward F. Butler: I think that is the Government's position Mr. Justice White and we think it's an entirely unjustified position and that there is nothing in Section 8 (c) or the Selective Service Act that requires this.

Justice Byron R. White: You think Tilton controls that question?

Mr. Edward F. Butler: Sir?

Justice Byron R. White: You think Tilton controls that question?

Mr. Edward F. Butler: No.

No.

Justice Byron R. White: In Tilton, at least, the petitioners came back there and completed the work.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: They came back to have completed their service as in the credit and then their seniority was dated back.

Mr. Edward F. Butler: I don't think Tilton controls it, because Tilton involved the question of seniority and what privileges were to pertain to seniority.

Justice Byron R. White: But there was the question of an advancing from an apprentice to a permanent position and you had to do those for a certain period of apprenticeship before you became permanent.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: And then when they came back to service, they should leave the apprenticeship.

Mr. Edward F. Butler: That is right, sir.

Justice Byron R. White: From what date did their permanent status --

Mr. Edward F. Butler: This Court held that it had to be dated back.

But that case, as I say, involved --

Justice Byron R. White: But that case didn't hold that if they hadn't have done the work, they were entitled to a permanent --

Mr. Edward F. Butler: By no means.

By no means and I think that the McKinney case by pointing out that where job benefits are not automatically tied to seniority, then a veteran does not become entitle to them under the previsions of Section 8 (c) is also of considerable relevance to this case.

But more than any other previous precedent in this Court which is, we respectfully submit important, are the precedents of the Aeronautical Lodge against Campbell and Trailmobile against Whirls.

Because those were cases decided a number of years ago in which this Court held that under situations where veterans had already vested rates after being restored to employment, that those rights could be divested by the terms of a collective bargaining agreement which was fairly arrived at without any taint of hostility toward veterans.

And we respectfully submit that no such taint can be levied at the agreement here.

Justice Hugo L. Black: I presume you're saying that he had been on the furlough for six months or gone six months leave of absence that they couldn't have their pay?

Mr. Edward F. Butler: That is right sir, and that is the --

Justice Hugo L. Black: (Inaudible)

Mr. Edward F. Butler: That is right, sir.

So that -- both veterans and nonveterans were treated equally so far as time off the job was concerned.

Justice William J. Brennan: That's your 8 (c) argument, isn't it, Mr. Butler?

Mr. Edward F. Butler: Well, this is -- my argument is that 8 (c) doesn't control this case.

Section 8 (c) simply requires that a veteran be restored without loss of seniority.

Now, what benefits are to be perquisites of seniority is left entirely by 8 (c) to the collective bargaining agreements between the parties.

Section 8 (c) doesn't undertake to impose a seniority system.

Section 8 (c) assumes and accepts the seniority systems that have been negotiated by the parties and are in effect in any employment situation to which Section 8 (c) is applied.

Now here, the plain fact is that the employer and the union negotiated a settlement of this strike by awarding separation allowances based not on seniority.

And it was perfectly confident for them, we respectfully submit, to make that choice.

Section 8 (c) does not mandate that in computing separation allowance or anything else that seniority must necessarily be the measuring rod.

Indeed, this Court in the Ford Motor Company against Huffman case pointed out the wide range of discretion that must be given the employer and the collective bargaining agent to work out arrangements which are fair to the entire bargaining unit and we respectfully submit that that duty was fully met and fully discharged here.

It would --

Justice William J. Brennan: I suppose then, Mr. Butler, if you had a vacation pay program under a collective bargaining agreement that said, four weeks vacation pay after 20 years of compensated service, three with vacation pay after 17 years of compensated service, and they have this provision you pointed to at page 10, you'd say the party got only three weeks and not four, isn't it?

Mr. Edward F. Butler: I would, yes.

I would, and the agreement that we have here, the agreement that these parties worked out and I wish to emphasize that it would work out really under most difficult conditions and Ford's dried out of the better heat of industrial conflict.

The agreement that these parties hammered out, was an agreement which has -- is not unusual in many of its features.

The Department of Labor has recently published a very comprehensive follow-up in this area, entitled Severance Pay and Lay-Off Benefit Plans.

It reviews the various types of separation pay and lay-off benefit plans that are found throughout the country.

And it's immediately apparent that a wide variety of measuring rods has been used, seniority has been used.

Perhaps the most common measuring rod which has been used for separation pay is a -- the employee's total earnings during the cause of his employment.

Now, of course --

Justice William J. Brennan: I wonder -- suppose here is any basis for the assumption -- presumption call it if you will that but-for the three years he spent in service Accardi would have worked at least one day a month?

Mr. Edward F. Butler: I think --

Justice William J. Brennan: In the years 1940 to 1943?

Mr. Edward F. Butler: I think the Court can well assume that he would have, but I don't think that's dispositive of this case.

Because what he is entitled to so long as the agreement that has been made on his behalf by the union with the employer was concerned is not hostile to veterans and doesn't discriminate against them so long is that so, then I think we have to abide by the agreement.

Justice Byron R. White: Well, what if the agreement based vacation or the severance pay on the length of seniority --

Mr. Edward F. Butler: Then we would've computed seniority by giving him credit for the military service.

Justice Byron R. White: And that would -- anything -- anything that is computable just by reference to the passage of time or that's automatic in the passage of time he would've got credit for it, wouldn't it?

Mr. Edward F. Butler: He would have because the agreement would have given it to him.

Justice Byron R. White: And you think the one day a month really takes it out to that category?

Mr. Edward F. Butler: I don't think the one day a month affects it one way the other, Mr. Justice White.

This was a compromise reached after hard bargaining between the parties.

Presumably, the --

Justice Byron R. White: Why if could -- do think the parties could have agreed for example that there well be severance pay based on length of seniority but excluding credit for a military veterans?

Mr. Edward F. Butler: No, I do not, because that would be discriminating against veterans.

Justice Byron R. White: If the duty is to dispositive of the case doesn't say the parties agreed on it or that it was in the heat of a labor conflict?

Mr. Edward F. Butler: I will modify that by saying, it's dispositive of the case if the agreement is without taint of hostility toward veterans, if it doesn't discriminate against veterans.

Justice Byron R. White: Well, I'm just asking you again then that you think the one day a month thing is so significantly different from just basing it on seniority which is automatic in the passage of time?

Mr. Edward F. Butler: No, I do not.

No.

Justice Byron R. White: You think it's not significantly different?

Mr. Edward F. Butler: I don't it's -- well, I think it is significantly different because it's still compensated service.

It's a way of measuring length of compensated service.

And I would like to --

Justice Byron R. White: Yes.

Mr. Edward F. Butler: -- I would like to make this point that here, of course, at the time this settlement was made, the railroads involved were able to estimate, at least they thought they were able to estimate the total cost of this package.

Justice William J. Brennan: And this application to fellow veterans during last war, I take it, never got into the negotiation?

Mr. Edward F. Butler: Never got into the negotiations.

And the record -- the stipulation in the record affirmatively shows or stipulates that this agreement was made in good faith and there was an affidavit before the Court, which was not contradicted.

An affidavit submitted on behalf of the railroad which stated by a person who was involved in the negotiations that there was no intention on the part anybody to discriminate against veterans.

Now, let me point out what might have happened if the parties had attempted to accommodate this point.

Our basic position is that they were not required by Section 8 (c) to accommodate it.

But let's suppose that it had been raised and they have attempted to accommodate.

I think the only thing that can realistically be hypothesized here is that they would have tried to rearrange the formula to still fit within the total cost of the package.

And they probably would have then, if they gave the veterans credit for their time in military service, would have given the other furloughed employees credit for their time while they were laid-off or on leave of absence.

And in the end, these veterans might have gotten a less individual benefit than they've already received, because this would necessarily have deluded the benefit that went to each individual.

Now, I think that it's a matter of fact the agreement itself --

Justice William J. Brennan: Well, it did provide for the furlough, or didn't it, expressly?

Mr. Edward F. Butler: I beg your pardon sir.

Justice William J. Brennan: As I noticed at page 10, the furloughed oiler as such was taken care of provided herein at least $26,000 as an oiler engineer from 1958 to 1959.

Mr. Edward F. Butler: I think there is another significant provision that is directly relevant to the point that I was just making, Your Honor, contained on page 12 of this agreement.

You will note down there under paragraph 9.

The parties addressed themselves to the question of the New York Central Railroad Company which at that time didn't have any diesel tugs.

They had steam tugs but they were planning a diesel operation and they were looking forward when they planned the diesel operation to laying-off these oilers.

And the agreements specifically says as dieselization proceeds the parties will endeavor to accommodate the principles adopted herein to the success of steps of dieselization.

The carrier shall not be required to provide any benefits more extensive or relatively more expensive than those provided herein.

Obviously, what the railroads were interested in was in achieving their objective within their own financial limitations.

Presumably, each one had put a limit on the amount to the package, the amount he was willing to pay to achieve this objective.

And if substantial additional cost is now to be imposed upon them, we think that certainly it's not required by Section 8 (c) and would be obviously inequitable.

Now, I would like to close by saying a word about the last clause of Section 8 (c) which -- Section 8 (c) contains four different provisions with respect to veterans.

It says, first, that after they're restored, they shall be considered as having been on furlough or leave of absence.

Now, that's just exactly the way we treated them as though they've been on furlough or leave of absence.

So we have certainly complied with that part of Section 8 (c).

But the last clause is the one to which I would like to direct the Court's attention.

And that is the clause which provides that he after being restored and given these rights, he shall not be discharged from such position without cause within one year after such restoration.

Now, this Court has held in the Oakley case that that one year period is not a statute of limitations.

Nevertheless, in Whirl Mobiles, this Court held that that did apply not only to discharges but to the cutting back of any other kind of employment benefits which a veteran had.

So that while in the Oakley case, it was held to be not a statute of limitations.

It stands here in the statute as testimony of Congress' intent that these benefits not be frozen into the employment relationship per omnia saecula saeculorum.

And here, we have a collective bargaining agreement and into 15 years after these people completed their period of military service and we thing that the agreement was nondiscriminatory at its terms excluded there time in military service and if the judgment below should be affirmed.

Thank you.

Justice William J. Brennan: What's your answer, Mr. Posner, to that argument in this respect that there's nothing about the Selective Service and Training Act which limits the authority of the parties to make this claim of a standard as the measurement, agree upon this kind of a standard even though its consequences to set out the veterans three years credit that otherwise he'd have were just length of service.

Rebuttal of Richard A. Posner

Mr. Richard A. Posner: Well, I think there are two answers.

The first is that in the Fishgold case, the leading case in by Mr. Justice Douglas in this area.

The Court stated explicitly that the parties in their contract could not cut down the rights of veterans.

But I think beyond that, this case illustrates how if you permit the parties to have carte blanche in dealing with these rights of seniority the results are anomalous because Mr. Butler concedes that if pure length of service were the criteria these veterans would be entitled to equal treatment with nonveterans.

The contract between the --

Justice Byron R. White: But on the other hand do you concede that the parties that the employer here and they could agree now to make earnings the basis for seniority and therefore not include any times spent in the military?

Mr. Richard A. Posner: Well, I think if the -- and test of earnings might or might not be this.

If the period the separation allowance was as a kind of bonus for past work as revealed by earnings.

Justice Byron R. White: Well, all you've got unfortunately is the provision in the contract, were going to make the separation by total earnings.

Mr. Richard A. Posner: Well, I think that would be a difficult case, but I think if the basic point, and again, it would -- something would have to known in that case about the circumstances of the provision.

But if the intension is to make given a benefit based on length of service, however that's measured, it seems to us --

Justice William J. Brennan: Your point is that the man -- if an employer is going out of business and he's going to make a separation pay provision, well then -- and it's going to be based on anything that is related to employment which the veteran could not perform because he was in the service.

Nevertheless, he's got to be given credit for that time, is that it?

Mr. Richard A. Posner: Yes, with the qualification that if the nature of the benefit is one designed as actual compensation wages.

The veteran is not entitled to wages for time that he was in the service.

But whereas here you have a separation allowance based on nominal service.

The basic standard being length of employment and the intension merely to grant an automatic benefit to those who have been on the job for a long time, veterans are entitled to be treated as if they have been employed.